The Wall Street Journal has been reporting about the lobbying of the U.S. Treasury for TARP funds to be sent to certain banks. Their article focuses primarily on politicians, but there has been an onslaught of lobbyists also working to help certain banks. The push by the new Obama administration to be more transparent will hopefully make the process cleaner from both lobbyists and politicians.
From Tuesday's New York Times - The new Treasury secretary, Timothy F. Geithner, announced on Tuesday that he would crack down on lobbying to influence the $700 billion financial bailout program by companies that are receiving billions in taxpayer money.
Mr. Geithner, who was confirmed on Monday, also said he would set new limits intended to prevent political interference with decisions about which companies received bailout money.
Among other steps, the Treasury department said it would make public a log of all contacts by public officials and bank officials regarding specific financial institutions.
The log will be posted on the department’s Web site and updated weekly, it said.
The announcement followed several recent news reports about attempts by corporate lobbyists and members of Congress to influence the bailout program, including decisions about which banks should receive taxpayer funds.
"American taxpayers deserve to know that their money is spent in the most effective way to stabilize the financial system," Mr. Geithner said in a statement. "Today’s actions reaffirm our commitment toward that goal."
The details of the new rules, whose text has not been completed, were not released. But in a press release, the Treasury Department outlined the Obama administration’s intent to restrict corporate and political lobbying to influence the bailout program.
Among the changes will be rules to "combat lobbyist influence" over the bailout program, including by "restricting contacts with lobbyists in connection with applications for, or disbursements of" bailout funds, the department said.
A Treasury spokeswoman said the department’s lawyers were developing rules to adopt such a restriction to the extent allowed by law and would make the procedures public. The changes will not require legislation by Congress or regulations, she said.
Eugene Volokh, a constitutional law professor at the University of California, Los Angeles, said there was no legal impediment to barring Treasury officials from talking about specific matters with lobbyists, although the First Amendment would not permit the government to forbid people from trying to lobby it.
The New York Times reported on Jan. 24 that at least a dozen companies that received taxpayer funds from the bailout program lobbied the government about the program in the final months of 2008, according to their lobbying disclosure forms.
The new rules will also "ensure that political influence does not interfere" with bailout "decision making, using as a model for these protections the limits on political influence over tax matters," the Treasury said.
The tax investigation safeguards include rules to keep executive branch officials, including those at the White House, from ordering the Internal Revenue Service to conduct or terminate an audit of a particular taxpayer. If copied for the bailout program, the rule would prevent such officials from intervening in particular decisions about which banks get which funds.
The Treasury spokeswoman also said the department would disclose communications with members of Congress, along with bank executives, as part of its plan to make public all contacts about the bailout program.
The Wall Street Journal reported on Jan. 22 that several members of Congress, including lawmakers from Ohio and Alabama, had tried to ensure that regulators would steer bailout funds to banks in their states.
The article focused in particular on efforts by the chairman of the House Financial Services Committee, Barney Frank of Massachusetts, to help a troubled minority-owned bank in Boston. It later received $12 million in bailout money.
In a phone interview, Mr. Frank said he had no problem with Treasury posting a log of communications with members of Congress. He said he had been very public about his support for the Boston bank, and said lawmakers wanted their constituents to know of such efforts.
The Treasury said letters and calls from Congress played no role in its decisions about which banks received money. Mr. Geithner also declared that the Office of Financial Stability at Treasury, in making reports to Congress about how it was disbursing the bailout funds, would certify that each decision was based only on "investment criteria and the facts of the case."
The department said it would soon publish a detailed description of its investment review process. And it said that only banks recommended by their primary bank regulator would be eligible for bailout funds.
The announcement on Tuesday represented the latest step by the Obama administration to make the bailout program more open and accountable as it moved to disburse the second $350 billion, following criticism of the Bush administration’s handling of the first $350 billion of the program.
Another set of rules on lobbyists imposed by President Obama will affect Mr. Geithner’s chief of staff, Mark Patterson, who lobbied for Goldman Sachs as recently as last April. Under the new rules, Mr. Patterson cannot be involved in dealing with any issues involving Goldman or with other issues on which he lobbied.
The Obama administration has already said it will step up monitoring of lending patterns by financial institutions that have received bailout money. It also said it would seek to limit executive pay at banks that received taxpayer help in the future.
