Ron Paul had a bit of an awkward moment this week when he realized he contributed to 16 months of government waste. If you just did a double take, yes, Ron Paul is the one who is supposed to be against that kind of stuff.

Back in February of 2010, Ron Paul made allegations that the Federal Reserve was involved in getting a $5.5 billion loan to Saddam Hussein during the Iran-Iraq war, and helping the Watergate burglars get cash.

Bernanke was a bit caught off guard.

"Well, congressman, these specific allegations you've made, I think are absolutely bizarre, and I have absolutely no knowledge of anything like what you've just described," Bernanke replied.

Regardless of how bizarre Paul’s allegations were, they sparked a 16-month investigation by the Fed’s Office of the Inspector General (OIG), which, in case you were wondering, turned up absolutely nothing.

And while it was turning up nothing, five employees of the IOG were wasting their time on it.

“Because of the extent of the information we reviewed during the course of our work, we had one project leader assigned full-time for the duration of the project, one full-time employee who was assigned from the beginning to the end of fieldwork, and three others who supplemented the team on a part-time basis,” said John Manibusan, spokesperson for the office.

The salaries of these employees aren’t public, but the average federal employee makes $126,000.  Let’s be conservative, and estimate that each employee makes $100,000. Let’s then say that each of the “part-time” folks who were assigned to the project made one third of that. That means that we wasted almost $300,000 on a completely ridiculous investigation conducted so Ron Paul could continue his tirade against the Federal Reserve.

So, as an exercise in ridiculousness and also to illustrate how much money went down the tube here, let’s describe how much money this little digression cost: While the Watergate Hotel is now closed in renovation/foreclosure, the most recent rate for staying at the hotel was $150 a night. For $300,000, Ron Paul could have stayed at the hotel for five and a half years.

Now, admittedly all of that is a total guess-timation, one that does does not include all of the extra money the watchdog spent on the investigation, which included a trip to the Gerald R. Ford Presidential Library and Museum in Ann Arbor, Mich. and more trips to do employee interviews at Federal Reserve Banks.

And all for what?

Ron Paul got his original ideas from a man who is now a professor at the University of Texas: Robert Auerbach.

Auerbach wrote a little-known book called “Deception and Abuse at the Fed,” which he said contains hard proof that Paul’s allegations were true. I talked to him on the phone, where he said that the investigation left out obvious evidence.

“All they had to do was look at my book,” he said. “The proof is there.”

He said the loan to Saddam Hussein was in the form of a $5.5 billion agricultural loan processed through the Fed, which the Iraqi government then used for weapons. He said also that the cash given to the burglars came through the Philadelphia Fed by way of a small bank that is now closed, and that was proven in a timeline he pulled from the notes of former Fed Chief Arthur Burns, kept at the University of Michigan — something he charges the OIG with “retyping” and of leaving crucial information out of.

But the OIG denies leaving anything out, and says that its report was more extensive than the one in Auerbach’s book. Further, the OIG says it attempted to contact Auerbach by recommendation of Ron Paul.

“During our review, we developed a detailed chronology of the board's actions following the Watergate burglary based on multiple documents from the board and the FBI, which provides a more complete picture of the events than any individual document,” said Manibusan.

But, Auerbach isn’t convinced and said he isn’t surprised that the OIG left all of this information out, because they aren’t particularly independent.

“One of the problems with the OIG is that in the rules cannot issue any reports that Bernanke doesn’t want issued, and he’s not an independent inspector general, he is appointed by Bernanke and the board of directors,” he said.

Manibusan disputes this as well.

“Congress established the OIG as an independent oversight authority to conduct audits and investigations of the Board,” he said. “The OIG received the board's full cooperation and was granted unfettered access to information regarding this special inquiry. The board did not restrict our review in any manner.”

All of this back and forth is entertaining, and perhaps prove the point: All of this is a total waste of time, energy and money.

Ron Paul’s office has yet to put out any statement on this issue, and my bet is that he won’t. His wasteful government spending is probably too much for the man to swallow, much less his campaign.