Sense on Cents

Senators Dianne Feinstein (D-CA) and Olympia Snowe (R-ME) proposed legislation earlier this year to create transparency in the distribution and use of TARP funds. From Feinstein’s own website:

Senators Feinstein and Snowe are the authors of bipartisan legislation, called the Troubled Asset Relief Program Transparency Reporting Act, which would promote transparency and establish strict accountability standards for firms receiving TARP funds. The bill was originally introduced during the 110th Congress on November 20, 2008, and was reintroduced with a new bill title for the 111th Congress on January 6, 2009.

“American taxpayers put hundreds of billions of dollars on the line to rescue financial institutions, but we still don’t know how this money is being spent,” said Senator Feinstein. “This lack of transparency is simply unacceptable. Taxpayers deserve better, and the time has come to restore confidence in this unprecedented effort. Clear restrictions must be imposed on firms receiving assistance. These include tougher reporting requirements, lobbying prohibitions, and a ban on lavish and unnecessary expenditures.”

“I was deeply disappointed with the lack of transparency in the distribution of the first half of the TARP, which forced taxpayers to foot the bill for acquisitions by firms that received financial assistance from the federal government,” said Senator Snowe.  “Mindful of recent lessons, this legislation includes the right safeguards to ensure taxpayer dollars will not used to subsidize K Street in Washington.”

Hat tip to RO for sharing the fact that Ms. Feinstein could use a dose of her own medicine.  Senator Feinstein and her husband have exposed themselves under the TARP while feeding from the trough. Feinstein’s husband, Richard Blum, may very well have engaged in insider trading in the process. The Washington Times reports:

On the day the new Congress convened this year, Sen. Dianne Feinstein introduced legislation to route $25 billion in taxpayer money to a government agency that had just awarded her husband’s real estate firm a lucrative contract to sell foreclosed properties at compensation rates higher than the industry norms.

Mrs. Feinstein’s intervention on behalf of the Federal Deposit Insurance Corp. was unusual: the California Democrat isn’t a member of the Senate Committee on Banking, Housing and Urban Affairs with jurisdiction over FDIC; and the agency is supposed to operate from money it raises from bank-paid insurance payments – not direct federal dollars.

Documents reviewed by The Washington Times show Mrs. Feinstein first offered Oct. 30 to help the FDIC secure money for its effort to stem the rise of home foreclosures. Her letter was sent just days before the agency determined that CB Richard Ellis Group (CBRE) – the commercial real estate firm that her husband Richard Blum heads as board chairman – had won the competitive bidding for a contract to sell foreclosed properties that FDIC had inherited from failed banks.

About the same time of the contract award, Mr. Blum’s private investment firm reported to the Securities and Exchange Commission that it and related affiliates had purchased more than 10 million new shares in CBRE. The shares were purchased for the going price of $3.77; CBRE’s stock closed Monday at $5.14.

While Senator Feinstein has responded in kind and disputes these allegations, the fact is the Washington Way is alive and well. Don’t expect an ethics investigation on this situation, but it deserves one.

LD

This entry was posted on Tuesday, April 28th, 2009 at 3:30 PM and is filed under TARP. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.