More Oversight of Bailout Badly Needed

Common Cause on Wednesday called on members of the House of Representatives to pass legislation that would appoint a special inspector general to oversee the Troubled Asset Relief Program (TARP), also known as the economic bailout. The letter highlighted the failure of the government to monitor how federal money is being used under the $700 billion program.

"More needs to be done to make sure these tax dollars are helping families stay in their homes, as the original legislation intended," said Common Cause President Bob Edgar. "The Treasury Department has failed to adequately monitor how government money is being used."

The letter cites recent reports that portray the Treasury Department's administration of the massive bailout program as lacking proper controls and oversight. According to the letter, one report issued by the Government Accountability Office states:

Treasury has yet to address a number of critical issues, including determining how it will ensure that [the plan] is achieving its intended goals and monitoring compliance with limitations on executive compensation and dividend payments. Moreover, further actions are needed to formalize transition planning efforts and establish an effective management structure and an essential system of internal control.

The Special Inspector General for the Troubled Asset Relief Program Act of 2008 is sponsored by Sen. Clair McCaskill (D-MI) and has already passed the Senate by unanimous consent.

"The financial services industry successfully avoided government oversight in the lead-up to this crash, thanks to their lobbying and campaign contributions," said Edgar. "It appears that these companies are still enjoying limited government intervention even as they rely on federal tax dollars to remain solvent."