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« Where the Bailout Went Wrong: Parting Shot From TARP Inspector General Neil Barofsky (NYT Op-Ed, Video) | Main | Jon Stewart: "Quick disclaimer, Japan’s unsolicited poison steambath, is brought to you by the same terrific organization that brings you this broadcast tonight" »
Wednesday
Apr062011

Bernie Sanders Letter To Bernanke: Why Did The Fed Bailout The Central Bank Of Libya?

73 discount window loans to Libya totaling $35 Billion at .25%...

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Read the Letter

WASHINGTON, March 31 – Sen. Bernie Sanders (I-Vt.) today questioned why the Federal Reserve provided more than $26 billion in credit to an Arab intermediary for the Central Bank of Libya.

The total includes at least $3.2 billion in loans that the Fed was forced to make public today in addition to earlier revelations under a Sanders provision in the Wall Street reform law.

Sanders also asked why the Libyan-owned bank and two of its branches in New York, N.Y., were exempted from sanctions that the United States this month slapped on other Libyan businesses to pressure Col. Moammar Gadhafi’s government.

“It is incomprehensible to me that while creditworthy small businesses in Vermont and throughout the country could not receive affordable loans, the Federal Reserve was providing tens of billions of dollars in credit to a bank that is substantially owned by the Central Bank of Libya,” Sanders said. 

In a letter to Federal Reserve Chairman Ben Bernanke and others, Sanders asked why the central bank made at least 46 emergency, low-interest loans to the Arab Banking Corp., in which the Central Bank of Libya owns a 59 percent stake.

In the same letter, Sanders asked Treasury Secretary Timothy Geithner why the Treasury Department on March 4 let the Libya-controlled bank skirt the economic sanctions against Libya.

The senator also questioned why the Bahrain-based Arab Banking Corp. is even allowed to operate branches inside United States. “Why would the U.S. government allow a bank that is predominantly owned by the Central Bank of Libya – an institution on which the U.S. has imposed strict economic sanctions –to operate two banking branches within our own borders?” Sanders asked.

The Fed transactions were made public earlier this year as a result of a Sanders provision in the Wall Street reform law that forced the U.S. central bank to reveal which financial institutions it bailed out during the financial crisis from 2007 to 2010.

In another dubious twist, the Fed loans, at interest rates as low as 0.25 percent, relied on U.S. Treasury securities as collateral.  In other words, at the same time that the Arab Banking Corp. was borrowing money at almost zero interest from one arm of the government, the Fed, it was lending money at a higher interest rate to another arm of the U.S. government, the Treasury Department. 

 

 

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Reader Comments (19)

Apr 1, 2011 at 4:48 PM | Registered CommenterDailyBail
Zero comments on the most important article in the history of our country.

Is it a crime to violate the sanctions against Lybia. If so, can we get every member of the Federal Reserve prosecuted, please.
Apr 1, 2011 at 11:33 PM | Unregistered CommenterBenny and the Talibanks
I hate this Country.
Apr 1, 2011 at 11:40 PM | Unregistered CommenterBenny and the Talibanks
Just doing his "job" so he looks good and can retain his power. Unfortunately, no one in congress is worth much. It took Bloomberg to get the fed to release the TARP documents....not a representative or senator. What the hell does that say??

I'm gonna stop getting hype up on the news. Here's why. The federal reserve is a private institution. They can do whatever they choose within legal limits. So any accusations can be brush aside unless evidence is provided to prove otherwise. The issue in regards to the fed "using" taxpayers money is ridiculous. If you knew anything about taxes, you would realize that they are voluntary submission through an invisible contract with the government (such as social security). Taxation was originally designed for the district, Washington DC (and its territories) to maintain the government and facilities. You may have submitted unknowingly to this contract, but nevertheless, under the law, your non-response (silence) says the contract is valid and you agree with the terms.

The US government is a corporation. The corporate officers (congress) serve the corporation....not you.

Yeah, its all fucked up. The system sucks. But that's what you get with ignorance and complacency.

