Troubled Asset Relief Program

 

HAMP helps few homeowners, but program continues

The current tumult in the nation’s economy—high unemployment, large federal deficits, a downgrade in the U.S. credit rating and the resultant gyrations of stock prices—stem from the collapse of the housing bubble in 2007 and 2008 and subsequent meltdown of financial markets. While government programs enacted as part of the Emergency Economic Stabilization Act of 2008 propped up banks, brokerages and other firms—including auto manufacturers General Motors and Chrysler—the principal program to help homeowners has not fared nearly as well.

HAMP logo

In 2009, the Department of Treasury launched the Home Affordable Modification Program, or HAMP, to help ease the financial woes of three to four million Americans by adjusting mortgage rates to make their homes more affordable. The program provides an incentive to banks, giving them a predetermined amount for every modification completed. One of the goals of HAMP is to keep homes from being foreclosed upon, protecting local real estate markets from the declining prices that vacant, unsold homes can have on entire neighborhoods.

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This Week in Transparency - July 24, 2009

Here are some of the more interesting media mentions of Sunlight and our friends and allies over the past week:

CQ Weekly's Maura Reynolds wrote about the Obama administration's successes and failures in achieving its transparency goals six months into the term. Reynolds quoted Ellen Miller, Sunlight's director, about how many of their transparency initiatives are still in development and how the kinks are being worked out. "A default position that government data will be accessible to the public in machine-readable format is a huge step forward," Ellen said. "Is it moving as fast as I'd like? Of course not. But I can be patient while this unfolds." Ellen also commented on some of the administration's initiatives, such as "town hall" meetings, that have been tightly controlled. "There is real transparency, and then there is transparency theater,'' she said. "I can distinguish between the two." Reynolds wrote that the more people expect the Internet to deliver the information they want, the more kinds of information they will expect to access that way. "It's kind of a genie out of the bottle," Ellen said. "The Internet has raised expectations. I fundamentally believe that the way technology pushes information out to the edges will have a powerful effect on the power structure." Reynolds reports that open government advocates praise two federal Web sites, USAspending.gov, a site that tracks all federal spending and was set up as a result of a bill co-sponsored by then-Sen. Obama, and Data.gov, the site the new administration designed as a "one-stop shop for number crunchers that consolidates statistics across federal agencies in standard, machine-readable formats." The article quotes Gary Bass, director of OMB Watch, saying the sites could be vehicles for connecting government performance to spending. "From the point of view of the average user, there has been nothing like this before. That is truly a credit to this administration." Reynolds notes that it was OMB Watch's FedSpending.org that served as the technical platform for USAspending.gov.

Despite the existence of rules requiring congressional lawmakers to disclose earmarks they request, rules do not exist requiring them to disclose items classified as "program support." The Washington Post's Carol Leonnig illustrates this problem with a report on how $160 million intended to help Mexico's police buy U.S.-made first-responder radios was tucked into the voluminous congressional plan for U.S. military spending next year. Leonnig quotes Bill Allison, Sunlight's senior fellow, "It kind of makes a mockery of the disclosure requirements we have. They will disclose the little things, the $1 million projects, but when you have the big-ticket items, you don't have members willing to take responsibility for those."

Stephanie Condon, writing at CBS News' "Political Hotsheet" column, cited a report from Taxpayers for Common Sense that found that lawmakers serving on the the House Appropriations Subcommittee on Defense included 1,080 earmarks worth $2.7 billion dollars in the fiscal-year 2010 defense appropriations bill they approved last week. The lawmakers specifically requested more than $1.6 billion in earmarks for their campaign contributors, entities who had donated nearly $1 million to the committee members.

The Project on Government Oversight (POGO) and Taxpayers for Common Sense achieved a major victory when the Senate voted to halt production of the Air Force's top fighter jet, the F-22 Raptor, as reported by The Boston Globe. POGO called it a “landmark vote" that “marks the end of business as usual, and the beginning of real reform, in Washington." And Taxpayers termed it a “giant step for fiscal sanity (that) affirms the government’s ability to stop unneeded weapons programs even when they are firmly entrenched in the American industrial and congressional base."

Tom Hamburger and Peter Nicholas at The Los Angeles Times reported on Neil Barofsky, the special inspector general overseeing the Troubled Asset Relief Program, asked a simple question: What had the nation's banks done with all their bailout money? And the Treasury Department answered that they don't know. The Times reporters quoted Ellen crediting the Obama administration for making more government data public. She cited Data.gov as an example of a genuine attempt to put a wealth of government information on the Internet. But at the same time, Ellen said: "We don't see any radical changes from what we've seen in the past." The Chicago Tribune's "The Swamp" blog picked up the story, as did a number of other outlets across the country.

