Congress Plans to Find Out Where $350 Billion in Bailout Money Went, Dems Say

February 3, 2009 - 9:56 PM
Given questions about how the first $350 billion in Troubled Asset Relief Program (TARP) funds was spent last fall, House Democratic leaders said they are pressing for greater accountability.

House Financial Services Committee Chairman Rep. Barney Frank, D-Mass. gestures during a news conference on Capitol Hill in Washington, Tuesday, Feb. 3, 2009. (AP Photo/Susan Walsh)

(CNSNews.com) - Given questions about how the first $350 billion in Troubled Asset Relief Program (TARP) funds was specifically spent last fall – and how the second $350 billion payout will be accounted for now – Democratic leaders in the House indicated that the tracking of the money was not as clear and transparent as needed and said they have pressed for greater accountability.
 
Since Congress passed TARP last year, many banks that received cash infusions from the Treasury Department’s first $350 billion installment have declined to tell Congress or the American people exactly how they spent the funds.
 
“I think we were not as specific in terms of reporting on the first $350 billion as we should have been, and I think we are going to be much more on the second,” House Majority Leader Steny Hoyer (D-Md.) told CNSNews.com when asked if he or any of the Democratic leaders could account for the money in detail.
 
“I think we ought to have more accountability and more transparency,” said Hoyer. “The public needs to know where every nickel of these funds is going and certainly that’s going to be the effort of the Obama administration with the second $350 billion.”
 
House Financial Services Committee Chairman Barney Frank (D-Mass.) did not say whether he knew specifically where all of the first $350 billion had gone but said he is working with administration officials to ensure that the disbursement is accounted for and that the second disbursement is more transparent.
 
“The inspector general is demanding that precisely,” Frank told CNSNews.com. “He is demanding that every recipient of funds account fully for how they were spent. The answer to your question is that [Neil] Barofsky is in the process of demanding that and we are running interference to make sure he can get it done.”
 
Neil M. Barofsky was confirmed by the Senate on Dec. 8 to be the special inspector general for the TARP.
 
Hoyer also mentioned legislation that passed in the House on Jan. 21 that requires more accountability for the TARP funds and, among other things, would require demands companies that receive TARP funds to produce a quarterly report on how the money is used.
 
“As you know, we passed a reform package which I would hope the Senate would pass as well,” said Hoyer.
 
The TARP Reform and Accountability Act, which was sponsored by Frank, passed the House 260 to 166 but has not yet been taken up the Senate.