So you can post all the videos you want about the scum and what they are doing. But, at least they are doing what they know best....protecting their ass(ets). If Americans are SO dissatisfied, then change the system. But I don't see that happening because the public continues to act subservient to these people and their rules. Thus, submitting themselves and their families (voluntarily through silence according to the law) to a contract to follow rules that were never meant to be for the public. And if you say there is no contract, then stop paying your taxes and let us all know what happens.

Good luck.
Apr 1, 2011 at 11:44 PM | Unregistered Commenterdogismyth
Benny & the T's
I feel the same way.

Gerald Celente : When people lose everything & have nothing to lose,they lose it.
I don't think this will end well for the ELITES.
Apr 2, 2011 at 12:36 AM | Unregistered CommenterTR
The Question SHOULD BE: Why did the FED BAIL out any bank - we're supposed to be a capitalistic economic system - you fark up - you die - you spawn no more and are replace my more viable organizations. Wall Street's blue eyed Mafia Children of the Balfour Declaration got trillions from main street - main street lost it's homes - it's jobs. Mainstreet lost America. Blankenfein said Goldmans didn't hit the discount window to a congressional committee - yesterday's data dump says Blankenfen the Hutt lied - he still ain't adorned with high tensile chain bracelets - WTF Not?

The Bern should be calling for the impeachment of Obama.

The Question SHOULD be why did the US government sell Libya 40 Billion in weapons last year - and will now spend over a 100 billion to destroy them (not including the cost of DoS Xe mercs)?

The question should be why has the CIA been arming the Libyan Rebel Army for weeks before the lamestream shilled to the top of its shiny shin shins the Kadaf threatened to go door to door and do to Libyans what the US did to Iraq without corroborating the allegations. The UN security council did not even send in inspectors in before the vote to assure the facts used were not another weather balloon truck slam dunk.

Yesterday on the floor of the US congress, Kucinache stated that the Libyan Rebel Army (sounds like a Hollywood moniker straight out of Ft Bragg and the School of the Americas, don't it?) were really AL CIADA contractors. The week the UN replaced the US Congress and authorized the War Criming of Libya, the Kadaf was supposed to receive a humanitarian award from the UN.

We installed a government in Iraq to Kangaroo Saddam to the Gallows for allegedly killing 189 Kurds who were running terrorism managed by Mossad against Iraq. Clinton killed near a hundred at the Branch Davidian. George Bush signed the execution orders for over 160 inmates - and then killed a million Iraq when Colin Bowel confused Weather Trucks with Mobile WMD weapons labs, under oath, in front of the UN Security Council.

Where were the NATO bombs then? Anyone see any ompacts inside the Beltway?

Next to what we've allow the alleged governance of the US to do in Iraq, Libya looks like a monastery.

Next to the Kadaf, the Obomba looks like Vlad the Impaler verses an Altar Boy.

What did Saddam know?

He knew the facts behind the Iraqi jet that shot an Exocet into the Stark. Had the Stark sunk - it would have been blamed on Iran.The attack on the Stark was a US engineered false flag to lead the republic into another war of lies in Iran.

What does the Kadaf know?

He knows what was in the double sealed, by a Virginia Magistrate, evidence pouch regarding the Lockerbie Pan Am allegations. The alleged perp released by the Irish was not released because of cancer - he was released to prevent a Lockerbie Judaical Panel from making the contents of that evidence pouch public. The evidence in that pouch proves that Lockerbie Pan Am comedy was a CIA drug operation = check yourself.

Oil was going down, the dollar was gaining strength, the indexes were correcting. The events in Japan exacerbated those necessary facts. Understand, Wall Street, the FED, the DoT cannot allow a strong dollar - we can't have real capitalism or real markets. We can't have cheap commodities.It would screw up the dollar carry!

