Tuesday, July 21, 2009
Two senior congressional Democrats pointedly called on the Obama administration Tuesday to make the $700 billion financial bailout program more visible and accountable to taxpayers, with one complaining that Treasury's approach to the fund is, "Don't ask, don't tell."
Edolphus Towns of New York, chairman of the House Oversight and Government Reform Committee, and Sen. Max Baucus of Montana, who heads the Senate Finance Committee, insisted that Treasury Secretary Timothy Geithner adopt recommendations from a government watchdog that the department has resisted.
"There is no evidence that Treasury has made any attempt to determine whether (financial rescue) funding has resulted in increased lending and whether that has had any effect on reducing unemployment," Towns said.
The criticism came as the oversight committee heard testimony from special inspector general Neil Barofsky, who oversees the massive Troubled Asset Relief Program. Barofsky on Tuesday delivered a quarterly report to Congress sharply critical of Treasury's reluctance to better track how federal bailout money is being spent.
"The Special IG's recommendations on transparency are critical to the success of the program, and I will be pressing the secretary of Treasury to adopt these standards," Baucus said.
Towns added: "The taxpayers now have a $700 billion spending program that's being run under the philosophy of 'don't ask, don't tell."
In his report, Barofsky said Treasury has accepted some of his recommendations for greater accountability, but that the department has not taken steps to require all TARP recipients to report on their actual use of funds. He said Treasury also should report the values of its investments in banks and other financial institutions, disclose the identity of borrowers under a nonrecourse loan program and disclose trading activity under a public-private investment fund.
Barofsky also pointed out that in response to a survey by his office, banks were able to provide information on how they used TARP money even though Treasury has declined to seek similar information.
"The evidence is as we suspected," Barofsky said. "Contrary to Treasury's suggestions, banks can and should be required to report on how they're using funds."