Geithner's New Bailout Rules: No Political Interference Allowed
Here is a list of Treasury Secretary Tim Geithner's new rules on institutions getting a piece of the remaining $350 billion of the $700 billion government bailout/rescue plan, in response to criticism from lawmakers and others that the bailout is not transparent enough.
Some of broad statements of principle and are probably better-intentioned than practical, such as Treasury's pledge to "ensure that political influence does not interfere" with bailout disbursement. (Good luck, there.)
But others are more specific.
Here they are:
-- Combating lobbyist influence in the bailout process: The Treasury Department will implement safeguards to prevent lobbyist influence over the program, including restricting contacts with lobbyists in connection with applications for, or disbursements of, bailout funds.
-- Keeping politics out of funding decisions: The Treasury Department will ensure that political influence does not interfere with bailout decision-making, using as a model for these protections the limits on political influence over tax matters.
-- Certification to Congress on objective decision making: In reporting to Congress, the Office of Financial Stability (OFS) will certify that each investment decision is based only on investment criteria and the facts of the case.
-- The investment process will be transparent and based on objective criteria:
- Only banks recommended by the primary bank regulator will be eligible for capital investments.
- OFS will publish a detailed description of the investment review process undertaken by the regulators and OFS.
- The Treasury Department will ensure adequate resources exist to process applications as quickly as possible with priority to the date of the application as received by OFS and will formulate procedures to ensure integrity and regularity in the application process.
"American taxpayers deserve to know that their money is spent in the most effective way to stabilize the financial system," Geithner said in a statement. "Today's actions reaffirm our commitment toward that goal."
January 27, 2009; 10:55 AM ET
Categories: The Ticker | Tags: Geither, bailout
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