Who's Minding the Bailout?

"The Government takes exception" to the ethics rules laid out by accounting firm Ernst & Young, reads Treasury's contract with the company. "Treasury may waive potential or other identified conflicts of interest" and force the company to do the work anyway, it asserted. "Failure to proceed. . . under these circumstances may be cause to terminate" the contract, Treasury wrote.

In the copy of the contract released to the public, Treasury redacted the total value of that deal – a "blanket" agreement for up to three years' work – as well as the names and titles of Ernst & Young key personnel who would be working on the project.

To be fair, some oversight is said to be taking place. Until the White House names a special inspector general for the bailout, Treasury Secretary Henry Paulson asked his agency's inspector general to lend a hand. That office confirmed the arrangement, but declined to provide details of its efforts.

GAO auditors, directed by the law to file reports on the bailout every 60 days, have already rolled up their sleeves. The congressional watchdogging office has assigned as many as 30 people to work at least part-time on scrutinizing the bailout, according to Tom McCool, director of GAO's Center for Economics – although, he said, the exact number is "a little hard to pin down."

McCool said GAO has met three times so far with Treasury's top bailout officials. "I think we're managing to do what we need to do," said McCool, although he confirmed the office was looking to hire at least five new full-time experts to work on bailout issues.

Treasury spokeswoman Jennifer Zuccarelli declined to answer whether the situation gave American taxpayers cause for concern. Instead, she pointed to the "almost daily" conversations between Treasury officials and GAO; the hiring of a chief compliance officer, Don Hammond; and the meetings of the bailout's own "Oversight Board."

That board includes the top officials responsible for the bailout itself. It has met three times over the past month. Minutes posted online suggest the group has averaged roughly one minute of meeting time for every billion dollars released by the bailout effort.

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