Once again, we need to follow the money

When Congress established the $700 billion bailout fund, it promised strict and thorough oversight. Over a month later, with $290 billion already committed, we have our answer: There isn’t any.

The legislation called for a special inspector general within the Treasury to audit and investigate the bailout, reporting on what assets the government is acquiring, its reasons for doing so and their value. The special inspector has yet to be named, although the Bush administration is said to have a candidate lined up, but there’s a question whether the Senate can confirm him in a timely fashion.

Congress has yet to name the members of a special congressional oversight panel. The deadline under the law for the first oversight report by that panel has passed and the panel, when it’s finally named, may not be able to make the Jan. 20 deadline for a much more detailed report.

The Treasury department’s regular inspector general, Eric Thorson, told The Washington Post, “It’s a mess. I don’t think anyone understands right now how we’re going to do proper oversight of this thing.”

Thorson is doing what he can with a few dozen of his own people drawn from other duties to work on the bailout part time but he said at least 100 full time people are needed in the special inspector general’s office — that’s the post that has yet to be filled.

The bailout law also created a puzzling entity called the Financial Stability Oversight Board, whose five members include Treasury Secretary Henry Paulson and Federal Reserve chairman Ben Bernanke, who would effectively be doing oversight over themselves. In any case, the board has no staff and a congressional aide told the Post, “It’s sort of a joke in terms of oversight.”

Meanwhile, House Republican leader John Boehner is complaining that the Fed has yet to comply with his request for the financial entities that have received nearly $2 trillion in loans under a separate and much larger liquidity program run by the Fed.

Congress promised the hallmarks of the federal government’s massive intervention in the markets would be oversight and transparency. A top priority of its lame duck session must be to make good on that promise.