Treasury Chief Responds to Bailout Critics
Updated at 5:42 p.m. Jan. 28
As the government prepares to pump out hundreds of billions of dollars to stimulate the U.S. economy, Treasury Secretary Timothy F. Geithner is moving to make changes to the way federal officials are handling the other big pot of money aimed at bailing out the financial industry.
Geithner yesterday took steps to restrict contact between lobbyists and the officials reviewing applications under the $700 billion financial bailout program. Using similar tax matters as a model, the Treasury Department's Office of Financial Stability will have to sign off on each investment being "based solely on objective criteria."
As he revamps the plan for spending what remains of the $700 billion, Geithner is confronting a menu of less-than appetizing choices for fixing the banking industry. He is meeting today with members of a congressional oversight panel that has been especially critical of the process.
[Meeting with Geithner is chairwoman Elizabeth Warren, a Harvard law professor; Neil M. Barofsky, the special inspector general for the program; and Gene Dodaro, acting comptroller general for the Government Accountability Office.] Congressional oversight panelists Damon Silvers, associate general counsel for the AFL-CIO; Richard H. Neiman, New York's superintendent of banks; Rep. Jeb Hensarling (R-Texas) and former Sen. John E. Sununu (R-N.H.) also met with Geithner.
The push for transparency comes after oversight pledges from the Bush administration and former Treasury Secretary Henry M. Paulson Jr. were largely criticized by the bipartisan oversight panel.
Earlier this month, the group released a scathing report, accusing the Treasury Department of failing to live up to its obligations to taxpayers about disclosure and how it proposes to fix the foreclosure crisis.
In the 45-page report, panelists said the Treasury Department hadn't helped borrowers refinance or deal with inflated mortgages.
"The panel's initial concerns about the (program) have only grown, exacerbated by the shifting explanations of its purposes and the tools used by Treasury," the report said, faulting the Treasury Department on a variety of things, including its approach to the foreclosure crisis.
Last week, Barofsky, the special inspector general, also announced plans to ask for a detailed accounting of how the money is being spent by banks and other financial institutions.
By Derek Kravitz |
January 28, 2009; 12:35 PM ET
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