Bloomberg News has filed a Freedom of Information Act lawsuit over the Bush administration’s refusal to reveal the nature of $2 trillion in loans made to businesses and the collateral used to secure those loans.
 
These loans are not part of the $700 billion TARP fund set up by Congress a few weeks ago. These are emergency loans made directly from the Federal Reserve, which has long been authorized by law. Bloomberg News notes that these emergency loans have skyrocketed in the last few months, but without the minimal oversight built into the TARP program:

The Fed stepped into a rescue role that was the original purpose of the Treasury’s $700 billion Troubled Asset Relief Program. The central bank loans don’t have the oversight safeguards that Congress imposed upon the TARP.

Total Fed lending exceeded $2 trillion for the first time Nov. 6. It rose by 138 percent, or $1.23 trillion, in the 12 weeks since Sept. 14, when central bank governors relaxed collateral standards to accept securities that weren’t rated AAA.

Bloomberg submitted a FOIA request to find out which companies received these emergency loans and what securities were used for collateral, but the Fed denied the request. The Fed argues that revealing that information would require revealing corporate secrets that might harm the companies being helped.

Bloomberg, on the other hand, argues that given the unprecedented level of risk being taken with government funds, taxpayers have a right to know where that money is going and what is being given to secure the loans being made with their tax dollars.