Bachmann Committee Statement on Oversight Failures in Implementation of Bailout
Washington, D.C.,
Dec 10 -
Today, U.S. Representative Michele Bachmann (MN-6), a member of the House Financial Services Committee, made the following statement for a Financial Services Committee Hearing regarding Oversight Concerns Regarding Treasury Department Conduct of the Troubled Assets Relief Program:
I’m extremely concerned about the findings published in the Government Accountability Office (GAO) report issued this month regarding federal oversight of the Troubled Asset Relief Program (TARP). The report’s title says it all: Additional Actions Needed to Better Ensure Integrity, Accountability, and Transparency:
"Simply put, the nonpartisan, independent GAO clearly details a litany of shortcomings related to Treasury’s oversight of TARP. It lists nine specific areas that require more attention by Treasury and numerous recommendations for improved implementation of the program.
"For example, it states that Treasury does not have an adequate mechanism in place to ensure institutions that have received taxpayer dollars comply with "limitations on executive compensation, dividend payments, and the repurchase of stock."
"It points out Treasury’s serious communication flaws with Congress and the public – the ones footing the bill for the bailout -- during the TARP’s implementation, including, quite notably, the sudden decision to make capital injections into banks rather than to purchase "troublesome" assets. GAO correctly refers to this as "information gaps and surprises." This lack of communication is more than just irksome; it has led to real market instability.
"The GAO report questions Treasury’s ability to mitigate possible conflicts of interest held by decision-makers contracted to execute TARP. GAO states that "few details" have been submitted "on how the companies would notify and communicate with Treasury if conflicts were identified during the course of performance." This is a serious matter and one which should have been planned for before the TARP was executed to protect taxpayers.
"Perhaps most importantly, the report describes strong concerns with how Treasury will monitor the use of TARP funds through the Capital Purchase Program (CPP) and ensure that the CPP accomplishes its goals. Currently, according to the GAO, Treasury cannot measure "whether financial institutions’ activities are generally consistent with the purposes of CPP and help ensure an appropriate level of accountability and transparency." That, Mr. Chairman, is indeed a serious concern and one that the taxpayers demand be addressed immediately.
"Unfortunately, Treasury has already spent about half of the TARP funds without any of these matters being addressed. And, I believe that whether or not Treasury satisfies the GAO’s concerns or implements its recommendations during expenditure of the remaining $350 billion, the TARP remains an objectionable use of tax dollars and holds little promise of success. However, so long as this program is in place, Treasury must be held accountable for its oversight."
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