Monday, July 20, 2009
Treasury: We Can't Tell You Where Bailout Money Went, Because "Money Given to a Bank is Like Water Poured into an Ocean"
A soon-to-be released report by special inspector general Neil Barofsky finds:
Many of the banks that got federal aid to support increased lending have instead used some of the money to make investments, repay debts or buy other banks
It is not clear whether the report will also disclose the banks' use of the bailout money to pay executives fat bonuses which they used to buy gold toilets and prostitutes, and to lobby Congress to stop any meaningful reform.
The report by the special inspector general also calls on the Treasury Department to require regular, more detailed information from banks about their use of federal aid provided under the Troubled Asset Relief Program.
According to the Post, the Treasury has refused to collect such information, and:
In a written response, the Treasury again rejected that call. Officials have taken the view that the exact use of the federal aid cannot be tracked because money given to a bank is like water poured into an ocean.But just like dye is frequently added to streams by scientists in order to trace the flow of water, Treasury could easily track the flow of bailout funds. Indeed, the government has very sophisticated software which tracks funds, which it uses in terrorism investigations.
But that is all moot. The truth of the matter is that Treasury never even asked the banks to keep track of where the bailout money was going. If they ask, the banks would be required to keep track themselves.