ALG and Rep. McMorris Rodgers Blast Treasury Department for Transparency Failure on IMF European Bailout

Jan. 25, 2012, Fairfax, VA—House Republican Conference Vice Chair Cathy McMorris Rodgers and Americans for Limited Government (ALG) president Bill Wilson joined together today in expressing deep concerns about the failure of President Barack Obama's Treasury Department to comply with even minimal transparency standards in their dealings with the International Monetary Fund (IMF).

 Representative McMorris Rodgers, the sponsor of legislation rescinding a $100 billion credit line that Congress, asserts, "It is simply unacceptable for the Treasury Department to continue to ignore legitimate inquiries about the U.S. participation in the European Union financial crisis. The Secretary's failure to meet the bare minimum standards of transparency makes it all the more urgent that Congress rescind the $100 billion line of credit which the Secretary oversees."

Wilson, whose group on Jan. 12 filed an administrative appeal to the Treasury Department due to their failure to respond to Freedom of Information Act (FOIA) requests on the same subject, agrees stating, "It is simply outrageous that the Obama Administration is trying to hide information from the American people about a $100 billion liability that this President supported and signed into law."

On Nov. 22, the Treasury Department had requested an extra ten days to process the ALG request in a timely fashion, which should have been received on Jan. 5. 

"These delays are simply inexcusable when billions of U.S. taxpayer money is already being put at risk," Wilson said.

In addition to the $100 billion credit line, the U.S. also currently provides the IMF with a $64 billion quota that can be lent.  So far, at least $27.68 billion of U.S. funds has been given to foreign governments with a promise of repayment, including $22 billion from the quota, according to the IMF.

The additional $100 billion dramatically expands the IMF's ability to tap the U.S. taxpayer to bail out nations like Greece and the banks that enabled them to continue their out of control spending policies that have led them to financial ruin.

"Based on publicly available information, we know the U.S. is already bailing out Europe. The question is to what extent, which a proper response to our FOIA request by Treasury would reveal," Wilson explained.

The credit line which has already been tapped for $7.2 billion according to the IMF thus far  allows the international organization to draw more than $100 billion of U.S. taxpayer dollars without any additional authorization from Congress. The McMorris Rodgers legislation would eliminate the liability.

"If President Obama feels that the U.S. taxpayer should bail out the failed socialist states of Europe, then he needs to come to Congress and request the funds," McMorris Rodgers added.

Wilson concluded, "Any member of Congress who fails to put this legislation on President Obama's desk is choosing to use taxpayer money to bail out Europe and the banks that lent these out of control governments the money to continue their spending binge. No one will be able to hide from this fact, and the public is going to be outraged."

The McMorris Rodgers bill currently has 90 co-sponsors and is pending in the House Financial Services Committee.

Attachments:

Americans for Limited Government Administrative Appeal on FOIA Request, and the FOIA Request to Treasury on the International Monetary Fund, Nov. 18-Jan. 12, at http://netrightdaily.com/wp-content/uploads/2012/01/Treasury-IMF-FOIA-Appeal_Binder_01-12-12.pdf .

Interview Availability: Please contact Rebekah Rast at (703) 383-0880 or at rrast@getliberty.org to arrange an interview with ALG President Bill Wilson.

Geithner Denies Fed Bailing Out Europe, ALG Letter: Prove It

It is Treasury Sec. Geithner's "duty to categorically state that U.S. taxpayers

will not back up or cover any European bailout through the IMF, whether through

an increase of its quotas or by borrowing the funds through a house of cards scheme."

—ALG President Bill Wilson

Dec. 8, 2011, Fairfax, VA—Americans for Limited Government President Bill Wilson today urged Treasury Secretary Timothy Geithner to clarify to taxpayers that the U.S. will have no role in bailing out Europe. 

Wilson's letter came in response to Geithner's denial that the Federal Reserve is bailing out Europe.  At a recent press conference with German Finance Minister Wolfgang Schaeuble, Geithner told reporters that "I would say the reports I've read in the press about what the Fed can do are not accurate."

Wilson is not convinced, writing in his letter, "Recall that it took Freedom of Information Act requests being enforced by federal courts and an audit ordered by Congress to reveal trillions of dollars of emergency loans given to foreign banks by the Federal Reserve during the financial crisis, and also $442.7 billion given directly to purchase agency-issued mortgage-backed securities."

Wilson asked Geithner for verification, "How are taxpayers to know if you are telling the truth? How can they even verify what role the Fed may be currently playing in Europe?"

The recipients of emergency loans are not typically published by the central bank without an audit or some other form of outside intervention.

The letter also inquired if there were any plans at the IMF to boost its lending capacity by borrowing the money elsewhere, if not from the Federal Reserve.  Wilson cited Article VII of the IMF's Articles of Agreement that stipulates the Fund can only borrow money "to replenish its holdings on any member's currency."

Wilson wrote, "[The IMF] cannot borrow money in order to boost its own lending capacity. The only way to do that would be to expand the IMF's quotas, which requires congressional consent in the U.S."

