Obama violating law on TARP oversight?

posted at 8:55 am on March 20, 2009 by Ed Morrissey

Has the Obama administration broken the law on TARP?  It appears that it has violated a major law on oversight — by failing to provide any.

When Congress first created the TARP program, it insisted on oversight over the actions of the Treasury Secretary, rejecting the Bush proposal to allow Henry Paulson unlimited and unsupervised authority over $700 billion of taxpayer money. They created the Financial Stability Oversight Board (FINSOB), comprised of the Treasury Secretary, the Chairman of the Federal Reserve Board, the Chairman of the Securities and Exchange Commission, the Secretary of Housing and Urban Development, and the Director of the Federal Housing Finance Agency.  The law requires the board to meet on a monthly basis, but during the Bush administration it met at least every other week to review actions in relation to the bailouts.

Interim Assistant Secretary for Financial Stability Neel Kashkari testified before the House Financial Services Committee on December 10th about the oversight (emphases mine):

In addition to the normal oversight provided by Congressional committees of jurisdiction, the Congress established four important avenues of oversight: one, the Financial Stability Oversight Board; two, the Special Inspector General; three, the Government Accountability Office; and four, the Congressional Oversight Panel. I will review Treasury’s interaction with each body in detail.

First, we moved immediately to establish the Financial Stability Oversight Board, which, by law, includes: the Secretary of the Treasury, the Chairman of the Federal Reserve Board, the Chairman of the Securities and Exchange Commission, the Secretary of Housing and Urban Development, and the Director of the Federal Housing Finance Agency.

The law required the first board meeting to take place within fourteen days. We moved very quickly, and the Oversight Board met within four days. At that initial meeting, the members of the Board selected Chairman Bernanke to be Chairman of the Oversight Board. The law requires the Board to meet once a month, but it has already met four times in the just two months since the law was signed, with numerous staff calls between meetings, and expects to meet again this week.

We have also posted the bylaws and minutes of the Board meetings on Treasury’s website. In addition, the Oversight Board has interacted with other oversight bodies, such as the GAO and the Congressional Oversight Panel.

The listing of board minutes can be found on the Treasury’s website.  However, according to this list, the last FINSOB meeting took place on January 15th of this year — five days before Barack Obama’s inauguration.  The meeting was conducted via conference call.  It was the last meeting in which former Treasury Secretary Henry Paulson participated.

According to this, current Treasury Secretary Tim Geithner has yet to participate in the oversight function Congress mandated by law.  Despite receiving hundreds of billions of dollars in additional TARP funds, it appears that the current administration has performed zero oversight over it.  Not only does that beg the question as to what Tim Geithner is actually doing as Treasury Secretary, it also makes it appear that Congress has no desire to protect the money it’s shoveling into the West Wing of the White House.

I have contacted the White House for any comment they may have on this matter, and I will update readers when they respond (via HA reader Morgen).

Update: John at Verum Serum finds an interesting excerpt from the November 2008 FINSOB meeting:

Treasury officials and Members then reviewed and discussed the restrictions that would apply to AIG under the terms of the investment, including restrictions on corporate expenses, restrictions on lobbying, and limitations on executive compensation that would apply under EESA, as well as the additional limitations that would apply to senior executive compensation and bonuses. In addition, AIG would be required to comply with certain corporate governance requirements, including the formation of a risk management committee under the company’s Board of Directors.

So Treasury knew about the bonuses in November 2008.  Maybe if they’d held the FINSOB meetings, Obama wouldn’t have been gobsmacked by them.

Update II: Here’s a better link to the FINSOB meeting minutes archive.


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Over-sight! We don’t need no stinkin’ over-sight.

Dasher on March 20, 2009 at 8:58 AM

The amount of corruption that will be uncovered in this administration will be revolutionary.

Skandia Recluse on March 20, 2009 at 9:01 AM

impeach him

jp on March 20, 2009 at 9:01 AM

This makes me sick to my stomach….

Youngs98 on March 20, 2009 at 9:02 AM

Wonder how much of this we’ll hear on the news…. if at all.

