Bush Treasury Dept. Redacts More Bailout Contracts

I was on CNBC this morning discussing the Wall Street bailout, and specifically, the Bush Treasury Department's decision to redact key parts of private contracts that would tell the public how much taxpayer cash various law firms, accounting companies and stock management houses are going to receive as part of this boondoggle. The lack of transparency is stunning, even if it is exactly what many bailout opponents predicted. You can watch the clip here, and you can see the redacted documents here and here (and a big hat's off to Bailoutsleuth.com for all its great work).

What was fascinating about this CNBC exchange was the interplay between CNBC anchor Dylan Ratigan and CNBC correspondent Steve Liesman - interplay that suggests even the highest echelons of the media and business community are realizing something is very, very wrong.

Essentially, Liesman delivers the Treasury Department talking points, saying that it's acceptable for the government to hide the amounts that taxpayers will be forced to pay these well-connected execs and fat cats - and that this information will come out at some point in the future anyway. Ratigan, however, vehemently agreed with me that these kinds of redactions are absolutely outrageous, both substantively in terms of how they keep taxpayers in the dark, and psychologically in terms of how the behavior helps intensify the public's already seething anger about the bailout.

Topping it off, former Reagan official William Seidman piles on, making the point that government officials should behave differently than corporate executives, and that Treasury Secretary Hank Paulson is using the redactions to keep heat off himself and from a public that believes he's going to use his authority to give away truckloads of taxpayer cash to his former Wall Street colleagues.

What this suggests to me is that even parts of the Establishment and the business community are waking up to the kleptocracy - and specifically, to how the intersection of kleptocracy and this bailout bill could continue to undermine confidence in the economy.

If part of what is ailing the economy is an understandable lack of psychological confidence in Corporate America and our government, then blacking out huge swaths of government-corporate contracts is not the way to turn that psychological tide - it's a way to exacerbate it, especially since the redactions come after both Congress and the Bush administration promised unprecedented transparency.

Indeed, some of these contracts are with companies like Ernst & Young, which were intimately involved in companies like Lehman Brothers and AIG, which are at the center of the meltdown. Shouldn't taxpayers have a right to see - in real time - how our money is now being spent on those same companies? And shouldn't the Treasury Department know that when it publicizes contracts with redacted sections, it only contributes to the overall sense that our government is acting in bad faith?

Comments

[pakmn74]

Why are the banks being allowed to use the bailout money to do everything except give loans? Why aren't the democrats in congress insisting on better controls over this? Now we are finding out that banks are planning to use the capital infusion from the government to buy up other banks, to give bonuses and so on. This seems like a major snow job on the american taxpayer all over again.

[iheardthisbefore]

All actions by the Fed and the Treasury should be totally transparen­t...redact­ed documents at
this stage of the crises is simply unacceptable.

Unfortunately, in my opinion, it appears that we are too late "fix" the problems that we have.
The Fed and the Treasury are tripping over themselves to throw money at every new problem
that rises...even problems that occur as unintended consequences to "solutions" we have
already established.
We simply do not have a public purse that is big enough to adequately fund this "mega monster"
quagmire of band-aid problem solving.

Over the coming weeks things will continue to get worse.
I frankly do not see a way out of this without letting some "big ones" fail.

[Erdgeist]

Uncle Sam is becoming Uncle Scam. I think Paulson is trying to protect Wall Street with the taxpayers money. Keep in mind that there is no law enforcement in this bailout bill.

The FBI should have been given a chunk of this money together with the NSA to look into laws that may have been broken and to mine data from these troubled institutions. In a way we are dealing with financial terrorism.

Maybe Dems need to rewrite some of the Patriot Act and redefine "terrorism" to include "financial terrorism".

[Sundialsvc4]

It isn't "bad faith," David. It's a swindle. It's a ... High Crime.

When "Madame Secretary" waltzed into her new office and proclaimed that "impeachment is off the table," she affirmed that "the supreme laws of this land will not be enforced."

It's unconstitutional for her to say this. The document clearly says that "ANY Civil Officer," specifically including but NOT limited to the Pres and the Veep, "SHALL BE impeached." It goes on to specifically list (but not limit itself to) two such crimes: treason, and bribery.

The swindlers include a who's who of the United States government:
(1) Senior officers, including Sec. Paulson and many others.
(2) The Board of Directors (Congress).
(3) The executive staff (Bush, Cheney).
(4) The auditors and arbiters, up to and including the Supreme Court.

In other words, a festering hive of rottenness, all busily cross-ruffing the game to protect themselves, making sure not to prosecute themselves, and showing not one scrap of remorse.

Would you do business with this country? Would you use its currency, which it manufactures to the tune of $1 million-plus a minute? Just how long do you want to keep being swindled?

[proreality]

We are being lied to because the entire system is insolvent. These are stop gap measures to keep the entire global financial system from imploding before the kleptocracy (the con's) are able to save themselves and ring every last dime from their mark (the taxpayer). Everything leads back to the derivatives market. The collapse of Lehmen, the bailing out of AIG and the equity injections into the banking system is to hide the fact that there is not enough money in the world to cover the spreads that have been created in this shadow banking system. The markets are being manipulated beyond all reason because the fuse leading to the fissionable material that is about to cause the greatest financial implosion in the history of the world has been lit. The Fed, SEC, Treasury, CFTC, Presidents working group on financial markets, are manipulating the FOREX, COMEX, and all the major markets trying to lengthen the fuse and hide the quadrillion dollar (thousand trillion)dollar weapon of economic mass destruction that is about to explode. Most importantly they can't allow it to happen before they have the opportunity to steal or contest the election.

