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Clay, Paul at odds on House finance panel

This article first appeared in the St. Louis Beacon, Jan. 20, 2012 - WASHINGTON - A month after U.S. Rep. William Lacy Clay, D-St. Louis, became the ranking Democrat on a House finance panel, he was startled to learn that its chairman had called a witness with prior links to what Clay calls a "neo-Confederate" group.

That chairman, Rep. Ron Paul, R-Texas, dismissed Clay's concerns about the witness' possible "hate group" affiliation as a mere character attack. "He told the media that since I have no ideas, I resort to race-baiting," Clay recalled in an interview. "That's a typical reaction for Rep. Paul."

In the months since that hearing last February, Paul has emerged as a contender for the Republican presidential nomination, placing third in this month's Iowa caucuses and second in the New Hampshire primary.

With Paul spending much of his time on the campaign trail, Clay says the panel -- the House Financial Services subcommittee on domestic monetary policy and technology -- has not really "done anything," other than hold hearings. "There's been no legislation coming out of the subcommittee," he told the Beacon.

According to the committee's website, Paul's panel held nine hearings last year, but no "markup" sessions -- during which legislation is amended and approved. The Finance Committee's other five subcommittees held more hearings and all but the oversight panel also marked up legislation.

The eclectic topics of Paul's hearings have been on "issues like why we should revert to the gold standard" and abolish the Federal Reserve, said Clay, who opposes both ideas. Other hearings have examined the impacts of monetary policy, the transparency of the Fed, and the best ways to restore the dollar's value.

The genial and intelligent Paul "brings some interesting people to the committee to discuss issues," said another subcommittee member, Rep. Blaine Luetkemeyer, R-St. Elizabeth. "But I don't necessarily agree with his philosophy... Auditing the Fed is one thing, but doing away with it is another."

Clay and Paul are poles apart on monetary issues -- with the St. Louisan often backing Keynesian government solutions and the Texan advocating the libertarian "Austrian School" hands-off approach -- but Clay said he was more concerned by some of Paul's actions or past writings that some interpret as being "hurtful" to minority groups.

Clay Questions Witness, Newsletter Items Linked to Paul

At last February's hearing, Clay questioned whether economics professor Thomas J. DiLorenzo of Loyola University Maryland should have appeared as a witness, mainly because of his previous affiliation with a group called the League of the South's Institute for the Study of Southern Culture and History. Clay complained that the League of the South "has been identified as a hate group by the Southern Poverty Law Center."

DiLorenzo merely shook his head at Clay's accusations and did not respond directly at the hearing. But Paul, who said he invited the witness because of his expertise in the Austrian School of economics, told reporters after the hearing that the St. Louis Democrat's comments were mere character attacks. "That's typical of people who can't compete on ideas; they have to try to discredit the individual," Paul told Reuters.

But Clay was hardly the only person to object to the witness. Washington Post columnist Dana Milbank wrote that the choice of witnesses "raises doubts about Ron Paul and his causes if this is the best he can come up with." A blogger for the Wall Street Journal described the hearing as "particularly shambolic." And a Salon columnist included the hearing's witnesses in listing "a Republican parade of kooks and shills" called to testify that week at various House committees.

While Clay did not want to over-emphasize the incident, he said last week that he had problems with some past writings linked to Paul. "I don't agree with some of his previous publications about African Americans, which are hurtful and really just ignorant," said Clay. Even if Paul may not have personally written such items in newsletters or other publications, Clay said they have been "attributed to him."

Those articles, which appeared in various newsletters associated with Paul between 1998 and 1994, briefly became an issue in the GOP presidential campaign in Iowa this month. An article in the New Republic, reported that the newsletters repeatedly defended "prominent racists," warned of "race war," advocated a separate state for whites in South Africa and defended a former baseball owner who had once referred to players using the N-word.

Paul could not be reached for comment for this article, but he has distanced himself from such newsletter items and accused political opponents of "smears" for citing them. At the Jan. 7 Republican debate in Iowa, Paul dismissed the newsletter items as "things written 20 years ago ... that I did not write." Challenging the debate's moderators to examine his personal ideals and relations, Paul said: "One of my heroes is Martin Luther King because he practiced the libertarian principle of peaceful resistance."

Paul said he was the only presidential contender who "understands true racism in this country in the judicial system -- and it has to do with enforcing the drug laws." He said blacks are arrested, prosecuted and imprisoned "way disproportionately" than other racial groups. "Poor minorities have an injustice" in the legal system, Paul said, "and they have an injustice in war as well," suffering disproportionately in military campaigns.

In an interview, Clay said he had no complaints in his personal dealings with Paul and said that he had seen no signs of racism "with me or with anyone that I've witnessed" on Capitol Hill.

"Before I became the [subcommittee] ranking member, he and I had a relationship that was rather friendly," Clay said. "We don't agree on much, although I do agree on some of his foreign policy initiatives and demilitarization efforts." Paul has argued against U.S. interventions abroad and for faster withdrawal from Afghanistan.

Paul's Legislative Record

A doctor by profession, Paul, 76, was first elected to Congress in 1976 and has served three separate stints, totaling about 23 years. A Washington Post study of his record found that only one of the 620 bills Paul sponsored became law -- a 2009 measure that allowed the sale of a customhouse in Texas; only four of those bills were voted on by the full House.

Regarded by some House colleagues as intelligent and genial, Paul "has often shown little interest in the laborious one-on-one lobbying required to build a coalition behind his ideas," the Post article said -- noting that none of the 47 bills he sponsored in Congress last year moved beyond committee. Those included bills to allow private groups to coin their own money, require U.S. withdrawal from the United Nations, and repeal a federal law banning guns in school zones.

While his legislative success has been limited, Paul -- the author of more than a dozen books -- has amassed a huge nationwide following because of his libertarian views and his outspoken criticism of U.S. monetary and foreign policy. He also has become the highest-profile advocate of what is known as the "Austrian School" of economic thought.

That's why Paul declared in his election-night speech in Iowa that "we are all Austrians now" -- a reference to his monetary views and their following. The Austrian-school economists, following the writings of the late economist Ludwig von Mises, generally reject the notion that government action can stabilize macroeconomic fluctuations.

And one of their main targets is the activist Federal Reserve. In fact, the Paul-sponsored bill that has attracted the most support in this Congress is the "Federal Reserve Transparency Act," which calls for a full and complete audit of the Federal Reserve by the Government Accountability Office.

"With limited transparency, oversight, and accountability, it is high time that Congress bring the Fed's actions into public view," Paul said.

Paul has indicated he would not seek re-election to the House. Leutkemeyer said Paul is "a very bright individual who has his own views on monetary policy, which I don't necessarily agree with, but I appreciate from the standpoint that he has thought through what he believes is the right approach" to monetary policy and the Fed.

Former Sen. Jim Talent, a St. Louis area Republican who is backing Mitt Romney's presidential campaign, told the Beacon last week that he found Paul to be likeable and intelligent when both men served in the U.S House in the 1990s.

"I like him and I agree with him on some issues," Talent said. "But I disagree very strongly with many of his views on foreign policy," which tend towards isolationism. "But he's been a fine congressman and he's run a vigorous [presidential] campaign."

Rob Koenig is an award-winning journalist and author. He worked at the STL Beacon until 2013.