Darbraun on March 20, 2009 at 9:02 AM

If a bus runs over a Treasury Secretary in the woods, and the MSM fails to report it, does it still make a noise?

innominatus on March 20, 2009 at 9:02 AM

Talk about living in BizzaroWorld. Just when you think BarryO can’t make any stupider rookie mistakes, he goes and proves he can. Is ANYONE paying attention to the floundering, is there NO ONE on duty??

Ed, you keep this up, they’ll just quit answering the phones at the White House when your number comes up on the caller ID.

JamesLee on March 20, 2009 at 9:03 AM

Mr. Obama’s apparent core committment to saying one thing and doing another (i.e., lying) was something many of us concluded he would do as President (as he had as a Senator – state and federal).

Please, please, someone file an action for a writ of mandamus to showcase the foolishness of this government.

Tamaqua on March 20, 2009 at 9:03 AM

Nice – I really hope the news networks pick up on this. What happened to candidate Transparency and Accountability?

Of course, it’s was pretty clear that the bonuses were a known issue, anyway. They paid some in December, and Bloomberg and CBS both did stories on it at the time.

It took the WH talking points meeting and subsequent Sunday show comments to really gin up a buzz over this.

hawksruleva on March 20, 2009 at 9:05 AM

Kash ‘N’ kari. I don’t trust that guy.

Brat on March 20, 2009 at 9:05 AM

If a bus runs over a Treasury Secretary in the woods, and the MSM fails to report it, does it still make a noise?

innominatus on March 20, 2009 at 9:02 AM

Well, maybe you’d hear the happy snort of the bus driver…

hawksruleva on March 20, 2009 at 9:06 AM

Impeach Obama and sue Congress for passing an unconstitutional bill. I bet laywers will be making a lot of money defending this administration.

I have called my dufus’ Senators and told them I expect them to uphold the Constitution. Not that that will do anything…they dont listen to the people.

becki51758 on March 20, 2009 at 9:06 AM

“I have contacted the White House for any comment they may have on this matter, and I will update readers when they respond (via HA reader Morgen).”

Ed,

In order to recieve any response from the White House, do you have to tell them your bowling average?

Rovin on March 20, 2009 at 9:07 AM

Perhaps they’ve held the meetings but the most technologically competent executive branch evah can’t figure out how to post them on the website?

CDeb on March 20, 2009 at 9:07 AM

Zero can hire Acorn to handle oversight, you know, what could go wrong?

Maquis on March 20, 2009 at 9:07 AM

impeach him

jp on March 20, 2009 at 9:01 AM

gotta win in 2010….

sven10077 on March 20, 2009 at 9:08 AM

we could always call Geo. W. (& dick cheney) back from retirement. oh right, they are war criminals because they killed the enemy…

kelley in virginia on March 20, 2009 at 9:09 AM

The amount of corruption that will be uncovered covered up in this administration will be revolutionary.

Skandia Recluse on March 20, 2009 at 9:01 AM
FIFY

neuquenguy on March 20, 2009 at 9:11 AM

Obama and his team of flunkies are the walking embodiment of the Peter Principle.

I never thought I’d say this, but dude – is anyone else wistfully looking back to the halcyon days of the Clenis and his team of flunkies? Hell, at least Slick was a Rhodes Scholar.

Flyover Country on March 20, 2009 at 9:12 AM

Well, meetings are pretty boring. I’m always trying to find a way to skip them myself.

“Point of order, Agenda Item #6b, Mr. Chairman, blah blah blah yada yada yada.”

Much more fun to hold “hearings” for the cameras where Congress can berate people for being close by when Congressional Democrats screw up.

We need a White House cleaning and for every Democrat in Congress to get thrown out on his or her worthless ass.

The market would SOAR if that happened.

NoDonkey on March 20, 2009 at 9:12 AM

Zero can hire Acorn to handle oversight, you know, what could go wrong?

Maquis on March 20, 2009 at 9:07 AM

This is the kind of joke that makes you cry, because it might not be a joke at all.

neuquenguy on March 20, 2009 at 9:13 AM

Over-the-top incompetence.

What a freaking joke. The things he does accomplish are offensive – and the things you take for granted will get accomplished are ignored.

