Bailout Managers May Be Buying Own Securities

[Purveyor]

(10-12) 07:28 PDT WASHINGTON, (AP) --

The government's plan to make sure private managers of a $700 billion bailout plan are free of conflicts of interest is weak, according to some critics, and allows too much room for abuse.

The Treasury Department is in the process of hiring financial experts to run the giant, taxpayer-financed fund, created by the legislation that President Bush signed on Oct. 3.

The law allows the department to offer contracts that are not governed by federal procurement regulations, but requires it to draw up conflict-of-interest guidelines.

Interim guidelines released last week require applicants to disclose "any actual or potential conflicts of interest" that may come into play. Applicants must submit a plan to show how they will "avoid, mitigate or neutralize" such conflicts.

While Treasury employees will oversee the plan, there does not appear to be anything in the rules that requires the government to make sure the applicants are being truthful.

"It basically says that these companies are responsible for disclosing their own conflicts of interest," said Laura Peterson, a senior policy analyst for Taxpayers for Common Sense, a private watchdog group. "And they are then responsible for coming up with a plan to fix them. Nowhere in there does it say Treasury will also be doing due diligence."

Treasury can waive the conflict-of-interest provision.

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AP: http://www.sfgate.com/cgi-bin/article.cgi?f=/n/a/2008/10/12/national/w060825D14.DTL

[cui bono]

1. THANK GOD IT PASSED!!!

:crazy:

[54anickel]

2. The house always wins with these jokers