Treasury Blacks Out Key Parts of Private Bailout Contracts

[ThoughtCriminal]

Original Article

Remember how Treasury Secretary Henry Paulson promised full transparency in spending the $700 billion bailout money? And remember how bailout opponents predicted that the failure to mandate such transparency would allow all sorts of Halliburton-style shenanigans? From the looks of the first private contracts issued by the Treasury Department, it looks like the bailout opponents were correct.

As flagged by BailoutSleuth.com, Paulson is blacking out the sections of government contracts that spell out how much private firms will be paid for their services in administering taxpayer money. Here's a page from the compensation part of a contract with Bank of New York, which has been hired to do some of the bookkeeping (because, of course, the Bush administration is happy to privatize that function):



And here's a page from the compensation part of a Treasury contract with law firm Simpson Thatcher Bartlett - a firm being hired to provide "legal advice" to the government:



Think these are doctored images? Check them out yourself on Treasury's website - the first contract is here (blacked out section on page 25 of the PDF) and the second contract is here (blacked out section on page 5 of the PDF).

So, just to review - within just a few weeks of the bailout passing, our government is blacking out the parts of public contracts that explain how much taxpayer cash private contractors are going to be paid. Perhaps this is what Paulson meant when he promised transparency - by posting these blacked out contracts on the Treasury website, the government is being transparent about exactly where it is being secretive. But I don't think that definition of transparency really flies, do you?

Of course, I wish I was surprised about this - but one of the major reasons I was opposed to this bailout from the beginning was because (as I and others repeatedly wrote) there is no real transparency at all. Now we know what "no transparency at all" really means.

[adymond]

The only thing I will say is that these could be the documents for public consumption, but the version that government gets is not blacked out.

[rev214]

its okay...the banks don't even know where some of their bailout is...

WASHINGTON — It's something any bank would demand to know before handing out a loan: Where's the money going?

But after receiving billions in aid from U.S. taxpayers, the nation's largest banks say they either can't track exactly how they're spending the money or they simply refuse to discuss it.

"We've lent some of it. We've not lent some of it. We've not given any accounting of, 'Here's how we're doing it,"' said Thomas Kelly, a spokesman for JPMorgan Chase, which received $25 billion in emergency bailout money. "We have not disclosed that to the public. We're declining to."

The Associated Press contacted 21 banks that received at least $1 billion in government money and asked four questions: How much has been spent? What was it spent on? How much is being held in savings, and what's the plan for the rest?

None of the banks provided specific answers.

"We're not providing dollar-in, dollar-out tracking," said Barry Koling, a spokesman for Atlanta, Georgia-based SunTrust Banks Inc., which got $3.5 billion in taxpayer dollars.

Some banks said they simply didn't know where the money was going.

"We manage our capital in its aggregate," said Regions Financial Corp. spokesman Tim Deighton, who said the Birmingham, Alabama-based company is not tracking how it is spending the $3.5 billion it received as part of the financial bailout.

The answers highlight the secrecy surrounding the Troubled Assets Relief Program, which earmarked $700 billion — about the size of the Netherlands' economy — to help rescue the financial industry. The Treasury Department has been using the money to buy stock in U.S. banks, hoping that the sudden inflow of cash will get banks to start lending money.

The entire AP article is here.

[dc dalton]

Your money, their prerogative ... just more of the 'fleecing of America' if you ask me

[Dredly]

3760 hours of legal assistance?

thats 94 40 hour work weeks...

[chrisaka]

The only thing I will say is that these could be the documents for public consumption, but the version that government gets is not blacked out.

That's the point... there is no transparency here for the public. It's exactly like paying Halliburton $20k for a toothbrush.

3760 hours of legal assistance?

thats 94 40 hour work weeks...

http://www.stblaw.com/lawyerSearch.cfm

Do a blank search, look how many employees and partners they have. Doesn't take long to spend 4k hours at a law firm of that size. That the US government is doing it is a little ridiculous, though.

[dc dalton]

That's the point... there is no transparency here for the public. It's exactly like paying Halliburton $20k for a toothbrush.

Come on now! Does this REALLY surprise you? This is how our government has been working for quite some time now. They take our money and dole it out to their 'buddies' and tell us it's needed, then when we question them they hide the details.

If the American public ever got the entire truth laid out in front of them their heads would explode!

[chrisaka]

Come on now! Does this REALLY surprise you? This is how our government has been working for quite some time now. They take our money and dole it out to their 'buddies' and tell us it's needed, then when we question them they hide the details.

If the American public ever got the entire truth laid out in front of them their heads would explode!

Yeah, seriously! Doesn't mean that it isn't infuriating to those with heads less likely to explode, though!

[adymond]

Yeah, seriously! Doesn't mean that it isn't infuriating to those with heads less likely to explode, though!

Or those who's heads are just firmly held together with duckt tape and some epoxy. My comment was just that some documents are not going to be fully transparent to the public. I am not thrilled about it, but it is a reality. In this instance I think EVERY penny should be accounted for and we should be able to see it on a public web page. The problem is it will never happen. We (our governmental representation) voted to allow Paulison to spend the money with no oversight and no transperancy.