Regulatory oversight cannot be delayed

Wall Street Journal

Commentary

If Treasury Secretary Timothy Geithner requires more resources to complete the regulation to limit lobbying efforts, there should be many people available to work, given the high unemployment rate. Perhaps this delay is symptomatic of the neglect over the transparency and accountability of TARP money. If necessary, there should be no delay setting up a whole new bureaucracy, temporarily, to process this huge sum of money, and safeguard abuses at all levels.

Excerpts

A plan by Treasury Secretary Timothy Geithner to limit lobbyists' influence over the $700 billion bailout program has yet to get off the ground -- even as the program nears an end.

Just a few hours after being sworn in last January, Mr. Geithner promised to craft rules preventing external influence over bailout decisions. More than six months later -- and 100 days before the financial-industry bailout program is scheduled to stop taking applications for aid -- those rules have yet to be finalized.

Mr. Geithner's Treasury has disbursed $10.2 billion to various institutions since January, part of the more than $200 billion the government has funneled into the banking system. Several firms already have repaid more than a combined $70 billion, entering and exiting from the program before the adoption of rules aimed at curbing external influences.

Mr. Geithner told a government watchdog that "other issues had consumed Treasury's time and taken precedence over completing the guidance," according to a report released Aug. 6 by a special inspector general overseeing the government's bailout.

The Treasury, which didn't respond to requests for comment Friday, has largely been consumed with trying to respond to the financial crisis, operating at the outset with just Mr. Geithner and a skeleton crew of advisers.

The watchdog report said the Treasury was completing its draft policy limiting lobbyist communication with Treasury officials. It said the Treasury was waiting for the White House to finalize lobbying restrictions related to the $787 billion economic-stimulus program before issuing its bank-rescue guidelines.

The report noted that while available information gave "little indication" that special interests have influenced the government's bailout decisions, it said inconsistent record-keeping made it "impossible to examine the impact of all potential external inquiries" on the process.

When the Treasury announced its plans to curb bailout lobbying earlier this year, a spokeswoman said the department intended to publish weekly communication logs showing contact between public officials and external entities -- such as lobbyists -- discussing rescue plans for specific institutions. No such logs have been made available.