Groups Launch Bailout Watch to Oversee Government Bailout Actions

OMB Watch and five other nonprofit organizations have collaborated to form a project called Bailout Watch. The project will research, investigate, and analyze the federal government's bailout activities and publish resources and data for policymakers, the media, and interested citizens.

The project will be conducted as a partnership with a number of groups, which will provide leadership on different aspects as dictated by their expertise. Coordinated by OMB Watch, the project also includes the Center for Economic and Policy Research, the Economic Policy Institute, OpentheGovernment.org, the Project on Government Oversight, and Taxpayers for Common Sense.

The goal of the Bailout Watch project is to identify specific data that should be disclosed (and made available in an online, indexed, searchable format), research and investigate government decision making processes related to the bailout, and provide analysis and commentary about the effectiveness of different bailout programs. The groups also hope to work closely with oversight bodies including the Special Inspector General for the Troubled Asset Relief Program (TARP), the Congressional Oversight Panel, and the Government Accountability Office. The initial focus of the project will be on TARP and its use of the $700 billion authorized by Congress, but it will also reach beyond TARP to include related financial bailouts.

Specifically, Bailout Watch will draw upon the expertise and resources of the partner organizations to fulfill three primary goals:

Identify specific data that should be disclosed: There has been much discussion about the way in which Treasury provides information about various bailouts. While dollar amounts have been disclosed, albeit late, the related data concerning items such as warrants, value and type of stock obtained, and transaction terms need to be disclosed. When necessary, the project will seek the advice of financial market experts to help identify the specific types of data that are needed for more useful analysis of the TARP program. The project will urge the Obama administration and congressional oversight bodies make such data available in useable, searchable formats. When the data is not available in such formats from the government, Bailout Watch partners will step in to make sure it is accessible.

Bailout Watch has started this process by drafting an initial list of government data [1] and information that should be disclosed to the public about the TARP program. The data memo was originally drafted by the Economic Policy Institute and was further developed by the Bailout Watch partner organizations. OMB Watch has shared this data memo with the Obama transition team, OMB officials, congressional leaders and oversight bodies, and other organizations working on bailout issues. A second memo is also being drafted, detailing other information that should be disclosed by institutions receiving TARP funding, including data on loans, executive compensation, dividend payments, and mortgage-related concerns.

Conduct research and investigations: Even if the Obama administration increases transparency and provides all the data being requested, there will be a need for further research and investigation to ensure against real and perceived conflicts of interest in the TARP program and to highlight any sweetheart deals involved in implementing TARP. This includes further research on institutions that receive money and on the contractors involved in the transactions. It also entails monitoring the implementation and oversight of bailout activities, including working closely with the government oversight bodies.

Taxpayers for Common Sense has begun part of this work by researching details about the institutions receiving TARP funds and publishing these details in bank/institution profiles available on its website [2].

Produce analysis and commentary: Ultimately, if Bailout Watch is successful in creating a more robust clearinghouse of information about the TARP program, including more information made public from the Obama administration and additional research and investigation by the Bailout Watch partner groups, it will be possible to provide public interest analysis and commentary on the government's actions. Questions this analysis and commentary would seek to answer include: Are these the right types of stock to purchase? Will there be a real chance that taxpayers will get their money back? How do the bailout activities impact federal deficits and debt? What purchases and investments by the government are the most beneficial to broad economic growth?

While the TARP program will be the first focus of Bailout Watch because of the poor state of transparency and disclosure of information about resources that have already been spent, there are many more areas of the government involved in bailout activities. By some estimates, the government has already allocated somewhere between $3 trillion and $7 trillion to bailout activities beyond the TARP program, including actions by the Federal Reserve, the Federal Deposit Insurance Corporation (FDIC) and other agencies and entities. Accordingly, as the project progresses, and to the extent possible, the scope of work will be expanded beyond TARP to include actions by the Federal Reserve (which is notorious for its lack of disclosure and not controlled by the incoming Obama administration), the FDIC, Fannie Mae and Freddie Mac, and other institutions involved in bailouts that may yet occur.