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Nobody Knows Where Bailout Cash Went

From Mcclatchy:

Where did that bank bailout go? Watchdogs aren’t entirely sure

By Chris Adams, Mcclatchy Newspapers – Sun Aug 9

WASHINGTON — Although hundreds of well-trained eyes are watching over the $700 billion that Congress last year decided to spend bailing out the nation’s financial sector, it’s still difficult to answer some of the most basic questions about where the money went.

Despite a new oversight panel, a new special inspector general, the existing Government Accountability Office and eight other inspectors general, those charged with minding the store say they don’t have all the weapons they need. Ten months into the Troubled Asset Relief Program, some members of Congress say that some oversight of bailout dollars has been so lacking that it’s essentially worthless.

"TARP has become a program in which taxpayers are not being told what most of the TARP recipients are doing with their money, have still not been told how much their substantial investments are worth, and will not be told the full details of how their money is being invested," a special inspector general over the program reported last month. The "very credibility" of the program is at stake, it said.

Access and openness have improved in recent months, watchdogs say, but the program still has a way to go before it’s truly transparent.

For its part, the Treasury Department said it’s fully committed to transparency, and that it’s taken unprecedented steps to report the status of TARP to the public. It regularly posts information on which banks have received money, as well as details about each of those transactions. Further, Treasury said, it doesn’t agree with all of its watchdogs’ recommendations, which it said could hamper the program’s effectiveness.

TARP was passed in the midst of last fall’s financial meltdown as a way to keep American banks from falling deeper into the abyss.

The program was controversial from the start. Its supporters say it’s helped spark bank lending in the country, but critics say it’s unfairly rewarded the big banks and Wall Street firms that pushed the economy to the brink.

The program also has undergone a major transformation. When the Bush administration first went to Congress for the money, TARP’s main purpose was to buy up hundreds of billions of dollars in bad mortgages and so-called mortgage-backed securities that were bought and sold on Wall Street .

Today, TARP consists of 12 programs that sent those hundreds of billions of dollars to big banks, but it’s also bailed out auto companies, auto suppliers, individuals delinquent on their mortgages, small businesses and American International Group , the big insurance company.

The watchdogs now must oversee the maze that TARP has become.

Just because a lot of people are watching, however, doesn’t mean they get everything they want to see.

One of the most prominent watchdogs is Elizabeth Warren, a Harvard Law School professor who chairs a TARP oversight panel created by Congress .

Her panel has released 10 major reports that examine TARP’s plans and policies, finding that much of the work by the Treasury and the Federal Reserve has been opaque, with unclear or contradictory goals.

One report took Treasury to task for vastly undervaluing more than $250 billion in transactions with the country’s major banks, and another suggested several ways to revamp federal regulation over the financial sector. Other reports have criticized the Treasury for its initial defensiveness in opening its books.

Despite its mandate, however, the panel doesn’t have subpoena power. That means it can ask, but can’t compel, officials from Treasury, the Federal Reserve or the nation’s banks to testify…

In June, in an otherwise mundane congressional hearing, Republican Rep. Kevin Brady of Texas surprised Warren with an aggressive critique of the panel, saying it’s failed to help taxpayers understand what Treasury is doing with the billions at its disposal…

Brady amplified his comments in an interview last month, saying that some of the panel’s work seems like a "PR ploy" and that "the moment has passed" for Warren’s group to play the role Congress envisioned.

His feelings have been partially echoed by two other members of the panel, Rep. Jeb Hensarling of Texas and former Sen. John E. Sununu of New Hampshire , both Republicans appointed by congressional GOP leaders (the other three members were appointed by Democrats).

Both have accused the panel of mission creep — of straying from the central goal of determining exactly how, and how well, Treasury is doing its job.

Hensarling said that "taxpayers have not received answers as to whether the TARP program works, how decisions are being made or what the banks are doing with the taxpayers’ money."

The other primary watchdog is Neil Barofsky, a special inspector general named in November by Bush specifically to track TARP funds…

Barofsky’s office has long advocated that the Treasury require banks to detail how the TARP money they’ve received has been used. The department has refused, saying that once an investment is made in a big bank, it’s not possible to track how it’s used.

