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Letter


An Open Letter to the United States Congress: Demand Real Bailout Transparency!

December 8, 2008

Dear Member of Congress:

We, the undersigned advocates for open and accountable government, are writing to express our deep concern that the executive branch has provided no transparency into how taxpayer money is being spent and the decision-making process behind the financial bailout initiatives. We are also concerned that Congress has to date provided little oversight of these initiatives.

We applaud your decision to turn down the Treasury Department's request for a blank check, but nearly half of the $700 billion fund for the Troubled Assets Relief Program, or TARP, has already been distributed with very little transparency and almost no oversight. Recently, the public learned that an additional $800 billion is being spent by the Federal Reserve, which as an independent entity does not need congressional approval to lend money to banks or, in unusual and exigent circumstances, to other financial institutions. To date, the cumulative commitment of taxpayer dollars to financial rescue initiatives is estimated to be $8.5 trillion.

We urge you to use your oversight authority to make the financial bailout more accountable to the American public, and your legislative authority to make it more transparent. We ask that you work with Congressional leadership to ensure that there is effective legislative oversight over the entire program.

Any credible solution to the economic crisis must be grounded in transparency and to ensure full accountability must include best practice whistleblower protection for public and private employees connected to the bailout. As suggested in a recent opinion piece in Legal Times, "the best way to protect the interests of taxpayers is by ensuring that what is done is fully disclosed to the public." Currently, however, the Department of the Treasury has been slow to notify the public of bailout money dispersals and has neglected to require recipients of bailout money to disclose how the money is used. We request that you direct that all reports mandated by the Emergency Economic Stabilization Act of 2008 be made publicly available in a usable format, whether the law currently specifies public disclosure or not.

Under public disclosure laws, citizens can only gain access to information actually collected by the government. Therefore, public accountability necessitates that you enact changes in law to require the Department of the Treasury, the Federal Reserve, and any other government entities involved in the bailout, to begin collecting information on certain aspects of how bailout aid is spent by recipients, including:

  • all lobbying/business contracts for firms benefiting from bailout aid;
  • all lobbying/business contract details for firms servicing bailout transactions; and
  • any securities or other instruments used as collateral for loans through the Federal Reserve.

We urge that Treasury and the Federal Reserve, and any other government entities involved in the bailout, be required to make such information available to the public in a usable format.

Bipartisan language to improve transparency and strengthen oversight of the bailout already exists. We urge that, as Treasury has modified its strategy away from primarily purchasing troubled assets, the Special Inspector General for the Troubled Asset Relief Program (SIG-TARP) be directed to conduct oversight on areas of the Treasury's program not related to the purchase of troubled assets and that you grant the SIG-TARP the authority to set up an office and hire staff. Legislation by Senators McCaskill and Grassley would expand the SIG-TARP's authority to conduct oversight of the Treasury Department's actions and expedite its staffing process.

Additionally, the Accountability for Economic Rescue Assistance Act, introduced by Senators Feinstein and Snowe, would bring some welcome improvements to transparency and accountability in the bailout by banning the use of bailout money for lobbying and political contributions and requiring firms receiving bailout money provide publicly-available detailed reports outlining how federal funds have been used. The bill would also require the establishment of corporate governance standards to ensure that firms do not waste taxpayer money on lavish expenditures and penalties for firms that violate those standards.

We ask that you build on these existing proposals to strengthen oversight and require greater transparency to enact legislation in the taxpayer's interest, including best practice whistleblower protection for public and private employees connected with the bailout.

The public deserves vigorous, timely, and easily-accessible disclosure of all details surrounding any government decisions regarding financial market problems. We ask that you honor this by making sure that robust and effective oversight occurs and that all relevant records are collected and publicly available.