Mr Purple on March 20, 2009 at 9:14 AM

Incidentally, Drudge is running a headline that Obama’s bracket is a bust…11/16 for a grand total of 69% accurate thus far. As opposed to his administration, which is O-fer the year thus far. Obama should nationalize ESPN and appoint himself Czar of Bracketology, just so he can get an answer right occasionally.

Flyover Country on March 20, 2009 at 9:16 AM

THEY (OUR polititians) KNEW – if they took the time to read it…………..The term sheet for AIG in November mentions the bonuses – it’s 6 PAGES LONG – c’mon no one can convince me that they didn’t know.

http://www.treas.gov/press/releases/reports/111008aigtermsheet.pdf
EXECUTIVE COMPENSATION:
SECTION 2. The annual bonus pools payable to Senior Partners
in respect of each of 2008 and 2009 shall not exceed the
average of the annual bonus pools paid to Senior Partners for
2006 and 2007 (in each case exclusive of AIG’s historic quarterly
bonus program, the amount of which will not increase for any
participant, and subject to appropriate adjustment for new hires
and departures).

sherryande on March 20, 2009 at 9:16 AM

This administration just writes checks to those that don’t pay taxes with funds they will get from taxpayers or worse (worthless printed money). If there was oversight those companies that owed millions in back taxes would not have received any, is this a cost savings? I suspect the money will disappear regardless of what is done. It sure won’t go to immigration reform or enforcing immigration law.

workingforpigs on March 20, 2009 at 9:20 AM

Amazing! The O’s got people watching everything but the money. At least, that’s what he’s got everyone thinking. Yeah, uh huh, maybe the money’s going out just as planned. He’s greasing all kinds of skids. Wonder what the line on the Tarheels is?

Kissmygrits on March 20, 2009 at 9:20 AM

Obama said he’ll give it his full attention . . . right after the Letterman show.

rplat on March 20, 2009 at 9:21 AM

Over-the-top incompetence.

Mr Purple on March 20, 2009 at 9:14 AM

You do have to admit that this is the most competent display of incompetence ever.

They are really good at what they do.

Yoop on March 20, 2009 at 9:25 AM

Oversight is for Republican administrations, silly, not when a Democrat is in office.

promachus on March 20, 2009 at 9:25 AM

C’mon, give Dear Leader a break. He had a Tonight Show appearance to prepare for.

rbj on March 20, 2009 at 9:25 AM

the special olympics of oversight….j/k

jp on March 20, 2009 at 9:26 AM

Push this story Ed!!! Push it hard!!! Don’t worry about whether the NYT or Washington Post give YOU credit!! Just make sure they are forced to run this. Push, push, push!

Sultry Beauty on March 20, 2009 at 9:29 AM

It’s all a shell game, except that they don’t even bother to put a pea under any of the shells. They figure we won’t even notice.

We just continue to play the game as innocent taxpayers.

Yoop on March 20, 2009 at 9:30 AM

Man-caused disaster.

the_nile on March 20, 2009 at 9:30 AM

C’mon, give Dear Leader a break. He had a Tonight Show appearance to prepare for.

rbj on March 20, 2009 at 9:25 AM

Seriously, he had to put a lot of time to come up with all his zingy one-liners. What could go wrong?

BuckeyeSam on March 20, 2009 at 9:30 AM

Scarborough had Chris Hansen on his show this morning, talking about his program coming up this Sunday on MSNBC. Hansen has apparently spent over a year now doing background work and investigation into what created the mortgage crisis that is driving a stake through the heart of our economy.

Listening to his take on the matter, clearly he is pointing the finger of blame directly at the lenders, their greed and their manipulation of the poor little home owner.

So Scarborough asks Hansen, “What were the regulators doing while all of this was going on?”, to which Hansen replied, “They weren’t doing anything” …. and there was no follow-up question.

A good journalist looking for the truth would have asked, “Why not?” But that question was never asked.

You see, the politicians who appointed these regulators to provide oversight to the lending institutions, were receiving hundreds of thousands in campaign contributions from the very same regulators. So the regulators were happy pulling down $100,000 salaries, and the politicians were happy receiving boatloads of money in campaign contributions. That’s how the game is played, so why worry about what’s going on with the lenders when everyone is raking in big fat checks ….. for doing nothing as our economy is taking a nosedive in the abyss.

