GAO: Treasury bailout program lacks oversight

The first audit of the $700 billion treasury bailout plan by the General Accounting Office says that there is very little oversight on how the financial institutions being helped are spending the money or whether they are complying with restrictions on executive pay. AP reports:

The government must toughen its monitoring of the $700 billion financial bailout to ensure that banking institutions limit their top executives’ pay and comply with other restrictions, federal auditors said Tuesday in the first comprehensive review of the rescue package.

The Treasury Department has no mechanism in place to track how institutions are using $150 billion in taxpayer money that the government injected into the banking system as of last month, the Government Accountability Office concluded in its report to Congress.

The bailout plan established a special inspector general to have oversight over program and Neil M. Barofsky, a former federal prosecutor, was nominated for the position. There has not yet been a vote, however, because an unnamed Republican senator has apparently placed a “hold” on the nomination, a procedural tactic used to deny confirmation hearings for nominees for federal posts.