[Sundialsvc4]

Well, "proreality," I sorta look on this as: "there's way-y-y too much 'money' and not enough actual trade." Not enough production. Not enough of people building something in a factory, taking it down the street to the customer (another factory), and so-on until it winds up in a store across town where the workers can spend their wages to buy it.

Forty-seven years ago, a five-star General named "Ike" Eisenhower ... fresh from having won World War II in Europe, and now closing his tenure as Commander in Chief ... warned us that "the military industrial congressional complex" (his original term) would subsume every legitimate social priority of government, and leave nothing of value in return. His prediction was correct.

"Money" we got. $4 million popped into existence while I wrote this, and another $2 million or so will "appear" as you read it. But... does it actually MEAN anything? No.

We can fix this. Oh yes. But not with "money for money's own sake." That's the first, and most fundamental, illusion that must fall. But THESE cats are steeped in that illusion, and derive their entire power from it.

[MuchMadness]

What we need is a congress that respects the United States constitution and that will not be bullied by corporations and executive branch officials.

[kushykush]

All that is fine David, but why skirt the basic question: Where were the Democrats at the writing of this bill? Could they not have put two lines in this bill prohibiting Treasury to withhold such information under the FOIA (Freedom of Information Act)? Why fret after the fact and lay all the blame on the Executive, when it seems that the Legislative branch is equally culpable? How come that no one from the Democrat side, either in the House or the Senate, came up with a proviso that contracts awarded under this bill will be available in full to the public ?

[freebeer]

Yes kush, but David is not skirting any questions where criticizing Democrats are concerned. He more than most is unafraid to call them out when they behave like Republicans. Go to his site and read many articles that never end up here as they are too honest.

One thing is for certain. We don't see an army of Warren Buffet clones polluting this place with their fascist lies like we did in the midst of this crisis, when the bailout was being sold to all of us.
That is a nice change, maybe they are all holed up somewhere counting their silver and gold laughing at us?

Now the bailout has shown to be complete folly and we are broke, while the international bankers cartel is much stronger. A bipartisan crime against our nation was committed.

[ResearchGuy]

A signing statement would have "disappeared" the prohibition.

[racetoinfinity]

They might know it, but the outrage expressed by the netroots (the liberal and progressive blogosphere) is not as important as what the outrage would be if they showed the amounts, and it then became a topic of conversation among the general public (over coffee, in bars, among people who don't read progressive blogs), is my guess.

[SteveMDFP]

The secrecy in spending taxpayer dollars should itself be decried by the mainstream media. Let's all Digg this (or Buzz, or however y'all like to share stories). Forwarding to investigative reporters and pundits could also be useful.

[rpahk]

Paulson's original proposal of $700 billion with no strings attached or any accountability should have been the warning sing that this deal would be nothing more than a Wall Street slush fund. Paulson is now frantically running around throwing money to his golfing buddies as fast as possible before the Dems win the election. Obama must insist on 5 Nov that he starts putting his people in place in Treasury in an observing role to enable them to take over without pause on 20 Jan.

[tompoe]

We have no-bid contracts as standard operating procedure. We have redacted contracts with regulated banks receiving taxpayer dollars. We have a fundamentally flawed financial system that does not work. So, at what point is it appropriate to demand answers and change, or impose punishment on those who fail to heed the demands? And, what form does the punishment take? This isn't about determining if something occurred or didn't. This is about punishing wrong-doers who fail to conduct themselves appropriately. One form of punishment is to inform the public. CNBC started by raising the issue. The Steves of the world now need to do their part.

There's nothing fascinating about Steve's defense. He's a corporate media reporter that is deathly afraid of being black-listed if he informs the public. By having his defense video in his pocket, he thinks he can still have access to officials in powerful positions. I beg to differ. I think he needs to punish the wrong-doers, and if they black-list him, he needs to inform the public.

[knowBuddhaU]

Bait & Switch is our national PR firm, doncha know. A million thanks for keeping us posted.

[OB-GYN]

Absolutely we the people should have full transparency. It smells of more cover-up!

Any suggestions for how to get full disclosure?

I've already written my senators and congressmen, and the White House.

Now I'm even more irritated over the bailout.

[sunny123]

And you are surprised, why? What has changed? Shrub is still inoffice, Paulson is still his man. Nothing will change until we get Obama/Biden in office. Hopefully, sooner rather than later.

[Poboy]

There are Congressional hearings, House Oversight and Financial Services Committees in the House and Senate Banking Committee, where these officials are answering to the Congress and to the people, going on right now, today.

Can't the Congress demand these documents without the redactions and then release them unredacted to the public?

As for these auditing firms, these financial crises could not have happened without their active support and complicity, just as they were during the Enron era, which caused the demise of at one time the model of the accounting profession, Arthur Anderson, which may the the accurate symbol for the profession.

[tedbear]

It does seem like typical Bush-like behavior. It might make sense to keep the payment private to a firm that will be putting together dispersion of the money, the government's excuse for redacting that figure is to minimize payment to other firms that will be hired. But, why wouldn't the Treasury Department negotiate the other contracts before putting out a document? It doesn't make alot of sense, and the comment here about government business is not the same as private sector business is a great point, and I don't know this for a fact, but Paulson, someone whose career has been in the private sector may not have been the best person for the job of running the Treasury Department. On the one hand he has experience in the area, but on the other hand, there should not be ANY hint of a cover up when it comes to Federal Government agencies. period, and obviously that has been the norm in the Bush administration..