Yeh, sure. The Lenders were the greedy ones. OK, they were, but the only reason they got away with it was because the politicians and regulators were greedy little bastards too.

Money and power, baby. Screw the rest of us.

fogw on March 20, 2009 at 9:35 AM

I think they slipped something into one of the bills about not needing oversight. I’m sure it’s in there somewhere and if not maybe they used invisible ink to write that part. They don’t need oversight they are running a transparent presidentency.

Brat4life on March 20, 2009 at 9:35 AM

Obama and his team of flunkies are the walking embodiment of the Peter Principle.

I never thought I’d say this, but dude – is anyone else wistfully looking back to the halcyon days of the Clenis and his team of flunkies? Hell, at least Slick was a Rhodes Scholar.

Flyover Country on March 20, 2009 at 9:12 AM

This is the result of voting for an affirmative action scholar. Affirmative action is nothing more than the codification of the peter principle for minorities.

calguyintexas on March 20, 2009 at 9:39 AM

There is no need for oversight in a communist system because all of the money belongs to the state.

calguyintexas on March 20, 2009 at 9:40 AM

Obama said he’ll give it his full attention . . . right after the Letterman show.

rplat on March 20, 2009 at 9:21 AM

And don’t forget he had to take the time to fill out his bracket in the NCAA Basketball Challenge:

First Round:

ROVIN………..140—–94.23%—–267,114

OBAMA………110—–22.41%—-3,592,939

(this is out of 5 million)

Pass me the teleprompter Mr. President and go sit in the corner………

Rovin on March 20, 2009 at 9:40 AM

FINSOB?

All sorts of possibilities on that one.

coldwarrior on March 20, 2009 at 9:42 AM

I think Obama knew about the bonuses. I just don’t think he cared until he realized that it was going to be a problem politically. Then of course he tried to find a way to make it work for him.

The man is opportunistic.

Terrye on March 20, 2009 at 9:42 AM

The White House and/or Congress violating the law?
.
Say it ain’t so Charlie Brown!!

Hal-9000 on March 20, 2009 at 9:45 AM

But those were rules established under the last administration….

albill on March 20, 2009 at 9:45 AM

You’ll notice you won’t find the usual Liberal Trolls in here defending them. They stick to the stupid stuff and leave us to discuss the adult stuff. Would like to see AP comment on this but he won’t. He used to be the one coming up with stuff like this. Now it’s just polls, polls, polls. What a difference a little attention, a hot liberal TV host, & a few years makes.

Sultry Beauty on March 20, 2009 at 9:45 AM

What a difference a little attention, a hot liberal TV host, & a few years makes.

Sultry Beauty on March 20, 2009 at 9:45 AM

K-pow….dead center champ…

sven10077 on March 20, 2009 at 9:46 AM

fogw:

The problem of course was that social engineers like Obama decided owning your own home was a right rather than a privilege and so they forced through all sorts of loan programs designed to put unqualified people into homes. They pressured the lenders, but once the government decided to insure the loans the lenders went along. A lot of people helped make this happen. But to just talk about regulation is not really true. It was not a lack of regulation, it was a deliberate change in policy.

Terrye on March 20, 2009 at 9:46 AM

Don’t worry folks I’m sure Rumbo is handling this in his brainstorming sessions with Carville, Stephy and Begala.

Dire Straits on March 20, 2009 at 9:46 AM

I think Obama knew about the bonuses. I just don’t think he cared until he realized that it was going to be a problem politically. Then of course he tried to find a way to make it work for him.

The man is opportunistic.

Terrye on March 20, 2009 at 9:42 AM

Well, of course they did! They knew the Tea Parties, and the Rick Santellis were gathering steam and couldn’t just be brushed off, much like Cramer was (yutz!). This was merely an attempt at deflecting that anger from them and the government in general to some nice, deserving, populist target, those eeevvviiiillll Wall Street Fat Cats that are just trying to make us all die.

The sad thing is that it seems to have at least temporarily worked.

