Rep. Mel Watt of Charlotte, whose campaign coffers are well-stocked with banking and financial industry money, yesterday tried, but failed, to derail an amendment to a House Finance Committee bill which would open the Federal Reserve to public audits. The longtime friend and ally of former Charlotte mayor Harvey Gantt, and favorite of many local progressives, proposed his own amendment, presented as a “compromise” that would still increase transparency at the Fed. A close reading by the Huffington Post, however, showed that Watt's amendment would have in fact decreased transparency by adding more restrictions. Watt’s amendment was supported by frantic, last-minute lobbying from Federal Reserve officials and a letter from a group of eight economists who were presented as a "political cross section of prominent economists," although seven of the eight have extensive connections to the Fed, and half of them are on the Federal Reserve payroll.
Watt's amendment was voted down, and the amendment to audit the Fed -- proposed by two of the farthest-left and farthest-right Congressmen, Rep. Alan Grayson (D-FL) and Rep. Ron Paul (R-TX) -- passed in a bipartisan vote of 43-26. Democrats' support for the Paul/Grayson plan to audit the Fed was solidified after leading progressive economists and labor leaders posted a letter calling for a rejection of Watt’s amendment.
Watt gets much of his campaign money from businesses with intense interest in what happens at the Federal Reserve. In the 2008 campaign cycle, Watt’s four top contributors were Bank of America, Wachovia, American Express, and the American Bankers Association. Of the $458,000 received by Watt by PACs, $217,000 came from banking, finance, insurance and real estate PACs. Figures are from the Center for Responsive Politics.