Watchdogs: Treasury won't disclose bank bailout details

[masuki bance]

WASHINGTON — The massive programs designed to rescue the nation's financial sector are operating without adequate oversight, with vague goals and limited disclosure of their details to the taxpayers who are paying for them, government watchdogs told a Senate panel Tuesday.

The Troubled Asset Relief Program, or TARP, was launched in the midst of last fall's collapse of the nation's banking system and is designed to get loans flowing to businesses and individuals.

But "without a clearer explanation" about parts of the program, "it is not possible to exercise meaningful oversight over Treasury's actions," said Elizabeth Warren, a Harvard Law School professor who leads a special congressional oversight panel monitoring the TARP program. Her comments came in a Senate Finance Committee hearing on the bailout program.

Noting that TARP passed Congress six months ago, Warren said that her group has repeatedly called on the Treasury Department to provide a clear strategy for the program — and that "the absence of such a vision hampers effective oversight."

Although she has asked Treasury to explain its strategy, "Congress and the American public have no clear answer to that question."

TARP is one of several programs the government has launched in recent months to help ailing institutions and even bolster healthy banks. Warren singled out one program, known as TALF, for appearing to involve "substantial downside risk and high costs for the American taxpayer" while offering big potential rewards for private interests. She said the public information about that program was "contradictory, promoting substantial confusion."

The Government Accountability Office shared some of the same concerns, saying in a new report that "Treasury continues to struggle with developing an effective overall communication strategy" for the TARP program.

Beyond that, the GAO's report pointed out the difficulty in even measuring whether TARP is working. As of March 27, the Treasury Department had handed out more than $300 billion of the $700 billion in approved TARP funds, the GAO said.

The majority of that money went to banks large and small around the country. And there are signs that credit is flowing from those banks; the GAO said that several hundred billion dollars in new loans were processed by the largest TARP recipients in December and January.

But crediting TARP for that is difficult, given the range of actions the government has taken since October. "Isolating the effect of TARP's activities continues to be difficult," the GAO's Gene Dodaro said in his prepared testimony.

The Treasury Department, in a statement, said that "transparency and accountability are central to ensuring that taxpayer funds are spent wisely," and noted that the department is actively working to respond to the recommendations of GAO and other oversight bodies. Among other things, the department has hired more staff and expanded its survey on bank lending activities.

...

Warren's oversight panel made news earlier this year with its report that Treasury's bailout programs had overpaid by an estimated $78 billion in its transactions with the nation's ailing financial institutions. She said that issue is still under investigation.

http://www.mcclatchydc.com/251/story/65195.html

Biden should get on these guys and get that website going.

[high density]

1. Clear strategy?

It's rather late now to be whining about it. The strategy was to keep our financial system from imploding on itself. Now the focus seems to be on PPIP.

http://financialstability.gov

[avaistheone1]

2. No it is not too late. Congress promised transparency.

It is our money, and this is a democracy when I last checked.

This is our government, and this is one of the largest wealth transfers in history, we had better know what the hell is going on.

:grr:

[Dappleganger]

3. Paulson behaves as if he is above the Law...

I watched an interview which Dan Rathers had with Ms. Warren a few months ago and the treasury dept. as well as Paulson have acted like this from the beginning--they wanted the power, the money and no accountability from the very beginning of TARP.

One day when all of their corruption is completely exposed, we'll probably be listening to clips of her comments warning us of the coming problems because of the lack of transparency, and wondering why we didn't listen to her.

[Thrill]

4. Has she been to financialstability.gov ?