Who's Minding the Bailout?

Want to hear crickets chirping? Ask Washington who's keeping an eye on its $700 billion economic bailout.

Lawmakers and the Bush administration frantically hammered out a gargantuan package to save the nation's economy earlier this fall. But their efforts to recruit watchdogs for their creation have lacked the same urgency.

Take the White House: it was supposed to name a special inspector general to eyeball the bailout, according to the emergency legislation President Bush signed into law Oct. 3. To date, though, no one has been named.

Bush spokesman Tony Fratto said he "would expect" the president to pick someone before he leaves office next January. But, he said, "I can't give you a sense on timing of any personnel decisions."

Since last month, the bailout effort has churned out over $170 billion to dozens of banks, signed contracts with voided conflict-of-interest clauses – and generally operated with many of the normal rules of government hiring and spending largely sidelined.

That doesn't appear to be causing concern among those who pushed the bailout through Congress with sky-is-falling urgency.

Party leaders on Capitol Hill were supposed to name a special oversight commission to check how the bailout was using its legal authorities, according to the law. But over a month has passed without a single name put forward.

"There have been some beginnings of internal discussions," a spokesman for House Minority Leader John Boehner, R-Ohio, said late last week. "Still working on names," said a spokesman for Senate Majority Leader Harry Reid, D-Nev.

"No," said a spokeswoman for House Majority Leader Steny Hoyer, D-Md., when asked if her office had been talking with others about the panel. Senate Minority Leader Mitch McConnell, R-Ky., did not respond to requests for comment.

They might want to pick up the pace: the panel has its first report due Jan. 20, 2009, according to their legislation.

To make matters worse, Treasury is one of the few agencies in Washington for which there is no private, non-partisan watchdog group. Meanwhile, the biggest watchdog in town – Congress' Government Accountability Office (GAO) – placed large "Help Wanted" ads in the Washington Post and New York Times, indicating it may lack the manpower to properly scrutinize the crush of bailout activity.

Experts outside government are alarmed. "This poses every potential problem that Iraq has: corruption, conflicts of interest, theft, and waste of government resources," financial policy expert and investment firm partner Robert Dugger recently told Government Executive magazine. "It's Blackwater, Halliburton, and KBR, but right here at home."

"The thinking was, 'this should be built for speed, not accountability,'" said Paul Light, a professor of politics and government at New York University. "The coming months will show that was a mistake."

A review of contracts issued by the Treasury's new Office of Financial Stability finds it has blacked out key information– total spending figures, names of key personnel, experts' hourly rates.

In at least one instance, a company attempted to assert its own conflict-of-interest rules, only to be shot down by the Treasury Department.

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