Last week the government dispatched more of your money into the abyss. Through its "Term Auction Facility," the Federal Reserve lent banks $63 billion - nearly half the cost of the entire savings and loan bailout from the 1980s, or what it takes to fight in Iraq for six months.
Who got the money? At what rates? What collateral did they put up? How will the proceeds be spent?
The Fed isn't saying, and it's fighting attempts to shed light. The Treasury Department, distributing its own bailout billions, is almost as clammed up.
Never has the country spent so much taxpayer money, so quickly, with so little disclosure. The bailout blackout threatens to match the information failure over mortgages and derivatives that caused this mess in the first place.
Obscurity and lack of accountability have followed the rescue from its start.
The Bush administration's initial proposal, in late September, required only semiannual reports to Congress and made a stunning attempt to exempt bailout actions from review "by any court of law or any administrative agency."
The final result isn't much better. Two weeks ago the Government Accountability Office found that Treasury hadn't yet issued final rules on conflicts of interest, hadn't set up communication lines with Congress, hadn't established a corporate reporting process, and hadn't fully ensured that taxpayer dough isn't financing executive pay and shareholder dividends.
More than $300 billion has already gone out the door.
There is "a heightened risk that the interests of the government and taxpayers may not be fully protected," the GAO said, with typical understatement.
The Treasury fund, the "Troubled Asset Relief Program," was supposed to be spent on soured mortgage bonds. It wasn't. Instead, a throwaway sentence in the TARP bill authorized Treasury Secretary Henry Paulson to throw money at "any other financial instrument" he deemed necessary. So the money is buying bank preferred stock, automobile-maker loans and whatnot.
The Associated Press asked 21 banking companies, each receiving at least $1 billion, what became of the money. Not one would say.
Treasury's program is floodlit transparency compared with the Federal Reserve's. Not needing Congress' approval, Fed Chairman Ben Bernanke gave himself what Paulson originally wanted: nearly unlimited authority to launch public funds into the economy.
