Since the passage of the Emergency Economic Stabilization Act of 2008 authorized the $700 billion bailout of the financial sector there has been a consistent refrain from critics that the program is shrouded in secrecy and only nods and winks at the notion of transparency. Just see my colleague Anupama Narayanswamy's attempts to figure out who is running the program -- known as the Troubled Asset Relief Program (TARP).

A trio of senators are trying to change that by mandating a bit of transparency for the TARP program. Sens. Mark Warner, Mel Martinez, and Sherrod Brown introduced the TARP Transparency Act today. Here's the details:

The TARP Transparency Act directs the U.S. Department of the Treasury to more aggressively compile and disclose how TARP funds have been used – information that currently is submitted in a variety of formats to several federal agencies – for review by the TARP Inspector General, the Congressional Oversight Panel and the public.

The TARP Transparency Act will allow regulators and Congress to use a single database, in a standardized format, to provide a more complete picture of the actions of TARP fund recipients and contractors.  The information could be collected and disseminated in near real-time, enhancing its value as a regulatory audit tool and also as a preventative oversight tool.

This sounds like a great idea. It does remind me that Treasury promised to do something similar through their FinancialStability.gov site, but has so far failed to do so. A legislative mandate, with stronger disclosure provisions, would be useful in getting information about this oft opaque program.

You can read the actual bill text on Sen. Warner's blog (where he uses Scribd to embed a pdf of the bill).

I think that Fed chairman Ben Bernanke spoke for all Americans when he testified yesterday that the one thing that has angered him the most during our current economic crisis is the ongoing bailout of A.I.G. So far, A.I.G. has received approximately $186 billion from the U.S. government in a bailout to protect the insurance giant's huge losses. But, as Josh Marshall noted over the weekend, the bailout of A.I.G. isn’t really a bailout of A.I.G., but a bailout of the counterparties that had insurance policies to back up their mortgage-backed securities (now known as toxic assets).

Despite the knowledge that the bailout of A.I.G. is, in fact, a bailout of counterparties, A.I.G. and the Federal Reserve refuse to disclose the identities of the counterparties. In a Senate Budget Committee hearing yesterday, Sen. Ron Wyden berated Fed Chairman Ben Bernanke about the failure to release the names of the counterparties, the actual bailout recipients. Bernanke stated that “under normal conditions” the counterparties would “have a presumption of privacy”. As the New York Times' Joe Nocera put it two days ago,

“Gobs of tax money is going to bail out unnamed companies — and yet we aren’t allowed to know who they are, and are supposed to take it all on faith. You know those awful cases you read about every once in a while where a child dies in a troubled home — and then the state health department won’t divulge any information out of “privacy concerns”? This strikes me as the financial equivalent of those cases. As excuses go, it sure is convenient.”

It truly does not make sense that the taxpayers need to be left in the dark about whom we are bailing out. Representative government requires that our representatives and us little people know what we are spending our money on, particularly if that money is meant to prop up the bad decisions of private enterprise.

In conjunction with this transparency problem comes word that A.I.G. is paying two Washington spin machines, Hill & Knowlton and Burston Marsteller, to do positive PR for the belly-up company.

A.I.G. probably needs a spin army after the way they operated outside of regulations and oversight, essentially running a scam insurance business that could collapse numerous foreign banks. I'm just curious as to how a company that is nearly wholly owned by the U.S. government can pay for expensive PR firms.

While there's much room for improvement, the 110th Congress has made a stab at providing a few rays of Sunlight into the mercenary culture of Washington. For example, in 2008, for the first time, federally registered lobbyists are required to file a new disclosure, called an LD-203, listing the contributions they make to federal candidates, among other things. Those disclosures have been released to the public, but in a form that's so garbled that contributions are double, triple, quadruple counted or more. My colleague Anupama Narayanswamy painstakingly reviewed 107,000 records, finding the 14,000 individual contributions to federal candidates, and adding up who's benefited the most from the personal checks of individual lobbyists. The headline above tells you that; read the rest here.