National Journal's Eliza Krigman reported on Cato's Jim Harper launching a contest at WashingtonWatch.com. The contest, supported by Sunlight, is meant to encourage citizens to contribute online to an earmark database to track how congressional lawmakers steer federal funds to special interests and projects in their districts. Krigman notes that the project is similar to Sunlight's Transparency Corps. Amanda Carpenter at The Washington Times, Ryan Singel at Wired's "Epicenter" blog and Nate Anderson at Ars Technica wrote about WashingtonWatch.com's earmark contest as well.

In their headlines for Monday, Democracy Now reported on a bipartisan group of centrist and conservative senators who called on Democratic and Republican leaders to put off a vote on health care reform legislation for 70 days. In the report they cite info from Paul Blumenthal's blog post on how each of these senators has raised at least $1 million from the health and insurance sectors combined over the course of their respective careers.

National Public Radio's Andrea Seabrook and Peter Overby, in a report the network broadcast on Wednesday afternoon's edition of "All Things Considered," asked the question, "Who has access to U.S. Sen. Max Baucus (Mont.), the chair of the Senate Finance Committee?" They highlight and link to the graphic produced by Paul and Kerry Mitchell, Sunlight's creative director, that traces health care lobbyists' ties to Baucus and other senators on the Finance Committee. They also interviewed Paul who said, "In Washington, relationships are part of the huge game of influence. If you don't have a relationship with someone on the Hill, then you aren't going to have the kind of access that you need for your client." And so, Paul said, these lobbyists — and their clients — have a unique brand of access to one man at the center of the health-care debate.

Anne Mulkern of Greenwire (subscription required) reported on an analysis conducted by the Center for Responsive Politics of a portion of lobbying disclosures for the second quarter of 2009 by energy companies, which show that electric utilities increased their expenditures, nearly catching up with oil and gas. While Congress debated and voted on the Cap and Trade Energy Conservation Bill, electric utilities spent $12 million, while oil and gas spent $13.9 million, attempting to influence the outcome. The New York Times republished Mulkern's piece.

The the Financial Times and Rolling Stone's Matt Taibbi have picked up LittleSis.org's profiling of Bob Hormats, Obama's pick to be under secretary of state for economic, energy, and agricultural affairs. Hormats, as vice chair of Goldman Sachs (International), has dubious ties to the genocidal regime in Sudan through a Chinese oil company.

Quinn Norton at the Irish Times highlights Transparency Corps in an article about how crowdsourcing can be an effective means of getting labor-intensive work done online. Norton quotes Clay extensively, “Right now we’re just trying to keep up with the users, which is a nice problem to have.” Clay said that next up will be a project from LittleSis.org.

TARP Recipient Banks Need to Disclose Political Giving

Today, the Center for Political Accountability (CPA), a non-partisan group working to create transparency and accountability with corporate political spending, announced that they are leading a nationwide shareholder initiative to address the lack of disclosure of certain kinds of political giving by banks receiving TARP money.

The initiative, supported by 23 shareholder advocates, is calling on 19  companies that received more than $1 billion in TARP funds to disclose and require board oversight of their political spending with corporate funds. Only three financial groups -- Prudential Financial Services, American Express and Capital One -- have agreed to do so. Bruce Freed, CPA’s executive director, said that, as a matter of course, banks should be open and above board with their political spending. This is especially true now that they have received huge amounts of bailout funds from the government. Unfortunately, many have resisted. “A safe and sound financial system must be based on transparency and accountability,” he said.

The CPA-lead initiative sent each bank a letter calling for disclosure of political spending (including soft money contributions and payments to trade associations and other tax exempt groups used for political purposes) to help rebuild shareholder and public trust in financial services institutions. Unfortunately, the banking industry has lagged behind other industries in adopting disclosure. As of mid February, CPA reports, more than 52 leading U.S. public companies, including more than one-third in the S&P 100, have disclosed political giving, including Merck, Dell, General Electric, Pfizer, Hewlett Packard, FirstEnergy, Procter & Gamble and Aetna.

The initiative sent letters to the following institutions: Bank of America, Citigroup, JPMorgan Chase, Wells Fargo, Goldman Sachs, PNC Financial Services, Regions Financial Corp, SunTrust Banks, Fifth Third Bancorp, BB&T, Bank of New York Mellon, KeyCorp, CIT Group, Comerica, State Street, Marshall & Ilsley, Northern Trust, Zions Bancorporation and Huntington Bancshares.