Nope - what we need GE corn fuel - Yep - that's it! Sure as shooting a towell head full of DU slugs from a GE Gatling Gun - that's what all this genocide is about - GE's taxes for the last three years have been a net gain. They're booked as income. GE pays no taxes. 2/3 of US corporations pay no taxes. GE pays negative tax. GE gets Tax subisdies to drive up the cost of corn by refining ethanol with the dual goals of free taxpzyer dollars and the destruction of the dollar to inflate US market indexes.We can't have no real market - this is fascism fella! GE CEO dude Imelt is Obomba's Labor Secretary. As in I-melt(down reactors by GE). 53% of GE's labor force is off shore. GE pays no FICA, no unemployment for those 52% off shored employees. The IRS colexts no taxes from those off shore foreign workers. Do ya see the logic in Imelt being posted as Labor Secretary? Well don't cha, punk?

Make the corps pay taxes and buffing up the USD would ruin the ponzi (don't cha see?) - How to forget Japan? How forget the slide of the USD against the JPY? Puff: VIOLA - THE SOLUTION MATERIALIZED AFTER THE CIA AND THEIR AL CIADA contractors were in theater constructing the "stage" for another "Comedy of Genocide": Don't change that dial - except to watch the final four - you're an American - bred dumb and numbed for apathy ENJOY IT!

FALSE FLAG A HUMANITARIAN CRISIS IN LIBYA SOLVES EVERYTHING! Ya - f*cking - Hoooo! ... Murder more dem foreign boogies - and charge the US tax payer 4 Billion a day to do it (too boot) - and let the Wall Street PONZI continue unabated. It's the Sham Wow speil of the epoch - money for nuthin and murder for freedom!

What doesn't Sanders ask why we bail out the Land of the Blue Eyed children of the Balfour Delclaration - to the tune of 30 Billion / year? Why doesn't Sanders ask who is to be held accountable for the war crimes in Iraq and Afghanistan and Libya? Why doesn't Sanders ask why the prez broke the law and attacked Libya without congressional authorization. Why doesn't Sanders resign - he ain't needed - he and the rest of both houses have been replaced by the UN Security Council - the same UN that gave Obamba the Peace Prize - they should award Attila the Hun and Hitler that prize posthumously if that's the way recipients are selected - sh*t - give one to Dubby, his poppa and Clinton too!

Give one to Charles Manson while they're at it!

Sanders is a phony war crime facilitating walking mesiah complex posing as a concerned congressman with a nonsensical agenda. He's one of the loudest mouths on the block - a veritable storehouse of useless bovine excrement to waste the republic's time with the "hope for change sucka" scam.

Without justice - the republic is a shell game - and Sanders is just another actor in the ongoing fiction we call government and just another facilitator of global genocide and the gentrification of America.

Who listens to any turd flushed from the toilet of the "hill" through the plumbing of the lame stream? The pretenders in our alleged government should all be incarcerated pending investigations and indictments.

THE QUESTION SHOULD BE : WHY HAVE WE AGAIN OPENED A THIRD THEATER OF WAR CRIMES?

TO SANDERS AND THE REST OF ACTORS IN THE LONGEST PLAYING MADE FOR TV FICTION KNOW AS CONGRESS BITE ME:. (_|_)
Apr 2, 2011 at 1:16 AM | Unregistered CommenterBob Upmyass
"I don't think this will end well for the ELITES."

TR,
It ended very well for the ELITES. They did steal and are currently, as we speak, stealing the public's money. They control the news and the politicians. They have somehow convinced a majority of the population that honest, hard working American citizens who average between 40k - 60k per year have bankrupted our country with their collective bargaining. That someday their pensions will be unfunded, say 30 years from now. But the fact is we are bankrupt, now. Not because of Unions, not because of collective bargaining, but because of the ELITES.