JamesLee on March 20, 2009 at 9:47 AM

albill:

No, those were rules established under the Clinton administration. Bush for his part did try as far back as 2003 to reign in Fannie Mae and Freddie Mac only to be told by Democrats that he was overstepping his bounds.

Terrye on March 20, 2009 at 9:49 AM

Pass me the teleprompter Mr. President and go sit in the corner………and clean youself like the other cur mutts

Rovin on March 20, 2009 at 9:40 AM

thomasaur on March 20, 2009 at 9:50 AM

Someone made a good point. Maybe they had the meetings and didn’t post the Minutes. Maybe they had REALLY good reasons not to put it up. The WH won’t respond to Ed. How to verify?

Sultry Beauty on March 20, 2009 at 9:52 AM

JamesLee:

It might just backfire. Things like this often do. So far I have heard as much anger directed toward the Congress as Wall STreet.

Terrye on March 20, 2009 at 9:53 AM

But to just talk about regulation is not really true. It was not a lack of regulation, it was a deliberate change in policy.

Terrye on March 20, 2009 at 9:46 AM

I concur. I was only addressing the regulation as it was brought up, yet not pursued in the Hansen segment. The change in policy regarding the less restrictive guidelines put on the lenders was also mandated by politicians, was it not?

Back to the same greedy little bastards again.

fogw on March 20, 2009 at 9:59 AM

Pardonme but why does anyone think this administration should pay ANY ATTENTION TO THE LAW? Let’s see: Presidential proclamation to do stem cell research but the law is that no federal money can be spent there. He is so egotistical that he feels what he says is the law! Attorney General: only when both state law and federal law is violated will we enforce federal law as it pertains to marijuana. There will be no more ICE enforcement of illegal…oops my bad, undocumented workers. We need to see about “comprehensive” boarder enforcement regardless of the laws on the books. Why enforce IRS rules (law) when it comes to taxes and cabinet picks? Why worry about Sen Dodd making amendments to the budget law re: bonus allowance by certain dates, when actually the administration wrote it and then ignored it?

This just scratches the surface on what has already happened in the first 60 days. This guy is so unorganized or at least it seems that way. He is marching toward total destabilization so that he can implement Marshall law and then make his total conversion to a totalitarian system of government. Don’t believe it? Look at the legislation yesterday that singled out a small group of people to tax to death. What is the repercussion? The public just goes along, don’t they? Who is the next group to receive that same treatment? Obama is evil and we better wake up to it now!

Why does no one re run the tape of Obama singing the absolute praises of CEO Liddy? Did any one else see that or was I dreaming it. Now he says he is appalled but don’t you believe it; Liddy and AIG both were HUGE contributors weren’t they?

Pardonme on March 20, 2009 at 10:00 AM

I never thought I’d say this, but dude – is anyone else wistfully looking back to the halcyon days of the Clenis and his team of flunkies? Hell, at least Slick was a Rhodes Scholar.

Flyover Country on March 20, 2009 at 9:12 AM

Yup. And Slick Willie understood that he needed a healthy economy to support his socialist agenda.

I’m now wondering whether a President Biden might not be the better option.

rbj on March 20, 2009 at 10:03 AM

Great Work Ed!!!

Perhaps you found the right thread to pull to begin the unraveling this American nightmare.

Keep pulling!

katy on March 20, 2009 at 10:07 AM

This is actually an example par excellence of a phenomenon I’ve always thought needed more attention.

Congress didn’t create FINSOB out of some overwhelming concern for taxpayer money. THEY DID IT FOR HEADLINES.

All they care about is how something looks in the today’s news. Then it’s on to tomorrow’s charade. When are the people going to figure this out?

jeanneb on March 20, 2009 at 10:23 AM

Governing Not Present on this one…..

AnninCA on March 20, 2009 at 10:30 AM

Brownie Timmy, you’re doing a heck of a job.”

Dasher on March 20, 2009 at 10:31 AM

Laws? Obama doesn’t need to follow laws.

HoosierEm on March 20, 2009 at 10:32 AM

People need to start heading off to jail so Obama can pardon them and get them back to work for the American people the gross criminal negligence thing.

econavenger on March 20, 2009 at 10:32 AM

Dead on, Ed. Passing the 90% tax on AIG bonuses is cold comfort to Congress and the Obama Administration. Barry, does your buck stops here statement come with an expiration date?

