Just yesterday, I was posting about restricting TARP firms from using funds for political influence. Today, Treasury Secretary Tim Geithner went a step further and placed restrictions on the lobbying of Treasury Department employees by recipients receiving TARP funds. According to the AP:
Treasury’s new rules restrict the contact officials can have with lobbyists in connection with applications for funds from the bailout program. The new restrictions are modeled on the limits that are imposed on political lobbying of Treasury Department officials on tax matters.
In making required reports to Congress on the operation of the $700 billion rescue program, officials will have to certify that each investment decision was based only on objective criteria and the facts of each case.
The rescue program will be required to publish a detailed description of the review process conducted in making the awards, and no bank will be considered for an award unless it was recommended for the assistance by the firm’s primary regulator.
The new rules come in the wake of fresh lobbying reports filed with the government showing some big banks stepped up their lobbying efforts late last year even as they received billions of dollars from the bailout program.
This is a very important step in the process of making TARP and any other bailout free from the ordinary process of influence in Washington. The Feinstein-Snowe bill (S. 133) still remains important, as TARP recipients could still lobby other agencies, the White House, or Congress with TARP funds.
Here’s a link to the actual Press Release from Treasury.