Personally, I've been a republican my entire life. That has ended. I will fight any republican for the rest of my life. I hate Barbara Boxer, Diane Feinstein and Nancy Pelosi, but I want bad things to happen to Scott Walker, George Bush, Christopher Cox, Ben Bernanke, Allen Greenspan, Larry Kudlow, Newt Gingrich etc etc etc. George Bush invented the bailout. Christopher Cox stood by at the SEC and prosecuted no one while the financial crimes were committed. George Bush allowed the illegal immigrant population to explode under his watch draining our public coffers. George Bush pushed for illegal Mexican truck drivers to destroy California interstates with their broken down air polluting trucks (While American companies have to obey vehicle code and pollution restrictions). John "Bailout" Campbell voted for every bailout under republican rule. George Bush supported Greenspan and nominated Ben Bernanke.

Don't get me wrong, I hate Democrats. But it is the republicans who are blaming the powerless middle class.

I've been a fiscal and moral conservative my entire life. Today, I look at Jerry Brown and Bernie Sanders as the most sane politicians we have. Are you F'ing kidding me. I even think John Stewart is more newsworthy and honest than Fox News and CNBC.
Apr 2, 2011 at 2:04 AM | Unregistered CommenterBenny and the Talibanks
This week report on activity of the USA Federal Reserve Bank pretty much lets us all know why the people running the Federal Reserve Bank fought so hard to keep it dirty secrets from public knowledge. There is nothing in the information that I did not expect but I have always considered the Federal Reserve Bank an evil organization created by the money people of the world to steal the wealth of the working class. To me it is a classic communist organization which controls the economy by having the power to destroy, nurture or destroy depending on how an organization fits into the goals of the privately owned bank which the Federal Reserve happens to be. Funding evil around the world appears to be a major part of the federal reserve.
I would have to question if the Federal Reserve foreign operations would not be allowed by our constitution. Congress gets to approve treaties which one can think of secret bail outs of foreign central banks would be in my opinion.
So much of the evil of the world is funded by the federal reserve. I did see that they plan on having a press release after their next meeting. What good does that do since they had press releases all along but apparently failed to mention that they were the funder of terrorist organization and the funding of every other nation which used our money and left our citizens in harms way.
Dump the federal reserve. A bad idea that never should have happened.
Apr 2, 2011 at 8:34 AM | Unregistered Commentertom dee
Tom Dee, I agree. One possibly overlooked aspect of the Federal Reserve funding evil overseas is the often direct tie-in to domestic arms vendors. When the US funds a couple of billion in defense assistance to Ghadaffi, or Mubareck, the dictators don't get the money, they get "gift cards" that are redeemable only at US outlets. A commenter above made the point our arms industry gets paid to arm Libya, to arm the rebels, and to destroy the arms on both sides. They are using million+ dollar cruise missiles to destroy tanks, armored personnel carriers, and artillery batteries we manufactured or at least sold to one side or the other. And all of these weapons were paid for at full retail prices by the American taxpayers, with financial services supplied by the banks, and all revenues going directly into the coffers of some of the largest US corporations. And it's a perfect scheme; the liberal press blame Ghadaffi and Mubareck, the conservative press blames Obama and Congress, and the Tea Party blames soft-hearted/soft-headed US foreign policy, while the multi-national arms dealer corporations laugh all the way to Goldman Sachs. Many aren't even required to pay taxes on their profits. It's not a good picture, but it's been going on a long, long time. Our species' acceptance and promotion of war and carnage has fostered centuries of war profiteering.
Apr 2, 2011 at 5:33 PM | Unregistered CommenterJay C. Davis
Why? "Interdependence"
The "reality" of globalism, behind the absurd diversion on Capitol Hill
http://letthemfail.us/archives/8371
Apr 6, 2011 at 1:35 PM | Unregistered CommenterWil Martindale
This is NOT "credit." The money is not "loans."

The Federal Reserve is going to every foreign government and bank that [purchased the fraudulent mortgage-backed securities from Wall Street and buying back the bad paper to keep the scandal under wraps and to keep their Wall Street cronies out of prison.

And the American people get to pay for it all.
Apr 6, 2011 at 1:41 PM | Unregistered CommenterMichael Rivero
Mike...from everything i've seen and i looked in detail yesterday...these loans were completely paid back...the discount window is for overnight and other short-term borrowing...that's why the loans were repeated over and over again...