Barofsky’s office rejected that assertion, and did its own survey of 360 institutions, finding that most could say how they’d used the money.

"Treasury’s reasons for refusing to adopt this recommendation have been squarely refuted by" the inspector general, his office reported to Congress .

Of course there is nothing to indicate that this is limited to TARP.

Who can say where any of the billions of dollars siphoned out of the taxpayers’ pockets has gone?

And who can say what good it has done?

If TARP isn’t doing anything like what it is supposed to do, why was it needed in the first place? And why is it still operating?

And again, the exact same question can be asked about the so-called ‘stimulus bill.’

This article was posted by Steve Gilbert on Monday, August 10th, 2009. Comments are currently closed.

13 Responses to “Nobody Knows Where Bailout Cash Went”

  1. jobeth

    Don’t look for a surpized expression on this gal’s face if it is found out that most of this money winds up in the coffers of the commie orgs and/or the faaaaar left orgs that Obalmy and his minions love so much…

  2. 12 Gauge Rage

    jobeth, this is nothing new. History has shown that Julius Caesar forcibly seized lucrative estates from prominent Roman citizens in order to repay the political favors that put him in power. Gotta pay off those puppet masters or they’ll cut the strings and find another lying Pinocchio to do their bidding.

    • jobeth

      Yep..you are right…

      But somehow, even though I know that we as Americans have always been scammed and/or cheated by one politician or another…right from the first….this is the first time communism has gotten so blatant from so may highly seated people.

      It’s always been there (since communism’s inception ), but under cover. Now its our in the open to the point that no one could claim they don’t know. No one. And of course it has to be funded somehow…so I guess we are the lucky ‘donators”

      Sickening

  3. Rusty Shackleford

    In the military, we used to call this “the giant sucking sound” when it came to money spent that just vanishes as quickly as it appears.

    I knew in my gut that when the floodgatges were opened that accountability for it was lost immediately. Coupled with the fast and loose way that this administration loves to just toss it around like it’s confetti at a parade, it just makes me sick.

    No checks, no balances…and let’s give everybody free money. Helter Skelter to financial ruin. Nice way to mark a presidency.

    • jobeth

      Is it any wonder all the congress drives those great big GAS GUZZLER limos with drivers? Or MUST have a private Jet at their beck and call…you know, one large enough to include their family and friends (and lovers)?

      I mean they can’t be expected to rub shoulders with the great unwashed…especially the “well dressed” ones…who attend tea parties and town hall meetings.

  4. proreason

    Wild hunch.

    Hundreds of billions of bailout money went into the pockets of Obamy supporters.

  5. catie

    After looking at that picture and reading, I lost my lunch.

  6. Right of the People

    I’m sure Mr. Fwank could tell us where it went. Maybe for toys for him and his boytoy?

  7. pdsand

    Of course the question is flawed. Nobody should know what happened with the bailout money after the banks received it, because after that it’s the bank’s business what they do with it. Ergo, if you want to be able to account for taxpayer dollars, don’t go around giving it away to people or banks willy-nilly. After that, it is indeed a giant sucking sound, and we’re all a trillion dollars in debt.

  8. 12 Gauge Rage

    We’re more than just a trillion dollars in debt. The left has definitely provided the rope from which to hang itself.

  9. Liberals Demise

    Look at the picture and ask yourself, “Why are these a$$hole$ laughing?”

    Because the just took the American taxpayers to the bank and cashed our grand kids future for today’s gains!!

    They “ALL” must go!!!!!!!

    • proreason

      “the just took the American taxpayers to the bank ”

      more like: “We just stuffed our pockets and got away with it again as we took the american tapayers to the bank”

      or

      “The Big Con has worked again. These gullible idiots are as easy to trick as eager puppies”

    • Liberals Demise

      But don’t call them on it or “YOU” are labeled, “UN AMERICAN, KOOK, AGITATOR, NAZI, MOB or RABBLE”.


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