This Week in Scandals: Accounting, AIG and More

[Political Heretic]

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Investigations
This Week in Scandals: Accounting, AIG and More
by Alexandra Andrews, ProPublica - April 3, 2009 1:45 pm EDT

Every week, we take stock of how the week unfolded for the stories we're tracking in Scandal Watch (see the right sidebar). Here is how we do it <1>. And, as always, feel free to suggest new scandals <2>.

1. Market Crisis <3>

CPAs rejoice! Esoteric accounting rules are finally getting their 15 minutes of fame. Under pressure from lawmakers <4> and banks <5>, the Financial Accounting Standards Board relaxed its mark-to-market rules yesterday <6>, effectively letting banks have a greater say in how they value their toxic assets. (Clusterstock explains the rule change in layman's terms <7>, i.e., with cows instead of securities.) Some financial analysts warn that the move could undermine the Treasury Department's goals <8>, but others think the impact will be modest <9>. Either way, stocks soared <10>.

All right, that's enough rejoicing, accountants: ProPublica reviewed records from a federal oversight board and found that "some of the nation's largest accounting firms failed to properly examine the reserves <11> that banks and other lenders set aside to cover losses."

Meanwhile, government watchdogs testified at a congressional hearing this week that the Treasury is still doing a poor job of providing details <12> about its bailout program. (The Treasury's bailout Web site is a little hazy on the details <13>, too.)

In other bailout news, some banks have begun returning the Treasury's funds <14>, and the Wall Street Journal reports that a tweak to bailout contracts <15> back in October could cost taxpayers billions of dollars. Finally, a former senior official in the Bush Treasury has written an account of the previous administration's efforts to deal with the financial crisis, which he says were hampered by "chronic disorganization <16>."

Much more including 2. AIG and 3. John Murtha
http://www.propublica.org/article/this-week-in-scandals-accounting-aig-and-more-403#9709

That stuff about mark-to-market is really scary.

[PM Martin]

1. You should feel honored letting the banks value their assets as they please.

:sarcasm:

[Political Heretic]

2. lol yeah it is my privilege to let banks screw me with my pants on.