But i do get your point...and there has been MBS purchases from foreign banks by the Fed as part of QE1...which makes your point...but as far as i can tell thru exhaustive research, all the discount window loans were paid back...
Apr 6, 2011 at 1:49 PM | Registered CommenterDailyBail
WE HAD TO BAIL OUT LYBYA, OTHERWISE THEIR MONEY WOULD NOT BE WORTH ANYTHING WHEN WE STEAL IT !
Apr 6, 2011 at 2:15 PM | Unregistered CommenterJerzy
If the Supreme Court had been doing it's job and overturning all the unconstitutional laws excreted by Congress in the last 100 years, the US would be a completely different country today.
Apr 6, 2011 at 2:26 PM | Unregistered Commenterj r
The Elite Special Interests have owned the government of this country including the Supreme Court since late 1913 and probably a long time before that. A large percentage of the laws passed by Congress since then directly benefit those Special Interests. It will be a very cold day in Hell before any existing law that benefits the special interests is overturned. Powerless unenforceable amendments yes, overturned never happen.
Apr 6, 2011 at 3:23 PM | Unregistered CommenterSagebrush
@DB, I sent you a couple of links..... you might want to check your mail.
Apr 6, 2011 at 3:42 PM | Unregistered Commenterjohn
Daily Bail,

I appreciate everything you and MR are doing.

You said, ".. ..these loans were completely paid back."

I ask, "Who says?" A cash receipts or deposit slip purported by the same Algae of Balfour that delivered the last 10 years to American.

JP Morgan got 12 Billion in TARP relief. Gierthner said JP repurchased 900 Million or so of the outstanding warrants held by Treasury. Let's see:

12 Billion - .9 Billion = Zero ????

Was never very good with math but I I can crunch 12 - 1, and it comes out 11 Billion.

But the deposit slip, fake or true, is spit in a barrel compared to what went on.

The FED and DoT paid a dollar for each dollar of outstanding principal on MBS and other structured notes their Balfour Mafioso buddies scammed other governments and US fund manager portfolios with.

The problem, as the Balfour Mafia framed it to the compliant congressional patterns was not fraud. It was a Tsunami - too complicated to understand. When they we're pressed about collateral calls the excuse was they could not mark the paper to market. You know what that means. I know you do. It means there was no market for that junk. It was worthless. Everybody in the fraud chain from loan writers, appraisers, banks and title companies front loaded the mortgages with fees and for a while, collected the interest which was almost 100% of the unseasoned mortgages initial coupon payments.

The Balfour Mafia, having noticed the phony baloney chumming using the old Tsunami or too complicate or unable to mark to market shtick was getting any bites tried to blame it on hill billies looking to live above their means and that the hill billies, while waiting in line for a job at a nail salon or to collect unemployment benefits, fooled all them Ivy League Madrassa educate Balfour Mafioso into allowing the mortgage - even if they had no income.

Hill Billy hypnosis techniques no doubt.- perhaps the same method the Bin Guy use to channel box cutter armed banditos to cut through a 10 Trillion Dollar security apparatus and disable Dov Zacheim's remote flight systems on those alleged 757s by a rabble of Microsoft Flight Simulator trained "haters of our freedom" who enjoyed getting drunk with Jack (off) Abramnoff.

The box cutter story don't make sense. Do they scare you? They don't scare me. ANy of my neighbors would have given their life to save those flights be it the threat of box cutters - knives - guns - whatever. And a parent with a child - they have no fear. If death is certain, most Americans would choose to meet it on their own terms and would laugh at someone threatening them with a box cutter. Sure - you can get a scratch - maybe tetanus - but a box cutter, or even a gun, is laughable. Had I been on one of those alleged flights there would have been a bunch of broken box cutter bandits. WHEN DEATH IS CERTAIN THERE IS NO FEAR. Obviously, the passengers on those alleged flight were not any kind of American we know - cause had that been the case - the box cutter drunks would have been dead meat in a New York minute.

