Treasury Inspector General: The Bailout Is 'a Mess'

As of yesterday, it appeared that Treasury Secretary Henry Paulson is just making things up as he goes along, unsure how to implement his bailout strategy. It's a good thing Congress mandated all kinds of oversight on the Bush administration.

Or, on second thought....

In the six weeks since lawmakers approved the Treasury's massive bailout of financial firms, the government has poured money into the country's largest banks, recruited smaller banks into the program and repeatedly widened its scope to cover yet other types of businesses, from insurers to consumer lenders.

Along the way, the Bush administration has committed $290 billion of the $700 billion rescue package.

Yet for all this activity, no formal action has been taken to fill the independent oversight posts established by Congress when it approved the bailout to prevent corruption and government waste. Nor has the first monitoring report required by lawmakers been completed, though the initial deadline has passed.

"It's a mess," said Eric M. Thorson, the Treasury Department's inspector general, who has been working to oversee the bailout program until the newly created position of special inspector general is filled. "I don't think anyone understands right now how we're going to do proper oversight of this thing."

To be sure, Congress did add layers of oversight and scrutiny, "including a special inspector general to be nominated by the White House and a congressional oversight panel to be named by lawmakers themselves."