|  | | 2008 News and Press Releases | | |
HEADLINE NEWS:
Little Transparency In How Bailout Money Is Being Spent, Say Lawmakers, Legislators Want Inspector General Nominee To Report On Spending; 'Like Dodge City Before The Marshals Showed Up
Neil Roland
FinancialWeek . November 17, 2008
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EXCERPT: Congressional frustration with the lack of transparency in the Treasury Department’s $700 billion rescue spilled over today into a hearing on the administration’s nomination of a special inspector general for the program. “Your job is not for the faint-hearted,” Sen. Ron Wyden (D-Ore) told federal prosecutor Neil Barofsky at a Senate Finance Committee hearing. The rescue program “is like Dodge City before the marshals showed up.” Mr. Wyden’s comments were echoed by senators of both parties who said Treasury Secretary Henry Paulson wasn’t adequately accounting for how the $290 billion committed thus far was being spent, to whom it was going, and what conditions were attached. They asked the appointee to make sure that money being given to banks isn’t being used improperly for hoarding, excessive executive pay, dividends or acquisitions of other banks. They also wanted an explanation of how the administration came to annul the original purpose of the rescue—to purchase the troubled assets of financial institutions—less than two months after legislation was passed and signed by President George W. Bush in September. “To say that this was a surprise is an understatement,” said committee chairman Max Baucus (D-Mont.). “We are going to find out why the first plan was rejected and a new plan was developed." […] Mr. Barofsky, 38, is a prosecutor with the U.S. attorney’s office in New York and has headed the unit’s mortgage fraud group since the summer. The administration’s original plan had no provision for oversight, and the legislation sought to provide a couple of layers of monitoring. In addition to the inspector general, who is to get a $50 million budget, the legislation calls for appointment of a congressional oversight panel, but not all of its members have been appointed yet. |
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