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GAO Preliminary Audit Provides Case
for Bernanke, Geithner, and Obama
To Go to Jail

July 28, 2011 (EIRNS)—Lyndon LaRouche on July 26 called for the immediate jailing of Federal Reserve Chairman Ben Bernanke, Treasury Secretary Timothy Geithner, and President Barack Obama, for their role in a massive theft of taxpayers money, staring with the 2008 bailout of Wall Street and London, and now continuing with the bailout of the hopelessly bankrupt European Monetary Union and Wall Street.

LaRouche made the demand after reviewing the July 2011 Government Accountability Office (GAO) audit of the Federal Reserve, which is the first installment of a larger audit to be completed by October of this year.

The 239-page preliminary audit reveals a trail of criminal action on the part of Bernanke and Geithner. In March 2008, Bernanke fraudulently invoked an emergency clause in the Federal Reserve Act, claiming that, on the basis of "unusual and exigent circumstances," the Fed could issue emergency loans to non-depository institutions for the first time since the Great Depression. As the result, the Fed issued more than $16 trillion in emergency loans to Wall Street and foreign banks. Furthermore, most of the fraudulent "emergency lending" was "outsourced" to private contractors, led by JPMorgan Chase, Morgan Stanley, and Wells Fargo, in no-bid contracts that totalled $660 million in fees.

Numerous officials of the Fed and the outside contractors were given blanket waivers, allowing them to act despite clear conflicts of interest. The Fed audit cited the case of William Dudley, a former chief economist at Goldman Sachs, who is now the chairman of the New York Federal Reserve, and who was given a conflict-of-interest waiver to retain his stocks in AIG and General Electric at a time when he was authorizing hundreds of billions of dollars in fraudulent "emergency" loans to these firms. In another example of the rampant conflict of interest, the CEO of JPMorgan Chase was allowed to remain on the board of directors of the New York Federal Reserve Bank, while his firm received $390 billion in loans, and functioned as a major clearinghouse for the entire Federal Reserve emergency loan program.

The GAO audit was conducted under an amendment, introduced by Sen. Bernie Sanders (I-Vt.), to the Dodd-Frank bill, over strenuous objections. Despite the stunning conclusions of the $16 trillion price-tag, very little attention has been given to the report.

Why is Congress arguing about $4 trillion in budget cuts, when the sleazy Wall Street gamblers have made off with $16 trillion in bailout money? Why not just get that money back?