Why Should We be Surprised? (Yves Smith)

by Dollars & Sense

We noticed the article in today's NY Times that the GAO will be releasing the first audit of the TARP program. Here is what Yves Smith of Naked Capitalism has to say about it:

The New York Times reports that the General Accounting Office is readying to issue a report that will criticize how Treasury has handled its spending under the $700 billion TARP program. The main shortcomings are failure to track how the money is actually being used and inadequate controls to prevent conflicts of interest.

Gee, I thought of those supposed failings as features rather than bugs.

Here's what the Times had to say:

The first operational audit of the $700 billion financial rescue plan, to be delivered to Congress next Tuesday, is expected to be critical of the Treasury Department’s failure to set up ways to track how its bailout money is being used in the marketplace, according to people briefed on a draft of the report.

The audit, done by the Government Accountability Office, is also likely to call for tighter controls over the conflicts of interest that are arising as financial specialists, institutions and law firms are hired for Treasury work that could later aid their private-sector clients, said these people, who would speak only on condition of anonymity because the briefings were confidential.

But the overall assessment was “a mixed bag,” as one person put it. It was clear, he said, that the auditors took into account how quickly the program was carried out, how much its focus shifted over time and how little feedback Treasury has had from oversight agencies so far.

Read the rest of the article.

Labels: bailout, financial crisis, GAO, Naked Capitalism, TARP program, Yves Smith

 

11/26/2008 04:08:00 PM 0 comments links to this post

 

John Miller on the Radio

by Dollars & Sense

Economist and Dollars & Sense columnist John Miller is on the radio--on the program Justice or Just Us? on KUCI in Irvine, Calif. He's talking about the recent GAO report showing that many corporations pay no taxes at all in the United States.

John's latest Up Against the Wall Street Journal column, just posted to the D&S website, is on cap-and-trade programs: "For the Wall Street Journal's editors, fear of a bigger government outweighs the fear of a warmer planet."

Labels: cap-and-trade, corporate taxes, GAO, John Miller, Wall Street Journal

 

8/14/2008 10:36:00 AM 0 comments links to this post

 

Companies Get $100 Million In SBA Contracts They Don't Deserve

by Dollars & Sense

According to the Washington Post, a new GAO report identifies over $100 million in Small Business Administration contracts that have improperly been given to businesses falsely claiming to be located in economically distressed zones.

Usually the businesses just set up a fake storefront in the zone, even if their real operations are thousands of miles away. However, the GAO submitted several test applications with completely bogus information, some listing a Starbucks shop for the main company address. Several of these contracts were approved.

According to the article:

SBA officials said they would work on their internal systems to improve the verification process. Last year, administration officials quashed legislation that would have required on-site visits of applicants and other measures to ensure businesses' eligibility, calling them "burdensome or undesirable."

Incompetence and fraud at the SBA is nothing new under the Bush Administration. For a catalog of similar shenanigans from 2002-2005, see Christopher Moraff's The Incredibly Shrinking Company from our Jan/Feb 2006 issue.

Labels: Christopher Moraff, Corporate Fraud, GAO, SBA

 

7/18/2008 03:16:00 PM 0 comments links to this post