It’s outrageous that the Congress didn’t include a provision in the Emergency Economic Stabilization Act passed last fall that would require disclosure of this type of political spending. And it’s doubly outrageous that the banks are refusing to disclose as due course of receiving public funds.

A Transparent and Accountable Recovery

In the wake of the Troubled Asset Relief Program (TARP), and while Congress debates the massive stimulus bill,  the  Coalition for an Accountable Recovery was created to promote accountability for both federal government agencies doling out the trillions of dollars,  for the states and for the companies that benefit from recovery funds. The best way to assure taxpayers that the funds are being used responsibly is to provide "radical" transparency on stimulus spending and to make the details of the stimulus available in online, in real time.

No great surprise to here that the Coalition (of which Sunlight is a member)  is calling on Congress to require online reporting that allows the public to easily search, sort, track and download data on the use of recovery. Each state should be required to report on all funds they receive and all data should be presented in a uniform manner, making sure it is compatible with the USASpending.gov Web site. The Coalition has also state that   the newest technology should be applied to both the Recovery.gov Web site and USASpending.gov to make the information more accessible for everyone

Sunlight has joined the over 30  groups as part of the coalition, including the Center for Responsive Politics, Common Cause, National Institute for Money in State Politics, OMB Watch, OpenTheGovernment.org, Project on Government Oversight and Taxpayers for Commonsense.

Bailout Recipients Lobbying

From October 1, 2008 through the end of the year, eighteen companies that had received, or would receive, bailout funds spent money lobbying the government. As the bailout is set to move onto round two, there have been concerns that recipients of funds are improperly lobbying the government after receiving the funds. In the past week there has been an effort by Treasury Secretary Timothy Geithner to restrict lobbying of his department by bailout recipients and a bill introduced by Sens. Dianne Feinstein and Olympia Snowe to ban the use of bailout funds for political influence. Some good government groups are objecting to bailout recipient Bank of America's involvement in organizing opposition to the Employee Free Choice Act.

In total, the eighteen bailout recipients that continued to spend money on lobbying spent $14,810,259 over the three month period of October to December. Of course, many of these companies were lobbying on a variety of issues and did not necessarily spend the full amount listed on their disclosure to lobby on the bailout. All but two of the bailout contracts received by these companies came during the period of which this lobbying spending is the subject. Lobbying on the bailout was determined by whether the lobbyist disclosure forms listed one of the following in the Issue Area provided on the form: H.R. 1424, Emergency Economic Stabilization Act, TARP, and Troubled Asset Relief Program. One bailout recipient that continued to list lobbying expenses, American Internation Group (AIG), has publicly stated that they are no longer lobbying government. The report AIG filed indicates that the expenses were for:

In response to requests and to correct misinformation, AIG provided information about AIG to federal officials in connection with government efforts to address instability and liquidity in the financial markets and congressional oversight of federal programs including the Troubled Asset Relief Program.

Topping the list is the General Motors Corporation with lobbying expenses totalling $3,550,000. The financial arm of the General Motors family, GMAC, a bailout recipient, also spent $,1540,000 on lobbying expenses. Both of these bailout recipients obtained funds at the end of the lobbying disclosure quarter, after Congress rejected a bill granting non-TARP funds for them, suggesting that the majority of the lobbying was done in pursuit of the funds themselves. Four more companies also obtained their bailout funds in the waning days of the year (the end of the disclosure quarter) or in the new year. Those companies are American Express, Chrysler, CIT Group, and PNC Financial Services Group.

Below is the full table of bailout recipients, their lobbying expenses for the 4th quarter, and the first date upon which they were issued bailout funds.

Oct.-Dec. 2008 Lobbying by Bailout Recipients
Bailout Recipient Lobbying Expenses (Oct.-Dec. 2008) First receipt of bailout funds
American Express Company $1,080,000 1/9/09
American International Group $1,080,000 10/28/08
Bank of America $880,000 10/28/08
Chrysler LLC $1,356,589 1/2/09
CIT Group, Inc. $80,000 12/31/08
Citigroup $1,480,000 10/28/08
General Motors Corporation $3,550,000 12/29/08
GMAC LLC $1,540,000 12/29/08
Goldman Sachs & Co. $720,000 10/28/08
Huntington Bancshares, Inc. $43,670 11/14/08
J.P. Morgan Chase Bank $1,100,000 10/28/08
Morgan Stanley $610,000 10/28/08
PNC Financial Services Group $10,000 12/31/08
State Street Corporation $210,000 10/28/08
The Bank of New York Mellon $330,000 10/28/08
U.S. Bancorp $160,000 11/14/08
Wells Fargo & Co. $580,000 10/28/08