Feds forgot tiedowns for TARP billions

When Congress and the Bush administration collaborated on passage of a $700 billion economic bailout package in October, they sought to ease voters' fears by pledging to attach all manner of strings, twine and rope to the money. But, according to a new report, much of the program remains completely untethered two months later.

While acknowledging the complexity of administering a program of this magnitude in an ever-changing economic landscape, the Government Accountability Office - the nonpartisan investigative arm of Congress - found numerous shortcomings in efforts to ensure the bailout initiative's "integrity, accountability and transparency."

Among other things, GAO auditors said the Treasury Department has failed to establish sufficient safeguards to make sure financial institutions are using the emergency funds as intended; to set benchmarks to gauge whether the program's objectives are being met; and to implement adequate oversight of executive salaries and potential conflicts of interest.

Unless the program is monitored more closely, the auditors said, there is "heightened risk" that the interests of the government and the taxpayers won't be protected.

Meanwhile, Elizabeth Warren - a Harvard law school professor appointed to lead a congressional panel to oversee the bailout - is expressing concerns that the government still doesn't have a coherent strategy for use of the money, even though roughly $150 billion has already been distributed.

Warren, whose panel recently met for the first time, told The New York Times that lawmakers moved so quickly in October to try to ease the economic crisis that they didn't have time "even to develop a coherent list of questions to ask Treasury about what it's doing and what it plans to do - and whether either of those [is] likely to address what's going wrong."

The process of catching up must be accelerated on several fronts.

Warren's panel was set up to monitor policy development and to recommend financial regulatory reforms, while the GAO and a special inspector general - still awaiting confirmation by the Senate - are charged with tracking expenditures from the bailout fund.

Democratic lawmakers and the incoming Obama administration are working on a plan that could send hundreds of billions of dollars to states to address transportation needs and other long-neglected public works projects.

Before deciding whether to pass a new stimulus package, however, Congress needs to ensure it's tied together the promised details on monitoring the use of the $700 billion already committed to economic recovery efforts.