Strike Two: Not only did President Obama fail to open the Ledbetter Act for public comment before he signed it, a violation of his pledge to boost transparency, but now his administration is refusing to release information on billion-dollar loan guarantees made to some of America’s largest banks.
Bloomberg News, which is suing the government to obtain a variety of bailout-related information, reports:
Bloomberg News asked the Treasury Department Jan. 26 to disclose what securities it backed over the past two months in a second round of actions to prop up Bank of America Corp. and Citigroup Inc. Department spokeswoman Stephanie Cutter said Jan. 27 she would seek an answer. None had been provided by the close of business yesterday.
As Congress debates an $875 billion economic stimulus bill, the guarantees represent a less publicized commitment. The public’s stake has grown along with assurances tying the Treasury to the fate of corporate loans and securities backed by home mortgages, car loans and credit card debt.
Two of the guarantees, made to Citigroup and Bank of America, cover $301 billion and $118 billion in assets, respectively. If the banks lose money on those assets, past a certain point, taxpayer will be forced to pick up the expense. The problem is that the Obama Administration, and the Treasury in particular, refuse to say what assets have been guaranteed.
So Americans are in the dark about how exactly the government is responding to the financial crisis–even though we may be left holding the bag.