U.S. Rep. Ron Paul, R-Texas

Rep. Ron Paul, R-Texas, has complained that the bill he sponsored calling for an audit of the Federal Reserve has been "gutted" by congressional committee, pointing specifically to a legislator whose campaign coffers have been boosted by the banking industry.

As WND reported, Paul sponsored H.R. 1207, a bill requiring the Federal Reserve – an organization that's independent from the U.S. government but nonetheless oversees U.S. monetary policy – be opened to oversight by Congress. The plan compiled over 300 co-sponsors in the House before being sent to committee.

But in a telephone interview with a Bloomberg reporter, Paul said the teeth have been ripped out of the bill.

"There's nothing left; it's been gutted," Paul said. "This is not a partisan issue. People all over the country want to know what the Fed is up to, and this legislation was supposed to help them do that."

Paul told Bloomberg the bill has been stripped of provisions that closed loopholes protecting the Fed, including exemption from audits of transactions with foreign central banks and protected communications between the Board, reserve banks and staff.

Demand the money managers come clean by signing the petition in support of an audit of the Federal Reserve now!

Paul blamed the chairman of the House Financial Service Committee's panel on domestic monetary policy, Rep. Mel Watt, D-N.C., for eliminating "just about everything" in preparation for the bill's consideration on the floor of the House.

Watt, is has also been revealed, has significant connections to the banking industry.

(Story continues below)

It its report, Bloomberg mentioned that Watt's congressional district includes Charlotte, headquarters of Bank of America Corp., the biggest U.S. lender.

Further investigation through OpenSecrets.org reveals that the largest share of Watt's campaign contributions in the 2008 election cycle came from the finance, insurance and real estate industries.

Breakdown of industries supporting Rep. Mel Watt's 2008 campaign (graph from OpenSecrets.org)

In fact, of $609,072 given to Watt, $217,109 – or 35.6 percent – came from the money sector, including over $187,000 – or nearly 31 percent of his total contributions – from political action committees within the finance, insurance and real estate industry. The next highest industry supporting Watt was labor, which contributed only 14 percent of his total war chest.

Furthermore, the four largest contributors to Watt's cause were Bank of America, Wachovia Corp., American Express and the American Bankers Association.

Keith Kelly, a spokesman for Watt, declined to comment and told Bloomberg Watt wasn't immediately available for an interview.

Paul, however, told Bloomberg he intends to introduce an amendment that would restore the bill's legislation to its original language when it comes to the House floor for a vote.

Paul long has been a critic of the secrecy of the Federal Reserve.

"Throughout its nearly 100-year history, the Federal Reserve has presided over the near-complete destruction of the United States dollar," he said earlier. "Since 1913, the dollar has lost over 95 percent of its purchasing power, aided and abetted by the Federal Reserve's loose monetary policy."

You've never needed to understand money like you need to understand it now! "Web of Debt: The Shocking Truth About Our Money System and How We Can Break Free" unravels the deception of the Federal Reserve and presents a crystal clear picture of the financial abyss towards which we are heading.

"Since its inception, the Federal Reserve has always operated in the shadows, without sufficient scrutiny or oversight of its operations," Paul said when the plan to audit the Fed was introduced. "While the conventional excuse is that this is intended to reduce the Fed's susceptibility to political pressures, the reality is that the Fed acts as a foil for the government. Whenever you question the Fed about the strength of the dollar, they will refer you to the Treasury, and vice versa. The Federal Reserve has, on the one hand, many of the privileges of government agencies, while retaining benefits of private organizations, such as being insulated from Freedom of Information Act requests."

Ron Paul's 'End the Fed': What we need to do to fix America's economic policy for future generations

Paul has warned, "The Federal Reserve can enter into agreements with foreign central banks and foreign governments, and the GAO is prohibited from auditing or even seeing these agreements. Why should a government-established agency, whose police force has federal law enforcement powers, and whose notes have legal tender status in this country, be allowed to enter into agreements with foreign powers and foreign banking institutions with no oversight? Particularly when hundreds of billions of dollars of currency swaps have been announced and implemented, the Fed's negotiations with the European Central Bank, the Bank of International Settlements, and other institutions should face increased scrutiny, most especially because of their significant effect on foreign policy. If the State Department were able to do this, it would be characterized as a rogue agency and brought to heel, and if a private individual did this he might face prosecution under the Logan Act, yet the Fed avoids both fates."

WND previously reported that the Fed, despite being ordered to disclose to whom it awarded some $2 trillion in discount "stimulus" loans, continues its fight for secrecy.

Related offers:

Sign the petition in support of an audit of the Federal Reserve now!

Ron Paul's 'End the Fed': What we need to do to fix America's economic policy for future generations

"The Creature from Jekyll Island: A Second Look at the Federal Reserve"

"The Fed: Fraud of the Century" – Unconstitutional cartel literally creates problems it was supposed to prevent

"Web of Debt: The Shocking Truth About Our Money System and How We Can Break Free"

"$700 Billion Bailout": What it means to you, your money, your mortgage and your taxes

"Bailout: What the Rescue of Bear Stearns and the Credit Crisis Mean for Your Investments"

"Bailout Nation: How Easy Money Corrupted Wall Street and Shook the World Economy"

"Chain of Blame: How Wall Street Caused the Mortgage and Credit Crisis"

"Hope of the Wicked: Master Plan to Rule the World" (book)

"Financial Armageddon: Protect Your Future from Economic Collapse"

Stop the bailout! Magnetic bumper sticker

Surviving economic meltdown in the age of Obama

Subscribe to Jerome Corsi's new weekly economic newsletter, Red Alert, for one year and, for a limited time get "The Obama Nation" free. (This offer applies only to annual subscriptions for $99.)

Get "Taking America Back," Joseph Farah's manifesto for sovereignty, self-reliance and moral renewal

Previous stories:

House support for Fed audit passes 300

Plans to audit Federal Reserve move forward

Fed audit review beginning in Congress

Ron Paul's Fed audit has majority support

Federal Reserve Board fights to keep its secrets

Senate torpedoes Fed Reserve audit

Majority now cosponsors Ron Paul's Fed audit

Audit of Federal Reserve nearing critical mass

Plan to audit Fed steamrolls ahead

124 congressmen demand audit of Federal Reserve

Push to audit Federal Reserve gains steam

Congressman: Audit the Fed's books

Financial fix? Abolish the Fed, says congressman

Fed says economy even worse than thought

Federal obligations exceed world GDP

Real budget deficit: $4 trillion

True deficit: $3.5 trillion

Unstimulated! Dow plunges 300

Trillions? Get ready for quadrillion

Stimulus still can't help Wall Street

Stocks reject Obama's plans

Fed borrowing could reach $4 trillion

Lawmakers in 20 states move to reclaim sovereignty

California prepares to stop paying bills

Stimulus-plan doubts push Dow under 8,000

Pelosi: Birth control will boost economy

Democrats now in control, say economy to get worse

Will Obama take a pay cut, too?

Obama adviser: White males need not apply

Fleeced! Obama's blanket 'stolen'

$1 billion allocated for batteries

NObama: Wall Street sees worst Inauguration Day

IMF warns of economic riots, police ready for civil unrest

GOP congressman: 'It is not your money'

How Paulson nationalized biggest banks in the U.S.