FEBRUARY 10, 2010
Adding insult to injury, the U.S. government has paid private firms nearly $160 million to distribute funds from its severely mismanaged and fraud-infested program to bail out the nation’s financial institutions.
Rife with waste and abuse the $700 billion Troubled Asset Relief Program (TARP) has already proven to be a troubling experiment of U.S. tax dollars with virtually no oversight. In fact, dozens of criminal investigations have been launched into the controversial bailout and the risk is only going to grow, according to a Treasury Department Inspector General report issued last spring.
So far investigations have centered on securities fraud, tax law violations, mortgage modification fraud and insider trading involving recipients of the federal money. Administered through the Treasury Department, TARP buys failing assets from financial institutions to supposedly ease the credit crunch by allowing banks to clear the balance sheets and lend money. It also allows the government to insure, instead of purchase, banks’ troubled assets.
On top of its well-documented troubles and multiple incidents of waste, the Treasury Department has paid private companies and legal firms at least $159 million to dole out TARP funds, according to a report published this week by an investigative journalism group.
Here is the best part; the government doesn’t want the public to know details of the arrangements, including the labor rates and how the private companies were selected to do the government work. In fact, the Treasury Department has suspiciously redacted the information from the contracts that have been posted online to meet the Obama Administration’s “unprecedented transparency” measures.
A known fact however, is that the government has hired some of the nation’s most prominent—and no doubt politically connected—law firms to distribute TARP money and a great deal of them charge an exorbitant $1,000 an hour.
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