PolitiFact: Auditing the Fed becomes issue in congressional race

At issue, U.S. Rep. John Barrow’s position on auditing the Federal Reserve.

Rick Allen, a Republican running against the Augusta Democrat, posted a message on his Twitter page about Barrow.

“You want to #AuditTheFED? @RepJohnBarrow doesn’t,” the tweet read.

True?

“This is probably as big a lie as you can get from Rick Allen,” Barrow spokesman Richard Carbo said in one email.

“ ‘Audit the Fed’ is yet another example of John Barrow trying to be on both sides of the issue,” said Dan McLagan, a spokesman for Allen.

Barrow represents one of the few swing congressional districts in Georgia, and Republicans have been unsuccessful in beating him despite great efforts in recent election cycles. Barrow is the only white Democrat from the Deep South currently serving in the House.

So who’s right here? PolitiFact Georgia decided to find out.

First, a little background.

The Federal Reserve helps set national monetary policy, and its decisions have great influence on Wall Street and the world economy. A movement to audit the Federal Reserve, commonly called the Fed, gained momentum in 2009 after the financial crisis a year earlier. Lawmakers wanted to examine the Fed’s emergency lending to financial institutions in the months leading up to and after the crisis. At its peak, the Fed’s lending totaled $1.16 trillion, according to news accounts.

One of the leaders of the Audit the Fed movement was U.S. Rep. Ron Paul, a now-retired House member from Texas who ran unsuccessfully for president in 2008 and 2012. Paul introduced a bill in February 2009 to conduct an audit. Called the Federal Reserve Transparency Act of 2009, House Resolution 1207 would politicize their work, Fed Chairman Ben Bernanke countered.

“(W)hat is so outrageous is that the Federal Reserve can literally deal in trillions of dollars,” Paul said on the House floor in May 2010. “They don’t get the money authorized. They don’t get the money appropriated. They just create it, and they get involved in bailing out their friends.”

Paul’s legislation had been inserted into a House version of a bill involving the regulating of Wall Street that he boasted at the time had more than 300 sponsors. One of those co-sponsors was Barrow, McLagan noted.

McLagan pointed to a vote by Barrow on the bill on June 30, 2010, to support his candidate’s claim. Barrow voted against what is described in federal records as “a motion to recommit a conference report with instructions.”

“(Barrow) co-sponsored the bill, then voted against it. That is John Barrow in a nutshell — everything is half true because he supports both sides of every issue,” McLagan said. “He is tailor-made for PolitiFact.”

Congress defines a motion to recommit with instructions as one final chance to amend a bill before it is passed by the full House of Representatives.

The motion included language to audit the Fed that was similar to what Paul had proposed a year earlier, according to a pro-Ron Paul website. Eight minutes later, the House passed, with Barrow’s support, a financial industry bill that had been agreed upon a day earlier by House and Senate lawmakers. Paul supporters said the 2,000-page bill had a “watered-down audit provision” limited to loans made by the Fed during the height of the economic crisis.

Carbo, Barrow’s spokesman, explained the vote against the motion to recommit.

“[T]he main purpose of an MTR is to send the bill back to the Committee of jurisdiction, effectively killing the bill. Mr. Barrow, was already in support of the bill (which included audit language), so it would have been counterproductive to send it back to Committee when negotiators had already come to an agreement,” Carbo said via email. “The MTR, in addition to ‘killing’ the underlying bill, made some other changes that weren’t clear at the moment of the vote.”

Two years later, Paul tried again. In July 2012, the House voted 327-98 in favor of a bill he titled the Federal Reserve Transparency Act of 2012. Barrow had signed on to the bill as a co-sponsor in July 2011, and he voted in favor of the legislation. The bill was forwarded to the Senate, but no vote was taken there, records show.

In January 2013, another Georgia House member philosophically tied to Paul introduce another bill to audit the Fed. This was one filed by U.S. Rep. Paul Broun, a Republican from Athens. Barrow is one of 181 House members who co-sponsored the bill. The legislation, though, has not come up for a vote in the House.

McLagan insisted his candidate’s Twitter post was correct, citing the 2010 vote. McLagan said Barrow was slow in co-sponsoring the subsequent legislation to audit the Federal Reserve. In short, McLagan said, Barrow is not truly committed to auditing the Fed.

“He’s on both sides of every issue,” McLagan said repeatedly of Barrow.

To sum up, Allen’s Twitter page posted a claim that Barrow does not want to audit the Federal Reserve.

Barrow, though, has co-sponsored and voted for legislation in favor of an audit.

We rate Allen’s claim False.