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Once again, we need to follow the money

By
November 14, 2008

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.

2 Responses to Once again, we need to follow the money

  1. jwritesel

    November 14, 2008 at 7:33 pm

    We seem to be flopping all over with these problems with the economy. Meanwhile I just read that the Europeans and the Russians met recently without us and think they want to have a meeting along the lines of the Bretton Woods meeting. In fact they want something as significant as a Bretton Woods 2 and are willing to work around Bush if need be. The plan is to call a meeting in April when Obama will have the reins if Bush refuses to work with them during this meeting in November. I know this original meeting had a significant impact on our country for several decades now. What I do not know is the specifics of the original Bretton Woods agreement and just what are the Europeans and Russians up to with this new proposal. I was wondering if any of you out there could shed some light on this. I believe this will have a big impact on our country and think it could have quite an impact on our dollar.

  2. ckaye99

    November 15, 2008 at 4:22 pm

    Bravo, McFeattors. There is not enough transperancy, that is for sure. Paulson has too much leeway – why is it so hard for us to get oversight? The problem to begin with was lack of oversight, so what do the dumbass Americans do? Start another mega project with no oversight! They must think we are stupid. We aren’t – it just isn’t our government any more.