Treasury Docs Still Blacked Out

by Ben Protess
ProPublica, Dec. 23, 2008, 9:54 a.m.

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Two months and counting, the Treasury Department still refuses to release key details of contracts it awarded as part of its $700 billion taxpayer-funded bailout plan.

ProPublica and others first noted the black-out in October when the Treasury named Bank of New York Mellon as the custodian of the bailout.

Treasury officials said back in October it would be only a matter of weeks before they shared how much they are paying the bank to keep the books for the government’s troubled asset relief program (TARP).

But in the publicly released copy of the contract, compensation figures for the bank, described by the government as the “prime contractor,” remain just as blacked out as they were two months ago. The Treasury, meanwhile, has already plowed through nearly $250 billion in TARP cash, with Bank of New York Mellon holding and tracking the assets.

We called Treasury and the bank again to ask when the compensation figures will be released but haven’t heard back.

Last month, Treasury spokeswoman Jennifer Zuccarelli declined to provide us a timeline. Zuccarelli explained that the department does not want to reveal the financial terms of the three-year deal while other contracts related to the bailout are being negotiated. “We don’t want to put ourselves at a competitive disadvantage,” she said.

It’s unclear, however, whether any outstanding contracts remain.

Ironically, the government released the redacted Bank of New York Mellon contract one day after Treasury’s point man for the bailout touted the plan’s transparency.

“Consistent with Congress’ intent, we are committed to transparency and oversight in all aspects of the program,” said Neel Kashkari, the Treasury official.

In the spirit of the season, perhaps Treasury will finally let taxpayers know how much of their money is going to the bank. We’re not holding our breath.

3 comments

Kris Alman

Dec. 23, 2008, 12:26 p.m.

In the meantime, our family gets solicitations for Well Fargo’s Three-Step Refinance SYSTEM ®. Teased with a 15 year fixed rate of 5.250%; no closing costs; no application to fill out; in most cases, no appraisal required; no application fees or appraisal costs; convenience of closing from home(to improve upon our 15 year fixed rate of 5.875%), WE DON’T NEED IT. (And of course, the lower rate is only available for 30 year fixed loans now…)

I asked the earnest representative whether this program was part of the bail-out. She said “No,” that the program has been around for years, and is just another way Wells Fargo is helping its customers. In fact, this solicitation is so popular she was drawn out of another department to help.

She extolled Wells Fargo’s integrity and told me all about the “Hope Now” effort.
http://www.bizjournals.com/phoenix/stories/2008/02/11/daily17.html
http://www.xyhd.tv/2008/02/random-news/project-lifeline-and-hope-now-plans-to-prevent-mortgage-foreclosure/

Initiated in Februrary 2008, Paulson was quoted as saying, “No program can bring every struggling borrower into the counseling and evaluation process, and we cannot help those who choose not to honor their obligations. But Project Lifeline has the potential to offer new solutions to responsible, able homeowners who want to keep their homes.” There was no estimate of how many people would be helped.

Then there’s the Wells Fargo ruling.
http://www.washingtonpost.com/wp-dyn/content/article/2008/11/09/AR2008110902155.html?wprss=rss_politics/administration

Testimony from John Campbell Region Banking President Wells Fargo & Company before the Senate Banking Committee, US Senate, November 13, 2008.
http://209.85.173.132/search?q=cache:9T7OYGczXtUJ:www.skadden.com/content/sitefiles/Skadden_516E686C6E64D167B93B68963977B4DC.pdf+TARP+Wells+Fargo+Three-Step+Refinancing&hl=en&ct=clnk&cd=3&gl=us&client=firefox-a

And the Well’s Fargo practice of “reverse redlining,” where the City of Baltimore has filed suit against the bank for preying on the poor.
http://www.msnbc.msn.com/id/22557579/

Financial engineering has gotten us into this mess to pad the pockets of the wealthiest. This practice is continuing with the 700 billion (and counting) bailout.

Kris Alman

Dec. 23, 2008, 12:48 p.m.

Baltimore’s lawsuit is gaining traction throughout the U.S. Most recently, Tennessee AG Bob Cooper took note of the work of attorneys, elected leaders and public officials in Memphis and Shelby County, who are considering a similar law suit. They would target multiple companies, including Countrywide, Ameriquest and Wachovia.
http://www.memphisdailynews.com/editorial/Article.aspx?id=39942

With an estimated loss of $34,199 per foreclosure to local government, Shelby County’s revenues have taken huge hits, with more than 58,000 home foreclosures since 2000. Officials in Memphis and Shelby County calculate a loss of almost $2 billion over the past eight years.

websmith

Dec. 23, 2008, 9:43 p.m.

There’s a lot that the Fed and the Treasury don’t want you to know and they hope that you don’t put the pieces together and discover that the $700 billion bailout is now passing $7 trillion.

http://ewebsmith.com/Finance/7trillion.html

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