Panel questions oversight of bailout

WASHINGTON -- The federal official policing how the $700 billion financial rescue package is spent told Congress on Wednesday that he is investigating whether political pressure affected the distribution of the money.

Neil Barofsky, the rescue package watchdog, said he will report his findings on "what impact, if any, that lobbyists or other outside influences have had" on the Treasury Department's spending of the money.

Barofsky, the special inspector general for the Troubled Asset Relief Program (TARP), told a House oversight subcommittee he was working to aggressively identify and prevent fraud and waste in the massive program.

Barofsky's message for recipients: "If you try and steal from this program, we will find you. We will investigate you. We will put you in jail."

Rep. Dennis Kucinich, D-Ohio, the panel's chairman, said after the hearing he's glad Barofsky is looking at the possibility of lobbyist influence over the spending.

"The problem with TARP from the beginning is that it puts the government in the position of picking winners and losers," Kucinich said. "Certainly, the possibility of outside influence, namely lobbyists, is always present. This is Washington, D.C., not Disneyland."

Nearly 500 banks have gotten government investments from the program, which also has provided tens of billions of taxpayer dollars to prop up insurer American International Group and automakers General Motors and Chrysler.

Outside pressure had no role in decisions to distribute the $325 billion from the program that has been spent so far, said Neel Kashkari, the Treasury Department official coordinating the rescue.

After he took office in January, Treasury Secretary Timothy Geithner announced he would restrict lobbyists' ability to contact the department about applications for or spending of rescue funds.

Kashkari said the department has heard from officials, such as members of Congress and governors, about the rescue plan but decisions on doling out the money were made based only on economics, not politics.