Treasury Lacks Oversight Of Bailout Billions

by Chris Sturr | March 10, 2009

Congressional investigators have discovered that some of the largest banks receiving U.S. taxpayer bailout funds have been lending billions of dollars overseas.

Among the findings, Citigroup (recipient of $45 billion in bailout funds) lent $8 billion to investors in Dubai, and Bank of America (which got another $45 billion) lent $7 billion for a project in China.

The investigators found that the Treasury had few controls for tracking the bailout money for the 20 largest banks, and no controls at all for the other 297 smaller banks.

According to the Washington Post:

The report also raises questions about Goldman Sachs’s $2 billion repurchase of its own stock in December, which caused the share value to increase almost 20 percent. That would have been a significant financial benefit for senior executives, who usually own large amounts of company stock. Congressional investigators are looking at whether the deal was an inappropriate way to enrich those top employees despite a public clamor for strict limits on executive compensation.

Spokesmen for the banks either declined to comment or did not respond to e-mail and telephone messages yesterday.

“Treasury has not safeguarded taxpayers’ money, yet Treasury is prepared to keep investing in a failed economic strategy when they don’t even know what happened to the money they gave in the first place,” Kucinich said. “This is a textbook definition of a taxpayer’s nightmare.”

Full story here.

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