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Federal District Court Obstructs Lawsuits Challenging Authority for Bailouts

Written by Subject: Federal Reserve
Judiciary Scuttles Motions Demanding U.S.
Produce Evidence of Constitutional Authority

Late last week, WTP Chairman and constitutional activist Robert Schulz filed a federal lawsuit in United States District Court in Albany seeking to halt the execution of the emergency bailout of Wall Street insurance giant American Insurance Group, AIG.  On Wednesday, Schulz filed a second federal lawsuit seeking to block the larger Wall Street bank bailout currently being negotiated through the U.S. Congress.
Yesterday, while ignoring the dissimilar legal issues raised in the two lawsuits, the U.S. District Court issued an Order combining the two cases into a single case and denying the applications for injunctive relief requested.  The Court, in effect, ducked a judicial (and very public) hearing to examine the critical legal question at the heart of the bailouts: What Constitutional authority exists for the U.S. Government or Federal Reserve to use public (taxpayer) funds for definitively private purposes? 

Again, what legal authority allows the U.S. Government to directly purchase the distressed assets and contracts of privately owned Wall Street firms for the express purpose of mitigating their private investment risks and losses? 


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