During his confirmation hearings, Mr. Geithner said the bailout needed "serious reform" and pledged that the administration would impose "tough conditions" to protect taxpayers.
Sources: The New York Times, The Wall Street Journal
From Tuesday's New York Times - The new Treasury secretary, Timothy F. Geithner, announced on Tuesday that he would crack down on lobbying to influence the $700 billion financial bailout program by companies that are receiving billions in taxpayer money.
Mr. Geithner, who was confirmed on Monday, also said he would set new limits intended to prevent political interference with decisions about which companies received bailout money.
Among other steps, the Treasury department said it would make public a log of all contacts by public officials and bank officials regarding specific financial institutions.
The log will be posted on the department’s Web site and updated weekly, it said.
The announcement followed several recent news reports about attempts by corporate lobbyists and members of Congress to influence the bailout program, including decisions about which banks should receive taxpayer funds.
"American taxpayers deserve to know that their money is spent in the most effective way to stabilize the financial system," Mr. Geithner said in a statement. "Today’s actions reaffirm our commitment toward that goal."
The details of the new rules, whose text has not been completed, were not released. But in a press release, the Treasury Department outlined the Obama administration’s intent to restrict corporate and political lobbying to influence the bailout program.
Among the changes will be rules to "combat lobbyist influence" over the bailout program, including by "restricting contacts with lobbyists in connection with applications for, or disbursements of" bailout funds, the department said.
A Treasury spokeswoman said the department’s lawyers were developing rules to adopt such a restriction to the extent allowed by law and would make the procedures public. The changes will not require legislation by Congress or regulations, she said.
Eugene Volokh, a constitutional law professor at the University of California, Los Angeles, said there was no legal impediment to barring Treasury officials from talking about specific matters with lobbyists, although the First Amendment would not permit the government to forbid people from trying to lobby it.
The New York Times reported on Jan. 24 that at least a dozen companies that received taxpayer funds from the bailout program lobbied the government about the program in the final months of 2008, according to their lobbying disclosure forms.
The new rules will also "ensure that political influence does not interfere" with bailout "decision making, using as a model for these protections the limits on political influence over tax matters," the Treasury said.
The tax investigation safeguards include rules to keep executive branch officials, including those at the White House, from ordering the Internal Revenue Service to conduct or terminate an audit of a particular taxpayer. If copied for the bailout program, the rule would prevent such officials from intervening in particular decisions about which banks get which funds.
The Treasury spokeswoman also said the department would disclose communications with members of Congress, along with bank executives, as part of its plan to make public all contacts about the bailout program.
The Wall Street Journal reported on Jan. 22 that several members of Congress, including lawmakers from Ohio and Alabama, had tried to ensure that regulators would steer bailout funds to banks in their states.
The article focused in particular on efforts by the chairman of the House Financial Services Committee, Barney Frank of Massachusetts, to help a troubled minority-owned bank in Boston. It later received $12 million in bailout money.
In a phone interview, Mr. Frank said he had no problem with Treasury posting a log of communications with members of Congress. He said he had been very public about his support for the Boston bank, and said lawmakers wanted their constituents to know of such efforts.
The Treasury said letters and calls from Congress played no role in its decisions about which banks received money. Mr. Geithner also declared that the Office of Financial Stability at Treasury, in making reports to Congress about how it was disbursing the bailout funds, would certify that each decision was based only on "investment criteria and the facts of the case."
The department said it would soon publish a detailed description of its investment review process. And it said that only banks recommended by their primary bank regulator would be eligible for bailout funds.
The announcement on Tuesday represented the latest step by the Obama administration to make the bailout program more open and accountable as it moved to disburse the second $350 billion, following criticism of the Bush administration’s handling of the first $350 billion of the program.
Another set of rules on lobbyists imposed by President Obama will affect Mr. Geithner’s chief of staff, Mark Patterson, who lobbied for Goldman Sachs as recently as last April. Under the new rules, Mr. Patterson cannot be involved in dealing with any issues involving Goldman or with other issues on which he lobbied.
The Obama administration has already said it will step up monitoring of lending patterns by financial institutions that have received bailout money. It also said it would seek to limit executive pay at banks that received taxpayer help in the future.
During his confirmation hearings, Mr. Geithner said the bailout needed "serious reform" and pledged that the administration would impose "tough conditions" to protect taxpayers.
Sources: The New York Times, The Wall Street Journal
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