Archive for the ‘oversight’ Category

Bailout Lacks Oversight Despite Billions Pledged

November 13, 2008

In the six weeks since lawmakers approved the Treasury’s massive bailout of financial firms, the government has poured money into the country’s largest banks, recruited smaller banks into the program and repeatedly widened its scope to cover yet other types of businesses, from insurers to consumer lenders.

By Amit R. Paley
The Washington Post
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Along the way, the Bush administration has committed $290 billion of the $700 billion rescue package.

Yet for all this activity, no formal action has been taken to fill the independent oversight posts established by Congress when it approved the bailout to prevent corruption and government waste. Nor has the first monitoring report required by lawmakers been completed, though the initial deadline has passed.

“It’s a mess,” said Eric M. Thorson, the Treasury Department‘s inspector general, who has been working to oversee the bailout program until the newly created position of special inspector general is filled. “I don’t think anyone understands right now how we’re going to do proper oversight of this thing.”

In approving the rescue package, lawmakers trumpeted provisions in the legislation that established layers of independent scrutiny, including a special inspector general to be nominated by the White House and a congressional oversight panel to be named by lawmakers themselves.

U.S. Treasury Secretary Henry Paulson speaks during a news conference ...
U.S. Treasury Secretary Henry Paulson speaks during a news conference at the Treasury Building in Washington November 12, 2008. Paulson on Wednesday said he was backing away from buying troubled mortgage assets using a $700 billion bailout fund, instead favoring a second round of capital injections into financial institutions that would match private funds.(Mitch Dumke/Reuters)

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http://www.washingtonpost.com/w
p-dyn/content/article/2008/11/
12/AR2008111202846.html?hpid=topnews

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Mortgage firm arranged stealth campaign to avoid tighter government oversight

October 20, 2008

Freddie Mac secretly paid a Republican consulting firm $2 million to kill legislation that would have regulated and trimmed the mortgage finance giant and its sister company, Fannie Mae, three years before the government took control to prevent their collapse.

In the cross hairs of the campaign carried out by DCI of Washington were Republican senators and a regulatory overhaul bill sponsored by Sen. Chuck Hagel, R-Neb. DCI’s chief executive is Doug Goodyear, whom John McCain’s campaign later hired to manage the GOP convention in September.

Freddie Mac’s payments to DCI began shortly after the Senate Banking, Housing and Urban Affairs Committee sent Hagel’s bill to the then GOP-run Senate on July 28, 2005. All GOP members of the committee supported it; all Democrats opposed it.

In the midst of DCI’s yearlong effort, Hagel and 25 other Republican senators pleaded unsuccessfully with Senate Majority Leader Bill Frist, R-Tenn., to allow a vote.

“If effective regulatory reform legislation … is not enacted this year, American taxpayers will continue to be exposed to the enormous risk that Fannie Mae and Freddie Mac pose to the housing market, the overall financial system and the economy as a whole,” the senators wrote in a letter that proved prescient.
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http://news.yahoo.com/s/ap/20081020/
ap_on_bi_ge/the_influence_game_
housing;_ylt=AvK3BUDakqOgbxPm3r49QB2s0NUE

Wall Street, Congressional Smart Guys Pretty Stupid

October 12, 2008

“If these guys are our best and brightest, then it is about time we rethink what constitutes wisdom….”

By Victor Davis Hanson
The Washington Times
October 12, 2008

Until the last few weeks, the financial panic was still mostly far away on Wall Street. But not now.

Car loans, mortgages and college financing are suddenly harder to come by. Millions are stuck in houses not worth what is owed on them. Cash-strapped consumers are cutting back. The economy slows. Jobs disappear. Who wants to open quarterly 401(k) statements only to learn everything they put away in retirement accounts the last two or three years is gone?

House Financial Services Committee Chairman, Rep. Barney Frank, ...
House Financial Services Committee Chairman, Rep. Barney Frank, D-Mass., talks with reporters after meeting with fellow Democrats about the financial bailout package Thursday, Oct. 2, 2008 in Washington.(AP Photo/Evan Vucci)

There is plenty of blame to go around. Greedy Wall Street speculators took mega-bonuses even when they knew their leveraged companies were tottering – and someone else would pick up the tab. Crooked or stupid politicians allowed Fannie Mae and Freddie Mac to squander billions, as they raked in campaign donations and crowed about their politically correct support for millions of shaky – and now mostly defaulting – buyers.

The new national gospel became charge now/pay later and speculate, rather than put something away in case of a downturn. To provide more goodies we hadn’t earned, politicians ignored soaring annual budget deficits and staggering national debt and kept spending.

But amid the gloom, there are some valuable….

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http://www.washingtontimes.com/news/2008/oct
/12/correction-wall-street-101/

Treasury’s Paulson unveils financial plan

March 31, 2008
By MARTIN CRUTSINGER, AP Economics Writer

WASHINGTON – The Bush administration is proposing the most sweeping overhaul of the financial regulatory system since the Great Depression.

The plan would change how the government regulates thousands of businesses from the nation’s biggest banks and investment houses down to the local insurance agent and mortgage broker.

Treasury Secretary Henry Paulson unveiled the 218-page plan in a speech in Treasury’s ornate Cash Room. He declared that a strong financial system was important not just for Wall Street but also for working Americans.

The administration’s plan was already drawing criticism from Democrats that it does not go far enough….

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http://news.yahoo.com/s/ap/20080331/ap_on_go_ca_st_pe/fed_overhaul;_
ylt=AkgOZSBc1zePyHV7bypb6tus0NUE

Bush administration proposes sweeping overhaul of financial industry

March 29, 2008

WASHINGTON (AP) – The Bush administration is proposing a sweeping overhaul of the way the nation’s financial industry is regulated.
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In an effort to deal with the problems highlighted by the current severe credit crisis, the new plan would give major new powers to the Federal Reserve, according to a 22-page executive summary obtained last night by The Associated Press.
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The proposal would designate the Fed as the primary regulator of market stability, greatly expanding the central bank’s ability to examine not just commercial banks but all segments of the financial services industry.
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The administration proposal, which is to be formally unveiled in a speech Monday by Treasury Secretary Henry Paulson, also proposes consolidating the current scheme of bank regulation.

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http://www.washingtontimes.com/apps/pbcs.dll/article?AID=/20080329/BUSINESS/847722253/1001