Bailout Watch 361: No, You Can't Spend TARP On Lobbying
Newly-confirmed Treasury Secretary Timothy Geithner highlights “President Barack Obama’s firm commitment to transparency, accountability and oversight in our government’s approach to stabilizing the financial system,” in his announcement today of reforms to the Emergency Economic Stabilization Act (EESA). Details on the reforms are sketchy at the moment, as the new President’s commitment to vague details remains firmly in place. Read the Treasury press release here, or hit the jump for the salient points. Still no comment from the DC (neé Detroit) Two on the development, or word from the Treasury on whether this effects Terminator product placement.
Combating lobbyist influence in the EESA process: The Treasury Department will implement safeguards to prevent lobbyist influence over the program, including restricting contacts with lobbyists in connection with applications for, or disbursements of, EESA funds.
Keeping politics out of funding decisions: The Treasury Department will ensure that political influence does not interfere with EESA decision making, using as a model for these protections the limits on political influence over tax matters.
Certification to Congress on objective decision making: In reporting to Congress, the Office of Financial Stability (OFS) will certify that each investment decision is based only on investment criteria and the facts of the case.
The investment process will be transparent and based on objective criteria:
- Only banks recommended by the primary bank regulator will be eligible for capital investments.
- OFS will publish a detailed description of the investment review process undertaken by the regulators and OFS.
- The Treasury Department will ensure adequate resources exist to process applications as quickly as possible with priority to the date of the application as received by OFS and will formulate procedures to ensure integrity and regularity in the application process.
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Saying you can't spend TARP funds on lobbying itself has little effect. Basically the company will spend more on lobbying from other non TARP resources (which they wouldn't have had available without TARP funds). For instance, a poor alcoholic asks for a handout and I give him $20 with the promise he won't spend it on booze - the alcoholic promises and uses another $20 bill he was saving for food on the booze instead. Maybe the only way to fix it is to put a moratorium on lobbying for a fixed period of time (I think lobbying is a crooked enterprise anyway as they are there to entice / sway / buyout our already loose in the morals politicians) to prevent this situation.
There was a Saturday Night Live skit where the business plan for the (first) bailout was to go back to congress in 3 months for another bailout so that they could come back 6 months later for another. For some reason, that skit was awfully prophetic.