Three Billion Dollar Fed Surplus May be Dope Profits
Written by Andrew Gause
Tuesday, 30 September 1997
They call it the "Texas Mystery Money" a pile of cash worth more than 3 billion dollars that somehow materialized in the vaults at the San Antonio Branch of the Federal Reserve. Retiring member of the House Banking Committee, Congressman Henry B. Gonzalez, doesn't think the money is much of a mystery at all. "They're laundering Mexican drug profits,"
Congressman Henry B. Gonzalez, doesn't think the money is much of a mystery at all. "They're laundering Mexican drug profits," alleges Gonzalez. Gonzalez organized a special Congressional Committee and requested that Treasury officials investigate the source of the surplus. The results? The IRS Criminal Investigation Division reported they were not trained as economists or bankers so they couldn't say for sure where all that money came from. Plus, they said they didn't have the authority to investigate the Fed anyway. FinCEN, Treasury's super cyber sleuthing agency, also reported that they were not economists or bankers. Like the IRS, they also couldn't pinpoint where the big pile of mystery money came from, but nevertheless they assured the committee it probably wasn't anything to worry about. Why didn't the Treasury seize the billions - and make depositors come forward, identify themselves, and prove their cash came from legitimate sources - like law enforcement agencies do when they find "too much" cash in the pockets of ordinary US citizens? The Treasury's "non-investigation" of the origins of the billions could make a reasonable person ask whether the Federal Reserve is above the law. Some might even speculate on the Fed's involvement in nefarious enterprises south of the border.
The truth is that the Federal Reserve Banks are very privileged, privately-held corporations. The Banks pay no income taxes because the IRS has no jurisdiction over their financial dealings, which are, by law, exempt from audit and oversight.
The Banks pay no income taxes because the IRS has no jurisdiction over their financial dealings, which are, by law, exempt from audit and oversight. Without the need to seek Congressional budget approval for expenditures, they have quietly amassed a private air force of 47 Lear jets. Recently the Fed has been criticized in business publications for splurging on new headquarters in Minneapolis, Dallas, and Atlanta. They'll spend a half-billion dollars to construct three posh marble fortresses containing shooting ranges, health clubs, and other amenities not found at most Fortune 500 company headquarters. The Fed admits to taking over 2 billion dollars from citizens each year to fund its day to day operation and periodically purchases expensive antiques and fine artwork. They sponsor chamber music recitals in their lobbies. Their furniture alone is valued at 800 million dollars. Gonzalez, who will retire from Congress this December, was one of the Fed's most vocal critics. He was also one of their only critics. Gonzalez's retirement is very bad news for the taxpayers. Without the revelations uncovered during his tenure we would have little knowlege of the Federal Reserve’s activities.
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