Angry Dumbo on March 20, 2009 at 10:36 AM

fogw on March 20, 2009 at 9:35 AM

You forgot all the Fannie Mae and Freddie Mac Foundation money that went to various districts. We still don’t have a complete accounting of all that, by the way.

DrSteve on March 20, 2009 at 10:37 AM

You forgot all the Fannie Mae and Freddie Mac Foundation money that went to various districts. We still don’t have a complete accounting of all that, by the way.

DrSteve on March 20, 2009 at 10:37 AM

Fannie Mae is still throwing money around, just not through a foundation anymore. The former CEO of the foundation is back on payroll at Fannie and tossing out millions for anything that relates to “homeownership preservation.” They just gave Queen Latifah a million dollars to do a half-hour video on avoiding foreclosure scams.

rockmom on March 20, 2009 at 10:49 AM

Don’t I remember something from the election about Obama not participating in meetings as a Senator? Kind of a pattern here.

He likes the letterhead (Harvard Law Review editor), not the responsibility (researching and publishing articles).

cs89 on March 20, 2009 at 10:55 AM

And I’ll add the symbols (Office of the President Elect!) but not the groundwork (most prepared incoming administration evah!)

cs89 on March 20, 2009 at 10:56 AM

Daisy Cutter sized Bombshell

faraway on March 20, 2009 at 11:16 AM

Gee I thought Wolfson (sp?) had ultimate authority over this TARP garbage. Was there really oversight? pshaw.

Weebork on March 20, 2009 at 11:50 AM

Oversight? We don’t need no oversight! The Obamassiah knows all, sees all.

GarandFan on March 20, 2009 at 11:51 AM

Thanks fpr posting this, Ed. This is the most disturbing incompetence so far in this administration.

And, it another example of Obama’s incompetence that has no reporting in the MSM. So, Obama doesn’t even have to make up excuses for it.

Is there not a single major news outlet who’s editors and reporters and columnists care more about what happens to our country than they worship Obama?

Loxodonta on March 20, 2009 at 1:16 PM

Aw, come on, Ed, why are you picking on Obamateur? You know he has important stuff to do, like Leno, White House parties, town hall meetings, making sweet, sweet love to Teleprompter…..

William Teach on March 20, 2009 at 1:20 PM

The amount of corruption that will be uncovered covered up in this administration will be revolutionary.

Skandia Recluse on March 20, 2009 at 9:01 AM

FIFY

JustTruth101 on March 20, 2009 at 3:02 PM

Hell froze over! MSNBC is playing video of the March 3 meeting!!!

NightmareOnKStreet on March 20, 2009 at 3:53 PM

Excellent!!!

johnnyU on March 20, 2009 at 7:55 PM

The Cripple-In-Chief…

RealDemocrat on March 20, 2009 at 9:18 PM

Ed, thanks for doing the work and research on this. I, too, would love to know exactly what Geithner is doing. Is he making coffee? I don’t think he’s answering the phone.

Perhaps if TOTUS appointed a few people to the Treasury Geithner could get busy. This WH bragged about how it would be ready to rule, but it certainly wasn’t ready to govern.

INC on March 20, 2009 at 9:27 PM

Obama and his team of flunkies are the walking embodiment of the Peter Principle.

I never thought I’d say this, but dude – is anyone else wistfully looking back to the halcyon days of the Clenis and his team of flunkies? Hell, at least Slick was a Rhodes Scholar.

Flyover Country on March 20, 2009 at 9:12 AM

Yeah, I know.

INC on March 20, 2009 at 9:29 PM

The lights are on but no one is home!

seriously, if my taxes increase to pay for this tarp, I may sue congress and President TelePrompter for not attending the required board meeting. In the meantime, I will email this article to my contacts list!

TN Mom on March 21, 2009 at 12:16 AM

Maybe Obama should be as careful with his policies and selecting and researching of officials for government positions as he is in selecting his family dog.

rsl775 on March 21, 2009 at 11:40 AM