Pelosi Calls on Paulson to Strengthen Conflict of Interest Rules for Financial Rescue Package
House Speaker Nancy Pelosi is calling on the Treasury Secretary Henry Paulson to strengthen the conflict of interest provisions included in the Emergency Economic Stabilization Act (EESA) to ensure that taxpayers’ interests are protected, according to a a letter to Paulson released by Pelosi's office.
Pelosi says that the conflict of interest interim guidelines for contractors and asset managers who will be hired by Treasury to run the program fall short of meeting the standards directed by Congress to protect taxpayers. The bailout will cost each taxpayer more than $2,000 each.
“As I have reviewed the interim guidelines issued by Treasury yesterday, and those in Treasury’s solicitation for asset management and other portfolio management services, I am very concerned that they fail to meet the tough conflict of interest standard directed by Congress in the legislation,” the California Democrat says in her letter.
Pelosi and other congressional leaders led Congress to approve an unprecedented $700 billon package that will allow the federal government to absorb billions of dollars of bad debts generated by the ongoing credit and foreclosure meltdowns. Paulson was the architect of the original bailout plan as proposed by President Bush. Bush and others warned of dire economic consequences if Congress had not passed the bailout.
At issue, Pelosi says, is concern that companies that benefit from the Troubled Assets Relief Program (TARP) may also be eligible to offer asset management or other contractor services if Treasury personnel approve a rescue plan.
"These guidelines would appear to permit financial institutions with a clear conflict of interest to participate in the management of the TARP, a situation that provides insufficient protection to taxpayers," Pelosi says. "Given the significance of the TARP for the recovery of our financial markets, the American public must have complete confidence that those managing the program are doing so entirely for the benefit of the public and not to benefit their own self-interests."
Members of Congress and others have expressed concern over being able to police this massive rescue effort. The economic bailout package, in fact, failed in its first vote in the House.
Pelosi concludes: “We all need to assure the American people of our commitment to meaningful oversight and to protecting the interests of taxpayers. I therefore urge you to reconsider your interim guidelines and to strengthen them to avoid even the appearance of conflicts of interest by the same financial institutions who may also benefit” from this program.
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Pelosi says that the conflict of interest interim guidelines for contractors and asset managers who will be hired by Treasury to run the program fall short of meeting the standards directed by Congress to protect taxpayers. The bailout will cost each taxpayer more than $2,000 each.
“As I have reviewed the interim guidelines issued by Treasury yesterday, and those in Treasury’s solicitation for asset management and other portfolio management services, I am very concerned that they fail to meet the tough conflict of interest standard directed by Congress in the legislation,” the California Democrat says in her letter.
Pelosi and other congressional leaders led Congress to approve an unprecedented $700 billon package that will allow the federal government to absorb billions of dollars of bad debts generated by the ongoing credit and foreclosure meltdowns. Paulson was the architect of the original bailout plan as proposed by President Bush. Bush and others warned of dire economic consequences if Congress had not passed the bailout.
At issue, Pelosi says, is concern that companies that benefit from the Troubled Assets Relief Program (TARP) may also be eligible to offer asset management or other contractor services if Treasury personnel approve a rescue plan.
"These guidelines would appear to permit financial institutions with a clear conflict of interest to participate in the management of the TARP, a situation that provides insufficient protection to taxpayers," Pelosi says. "Given the significance of the TARP for the recovery of our financial markets, the American public must have complete confidence that those managing the program are doing so entirely for the benefit of the public and not to benefit their own self-interests."
Members of Congress and others have expressed concern over being able to police this massive rescue effort. The economic bailout package, in fact, failed in its first vote in the House.
Pelosi concludes: “We all need to assure the American people of our commitment to meaningful oversight and to protecting the interests of taxpayers. I therefore urge you to reconsider your interim guidelines and to strengthen them to avoid even the appearance of conflicts of interest by the same financial institutions who may also benefit” from this program.
Watch more breaking news now on our video feed:
Bookmark http://onthehillblog.blogspot.com/ and drop back in for more news from the nation's capital.
Labels: bailout, Congress, economy, Henry Paulson, Nancy Pelosi
posted by Scott Nance at
10:56 PM
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