The U.S. funds 17.72 percent of the IMF, and Wilson warned that should the IMF borrow money to boost its lending capacity, and the European debts were to default anyway, then U.S. taxpayers would still be on the hook for the losses.

Legislation by Rep. Cathy McMorris Rodgers, HR 2313, would rescind whatever remains of the nation's $100 billion line of credit to the IMF.  It already has 58 cosponsors, whom Wilson praised as "heroes" on behalf of taxpayers.

Wilson concluded by imploring Geithner to reject any American involvement with a bailout of European banks that bet poorly on sovereign debt, writing, "It is your duty to categorically state that U.S. taxpayers will not back up or cover any European bailout through the IMF, whether through an increase of its quotas or by borrowing the funds through a house of cards scheme."  

Attachments:

ALG President Bill Wilson's Letter to U.S. Treasury Timothy Geithner, Dec. 8, 2011 at www.getliberty.org/files/LetterIMFTreasuryFed 12-8-11.pdf.

Article VII of IMF Articles of Agreement at http://www.imf.org/external/pubs/ft/aa/index.htm#art7.

Interview Availability: Please contact Rebekah Rast at (703) 383-0880 or at rrast@getliberty.org to arrange an interview with ALG President Bill Wilson.

Statement by Gov. Rick Perry on Secret Federal Bank Loans

AUSTIN - Gov. Rick Perry today issued the following statement on today's news regarding the Federal Reserve's undisclosed bank loans:

"These outrageous secret federal loans to bailout big banks are why Americans are disgusted with business-as-usual Washington, the Federal Reserve and taxpayer-funded bailouts. The actions of Chairman Bernanke and Secretary Geithner have again proven that Washington insiders cannot be trusted to stop bailouts, protect taxpayers, or create jobs.  

"My economic reform plans seriously overhaul Washington, end federal bailouts and cut government spending, regulations and taxes to put American job creation and our economy on the right track."

Congress Fails to Cut Spending, Treasury Data Shows, ALG Responds

October 17, 2011, Fairfax, VA—Americans for Limited Government President Bill Wilson today issued the following statement on the failure of Congress to cut spending at all this year, as reported by Investor's Business Daily citing U.S. Treasury data:

"U.S. Treasury data shows that despite promises to cut spending by at least $100 billion this year, spending in Washington, D.C. has increased in 2011 by $120 billion.  That is simply unacceptable to the American people, who in 2010 voted to bring an end to Congress' out-of-control spending. 

"With the national debt set this year to become larger than the entire economy, there is no time for mere window dressing to address the government's spiraling borrowing binge.  In the midst of a credit crisis that is sinking the global economy, the last thing we need is more debt.  Yet borrow-print-and-spend is all Washington, D.C. seems to offer right now."

Will Standard and Poor's Downgrade Force Pension Plans To Sell U.S. Bonds?

Expert Discusses Effect of Standard and Poor's Downgrade On Public and Private Pension Plans

PLAINVIEW, NY (MMD Newswire) August 8, 2011 -- The U.S. is no longer rated Triple-A by Standard and Poor's. Many people are speculating that Public and Private Pension Plans will have to sell their U.S. Bonds causing a selloff in the markets. However most pension funds have an Investment Policy Statement which allows for the new AA+ rating on U.S. Bonds.

Public and some private pension plans have an Investment Policy Statement. The Investment Policy Statement defines what types of investments a pension plan can and can't invest in. When it comes to bonds, the Investment Policy Statement gives a minimum credit rating and all bonds must be rated higher than the minimum.

Brett Goldstein, a Plainview, New York-based pension administrator and President of The Pension Department, states, "There is much mis-information out there. Many people are talking about pension funds and how they are now required to sell their U.S. Bonds because they're no longer Triple-A."

Not all pension plans have an Investment Policy Statement. The Employment Retirement Income Security Act of 1974 (ERISA) does not explicitly require an Investment Policy Statement. Some plans don't have an Investment Policy Statement as it might make them an easy target for employees who might be quick to point out when the plan fails to comply with their own written policies.

Goldstein, states, "ERISA does not require that public and private pension plans hold U.S. Bonds or Triple -A rated bonds, although many do. If the stock market continues to respond negatively to the downgrade, public and private pension plans may have to buy U.S. Bonds to avoid losing money and causing underfunding.

Employees who are concerned about the effects the downgrade will have on their pension, should call their human resources department. Public employees can go to their states website and look for the audited financial reports. Employees of large companies can also ask for the audited financial reports. The audited financial reports should have a credit risk section detailing the minimum credit ratings for bonds. Employees in smaller private pension plans should ask for a copy of the Investment Policy Statement.

About Brett Goldstein:
Brett Goldstein is a Pension Administrator and President of The Pension Department, a consultancy based in Plainview, New York. He is a speaker and media personality who specializes in providing businesses and individuals with affordable retirement planning solutions. Goldstein's timely advice and tips have been featured on Fox Business Network, Kiplinger's, Wall Street Journal Radio, MarketWatch.com, New York Daily News, The Chicago Tribune, and many others. Investment services are offered exclusively through: Cadaret, Grant & Co., Inc. Member FINRA/SIPC.