Watchdogs: Treasury Falling Flat On Internal Controls For Bailout

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Watchdogs Chide Treasury on Bailout

By MICHAEL R. CRITTENDEN


WASHINGTON -- U.S. Treasury Department assurances that the $700 billion financial rescue plan is helping to stabilize markets aren't enough for a program that has been implemented with few internal controls, a pair of government watchdogs said Wednesday.

In separate testimony, the Government Accountability Office and a congressional oversight panel said Treasury has doled out billions of dollars to banks with no way to ensure they comply with government-mandated restrictions, or they are using the money to help increase the availability of credit to consumers.

The four-person oversight panel, in its first report to Congress, said it found Treasury has "administrated the without seeking to monitor the use of funds provided to specific financial institutions." (Read the full oversight panel report)

"Treasury cannot simply trust that the financial institutions will act in the desired ways; it must verify," the 38-page report said.

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