Bailout Transparency?

Monday, October 20, 2008 4:00 PM

Treasury Secretary Hank Paulson early on declared that transparency going to be essential in the bailout plan:

“Transparency throughout this process will be important, and I look forward to providing regular updates as we move ahead to implement this strategy.”

 Bailoutsleuth.com, a blog tracking the bailout, is already taking the secretary to task for exactly the lack of transparency:

When the Treasury Department's bailout czar provided an update this week on the government's $700 billion plan to rescue troubled financial institutions, he vowed that it would be an "open and transparent program with appropriate oversight.''

 The next day, the Treasury Department put out an announcement about a major bailout-related contract with Bank of New York Mellon Corp. that fell short in the transparency department.

 The copy of the agreement that was made public had blacked-out paragraphs in the section covering Bank of New York Mellon's compensation. If the Treasury Department is unwilling to disclose the particulars of that contract -- or even the general outline of the compensation scheme -- that raises questions about how it will treat disclosure of other bailout transactions.

Today, Secretary Paulson announced the guidelines on the capital purchase program, stating that all transactions will be publicly announced within 48 hours of execution.  Any applications withdrawn or denied will not be announced. 

We'll keep an eye on this.

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