Box Cutters cut through a multi trillion dollar security apparatus and met no resistance from Americans on those alleged flights. If anyone believes that then I have a prospectus for an "Instant Water Franchise" I like you to look at.

The Treasury says "paid in full", I also got an "Instant Water Franchise" opportunity for you to consider.

Big crimes are well planned and executed over long time lines. This one initiated with the repeal of Glass Steagal - the box cutter joke was fog for cover - qwell really back in the early 19900 when the Balfour Declaration was accepted and Justice Brandeis delivered the black mail note to Woodrow Wilson whiched forced Wilson to restart World War I and sign the Federal Reserve Act.

Lehman's is the key. I can't believe the ex-executive perps at Lehman are still walking. Someone, at least had the sense to off the airman and ground crew in the Minot Barksdale lost nuke comedy. If I was sitting on this bag of snot I'd be very worried about the risk my Lehman lackies posed. They could be renditioned by a citizen posse and easily made to confess.

So they say ..

The Bernank said the economy is great - no chance of a credit bubble popping. The Bernank says everybody who got tarp paid up. The bill for defending against box cutters is Ten Trillion Dollars. Eagle Scout flight and ground crew protecting our nuclear arsenal first, lose a nuke, then all sie in single car accidents, suicide or climbing accidents. Americans fear box cutters so much they will not risk their life to save their children.

Right ....

Instruction to the jury, "If the witness has been shown to have falsely testified to any aspect of their testimony then the jury may conclude that all the witnesses testimony is false.

The key to this is Lehman Brothers. Fortunately they were allowed to escape scrutiny visa vi bankruptcy. DoT said they had no legal authority to bail Lehman's - that was a lie - they could have done it anytime they wanted - policy and law (or outlaws) were already on the books. The big question never asked was why did a Wall Street Power House like Lehman's leave Wall Street and go into the heartland to set up retail mortgage kiosks. Set aside the fact that one of Lehman's many functions was to pool mortgages into bonds was in direct conflict, a control break, with their retail mortgage underwriting. All bonds have a prospectus - but it wasn't Goldman's or some wall street wiz kid that saw the flaw and then created a "short". It was some doctor in California who didn't like working in hospitals that figured out the "short".

The mortgage collapse was planned. It was no accident. The only way to float the market indexes above any reality capitalism would ever accept was to salt the fields, get those up front fees charged to the mortgage, get those big coupon interest receipts on the front end and then let the dollar carry do the rest.

The Forever War is not about securing oil - it is about scaring up the price of oil. KBR no-bid charges to US taxpayers a half billion a day, almost 500$/gallon, to top off Marine gas tanks in Afghanistan Libya is costing, on the surface, 5 Billion a day and the FED has armed, at retail and standard usury rates all the players in that conflict of comedy and genocide.

US tax payers are being charge 1 dollar on the dollar, Trillions, for paper that is worth less than zero. SOme of the structures those mortgages were written for have been demolished - yet we are still paying them off. I would bet that there are no assets for some of that paper. Whats going on is the gentrification of the US. We are all terror suspects. Ohioans paid for the roads that their state government is selling to private companies to cover the tax give ways to political donars.

America is being gentrified.

If you really believe anything out of the mouth of the Kiddie Fondler's in the Beltway and their Balfour Mafioso owners on wall street - more power to ya. I guess they only lied just once or teice - after all - it was a Tsunami.
Apr 6, 2011 at 4:48 PM | Unregistered CommenterBob Upmyass
"Instant Water" (just add water!)
Apr 6, 2011 at 5:13 PM | Unregistered CommenterBob Upmyass
The FED's discount window is to support funny accounting. Undercapitilized primaries who don't have the reserves to cover their risk use the discount window like they a repo swap - to put cash on the books before their SEC filings are submitted.
Apr 6, 2011 at 5:18 PM | Unregistered CommenterBob Upmyass

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