Sincerely*,

Patrice McDermott
OpenTheGovernment.org

Duane Parde
National Taxpayers Union

Mary Alice Baish
American Association of Law Libraries

David A Keene
American Conservative Union

Lynne Bradley
American Library Association

Tom DeWeese
American Policy Center

Tim Phillips
Americans for Prosperity

Grover Norquist
Americans for Tax Reform

Timothy Wise
Arlington County (VA) Taxpayers Association

Prudence S. Adler
Association of Research Libraries

Roy H. Stewart
Bedford Taxpayers Association
Granite State Taxpayers

Chip Pitts
Bill of Rights Defense Committee

Terry Francke
Californians Aware

Terrence Scanlon
Capital Research Center

J. Bradley Jansen
Center for Financial Privacy and Human Rights

Sandra Fabry
Center for Fiscal Accountability

Timothy H. Lee
Center for Individual Freedom

Mark R. Spengler
Center for Law and Social Strategy

Barbara Anderson
Citizens for Limited Taxation

Anne Weismann
Citizens for Responsibility and Ethics in Washington

Doug Bandow
Citizen Outreach Project

Bob Edgar
Common Cause

Matthew J. Brouillette
Commonwealth Foundation for Public Policy Alternatives

Thomas Schatz
Council for Citizens Against Government Waste

Sue Udry
Defending Dissent Foundation

John Richard
Essential Information

Amber Gunn
Evergreen Freedom Foundation

John Hallman
Florida Taxpayers Union

Conrad Martin
Fund for Constitutional Government

Mark Cohen
Government Accountability Project

Malia Zimmerman
Hawaii Reporter

Gary Wolfram
Hillsdale College

Jon Coupal
Howard Jarvis Taxpayers Association (CA)

John Tillman
Illinois Policy Institute

Jim Murtagh, MD
International Association of Whistleblowers

Karl Peterjohn
Kansas Taxpayers Network

Andrew Davis
Libertarian National Committee

David A. Brady
Libertarian Party of Illinois

T. Lee Horne III
Libertarian Party of Louisiana

Patrick Dixon
Libertarian Party of Texas

Michael D. Ostrolenk
Liberty Coalition

Mark R. Caramanica
Marion Brechner Citizen Access Project

Richard Falknor
Maryland Center-Right Coalition

Ellen Smith
Mine Safety and Health News

Howie Morgan
Mississippi Forward

James Landrith
The Multiracial Activist

Stephen M. Kohn
National Whistleblower Center

Charles N. Davis. Ph.D.
National Freedom of Information Coalition

Tom Blanton
National Security Archive

Doug Kagan
Nebraska Taxpayers for Freedom

Jerry Cantrell
New Jersey Taxpayers Association

Brandon Dutcher
Oklahoma Council of Public Affairs

Sean Moulton
OMB Watch

Larry Siems
PEN American Center

Susan Maret
Progressive Librarians Guild

Danielle Brian
Project on Government Oversight

David Arkush
Public Citizen

Don Racheter
Public Interest Institute

John Judge
Real Democracy Project

Lucy A. Dalglish
Reporters Committee for Freedom of the Press

William Westmiller
Republican Liberty Caucus

Paul Gessing
Rio Grande Foundation

John W. Whitehead
The Rutherford Institute

John Tsarpalas
Sam Adams Alliance

Samuel M. Slom
Small Business Hawaii

Dave Aeikens
Society of Professional Journalists

Douglas Newcomb, CAE
Special Libraries Association

Frances Brigham Johnson
Strategic Planning Initiatives

Ellen Miller
Sunlight Foundation

John K. Roberts
Taxpayers Union of Louisiana

Ben Cunningham
Tennessee Tax Revolt

Dane von Breichenruchardt
U.S. Bill of Rights Foundation

M. Royce Van Tassell
Utah Taxpayers Association

Toby Nixon
Washington Coalition for Open Government

Bill Will
Washington Newspaper Publishers Association

Rose Bogaert
Wayne County (MI) Taxpayers Association

Rafael DeGennaro
WhyCongressCantRead.com

*Organizations listed for identification purposes only