05/21/2009 05:12 am ET Updated May 25, 2011

Bailout Watchdog Warns Of Lack Of Oversight, Potential For Fraud

WASHINGTON -- The Treasury Department's most ambitious plans to rescue troubled banks -- partnerships between the government and private investors, backed by the Federal Reserve -- are inherently vulnerable to fraud and should not be started without stronger safeguards, a top government investigator warned in a report to be released Tuesday.

The report also warned that the Treasury's $700 billion Troubled Asset Relief Program has evolved into a $3 trillion effort of "unprecedented scope, scale and complexity" and comes with too little oversight and too little information about what companies are doing with the taxpayer money they are getting.

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