Yesterday, Rep. Ron Paul quizzed Ben Bernanke of the Federal Reserve about that group's involvement in relation to Watergate and to the funding of Saddam Hussein of Iraq (video: peekURL.com/vqxfnme ). Bernanke called that questioning "absolutely bizarre", and several sources (some listed below) joined in.

As it turns out, the Fed in fact did have some sort of involvement with both Watergate and with money that was sent to Saddam, as documented in the book "Deception and Abuse at the Fed: Henry B. Gonzalez Battles Alan Greenspan's Bank" (link). From the blurb:

...Robert Auerbach, a former [U.S. House of Representatives] banking committee investigator, recounts major instances of Fed mismanagement and abuse of power that were exposed by Rep. Gonzalez, including: * Blocking Congress and the public from holding powerful Fed officials accountable by falsely declaring--for 17 years--it had no transcripts of its meetings; * Manipulating the stock and bond markets in 1994 under cover of a preemptive strike against inflation; * Allowing $5.5 billion to be sent to Saddam Hussein from a small Atlanta branch of a foreign bank--the result of faulty bank examination practices by the Fed; * Stonewalling Congressional investigations and misleading the Washington Post about the $6,300 found on the Watergate burglars. Auerbach provides documentation of these and other abuses at the Fed, which confirms Rep. Gonzalez's belief that no government agency should be allowed to operate with the secrecy and independence in which the Federal Reserve has shrouded itself. Auerbach concludes with recommendations for specific, broad-ranging reforms that will make the Fed accountable to the government and the people of the United States.

See also hnn.us/blogs/entries/123737.html and this.

Here are some of those who reflexively supported Bernanke without doing even a little bit of research. The reader is encouraged to add more in comments. Unless otherwise noted, all of the following mock Paul in one way or other, none of them even hint that the Fed was in fact involved in some ways with both issues, and none of them have corrections at post time:

* AllahPundit hotair.com/archives/2010/02/24/ron-paul-grills-bernanke-
wasnt-the-fed-involved-with-saddam-and-in-watergate (no correction at post time)

* Sudeep Reddy of the Wall Street Journal
blogs.wsj.com/economics/2010/02/24/
ron-paul-on-watergate-saddam-hussein-and-the-federal-reserve/

* NPR npr.org/blogs/money/2010/02/
ron_paul_ben_bernanke_and_wate.html

* Heather Horn of The Atlantic theatlanticwire.com/opinions/view/opinion/
Happy-Hour-Vid-Ron-Paul-Sees-Feds-Hand-in-Watergate-Saddam-Hussein-2641

* Elizabeth MacDonald of Fox News' business channel:
emac.blogs.foxbusiness.com/2010/02/24/prof-bernanke-instructs-congress-again

* Jordan Fabian of The Hill doesn't mock Paul but also doesn't provide background: thehill.com/blogs/blog-briefing-room/news/
83517-bernanke-calls-ron-pauls-allegations-absolutely-bizarre

* Huffington Post huffingtonpost.com/2010/02/24/ben-bernanke-snaps-at-ron_n_474874.html (Note that one of their contributors posted a link to the book at huffingtonpost.com/j-bradley-jansen/bizarre-bernanke_b_475230.html)

Please add more in comments.

UPDATE: Paul has read into the Congressional Record a statement he received from Auerbach (link):

I thank Congressman Ron Paul for bringing to the public’s attention the Federal Reserve coverup of the source of the Watergate burglars’ source of funding and the defective audit by the Federal Reserve of the bank that transferred $5.5 billion from the U.S. government to Saddam Hussein in the 1980s. Congressman Paul directed these comments to Federal Reserve Chairman Ben Bernanke at the House Financial Services Hearing February 24, 2010. I question Chairman Bernanke’s dismissive response...