TITLE I - Authorizing the Treasury Department to Buy Mortgage-Related Assets
Sec. 4. Oversight. (36 Comments)
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EMERGENCY OVERSIGHT BOARD.
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ESTABLISHMENT.There is established the Emergency Oversight Board, which shall be responsible for
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reviewing the exercise of authority under a program developed in accordance with this Act, including
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all actions taken by the Secretary and the office created under section 2, including the appointment of financial agents, the designation of asset classes to be purchased, and plans for the structure of vehicles used to purchase troubled assets; and
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the effect of such actions in assisting American families in preserving home ownership, stabilizing financial markets, and protecting taxpayers; and
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making recommendations, as appropriate, to the Secretary regarding use of the authority under this Act.
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MEMBERSHIP.The Emergency Oversight Board shall be comprised of
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the Chairman of the Board of Governors of the Federal Reserve System, who shall serve as the chairperson of the Emergency Oversight Board;
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the chairperson of the Board of Directors of the Federal Deposit Insurance Corporation;
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the chairperson of the Securities and Exchange Commission;
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one member who is not a government employee, having appropriate financial expertise in both the public and private sectors, appointed jointly by the Majority leadership of the Senate and the House of Representatives; and
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one member who is not a government employee, having appropriate financial expertise in both the public and private sectors, appointed jointly by the Minority leadership of the Senate and the House of Representatives.
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MEETINGS.The Emergency Oversight Board shall meet 2 weeks after the first exercise of the purchase authority of the Secretary under this Act and monthly thereafter.
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CREDIT REVIEW COMMITTEE.The Emergency Oversight Board may appoint a credit review committee for the purpose of evaluating the exercise of the purchase authority provided under and the assets acquired through such exercise, as the Oversight Board determines appropriate, and the employees of such credit review committee shall be employees of the Federal Government.
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COSTS.The costs of the Emergency Oversight Board and a credit review committee appointed by the Emergency Oversight Board shall be reimbursed by the Secretary.
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REPORTS BY THE SECRETARY.
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MONTHLY REPORTS TO CONGRESS.Not later than one month after the date of the first exercise of the authority granted in section 2(a)(2), and monthly thereafter, the Secretary shall provide to the Committee on Banking, Housing, and Urban Affairs, the Committee on the Budget, and the Committee on Finance of the Senate and the Committee on Financial Services, the Committee on the Budget, and the Committee on Ways and Means of the House of Representatives a written explanation of the overall actions taken by the Secretary during the reporting period and a detailed financial statement with respect to the exercise of authority under this Act, including
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all agreements made or renewed;
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all transactions occurring during the month, including the parties involved;
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the nature of the assets purchased;
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all projected costs and liabilities;
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operating expenses, including compensation for financial agents;
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the valuation method used for each transaction; and
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a description of the vehicles established to exercise such authority.
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WEEKLY PUBLIC REPORTS.On a weekly basis, every Friday, the Secretary shall make public the total value of assets held and the total amount of assets purchased and sold during that week under the authority of this Act.
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36 comments on Sec. 4. Oversight.
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Unless the Emergency Oversight Committee has actual authority over the Secretary (that is, unless the Secretary is required by law to obey the Committee), then "oversight" is in name only. I don't see that power defined here.
posted by Kay Hagan, US citizen and taxpayer at September 22, 2008
The Committee should meet weekly. This is a fast-moving crisis (so they claim).
The Weekly Public Reports should itemize the assets held and purchased, not just the total value. -
Kay Hagan-
posted by Mithras Invicti, mithras.blogs.com at September 22, 2008
I disagree with your comment about the EOC. It is being set up as Congress' eyes and ears to watch what Treasury is doing. It's Congress that's actually exercising authority and control over the program. Also, just because a committee only meets once a month doesn't mean it does nothing else in the meantime - its staff is always working, which supplies Congress with a continuous stream of information.
I agree 100% with your comment on the weekly public reports. Moreover, the reports must be available online and in a format (i.e., excel) that will easily allow analysis by third parties. -
I strongly agree that the oversight and specific authority should be spelled out and the weekly report is a great idea
posted by Joni Wamer at September 22, 2008 -
Kay Hagan:
posted by Joe Klein's conscience at September 22, 2008
Are you the same Kay Hagan running against Liddy Dole? -
Re. Kay Hagen's: "then 'oversight' is in name only. I don't see that power defined here."
posted by Eric Zuesse at September 22, 2008
As I understand this legislation, the function of the Oversight Board is purely advisory; the Secretary alone is responsible to Congress; the function of the Oversight Board is solely to assist the Secretary. -
All actions by the Secretary under this act shall be approved by a majority of the oversight committee which shall include both non-govt members appointed by the Congress.
posted by dblevins, private citizen at September 22, 2008 -
Section 4(b)3 should be added to provide for all reports to be provided online within 48 hours to the general public at no cost.
posted by Aldon Hynes at September 22, 2008 -
4(b)2 should be amended to any work day except Friday, since releasing news on Friday is a classic tactic employed when you wish to minimize press scrutiny.
posted by Jon Wiley at September 22, 2008 -
I agree this isn't an oversight board as we usually understand it, since it has no powers other than advising and making reports.
posted by Prof. Michael Froomkin, U.Miami School of Law at September 23, 2008
It's important to note, however, that so long as the board -- whatever you call it -- has members appointed directly by members of Congress, then the separation of powers (as repeatedly and forcefully enunciated by the Supreme Court) excludes the board from the exercise of ANY executive power.
(If you want a body that can do more than study and recommend, all members must be appointed by the President, or maybe by the Secretary.) -
We need more people on this committee. Not just bipartisan people but respected scholars like Jack Guttentag and Scott Wheelan.
posted by Mr. Chen at September 23, 2008 -
ba-ba booey!!!
posted by gary at September 23, 2008 -
Prof. Froomkin-
posted by Mithras Invicti, blog Fables of the Reconstruction at September 23, 2008
Thank you for that explanation of separation of powers. One quibble: You imply that an oversight board usually would have the power to direct a program. Is that true? The House Committee on Oversight and Government Reform simply investigates, advises and makes reports, for example:
http://oversight.house.gov/about/ -
Sounds like the "Emergency Oversight Committee" does NOT do any "oversight" or supervision.... maybe "review" is a better word?
posted by Anonymous at September 23, 2008 -
Life imprisonment for "Shock Doctrine" vultures (or at least seizure of all their assets and their income limited to minimum wage for the rest of their lives).
posted by Anonymous at September 23, 2008 -
The oversight board should include more elected officials who are accountable to the public. The board should also have plenary authority to bring decisions of the Secretary to a vote in both houses of Congress.
posted by Dennis McShane, taxpayer at September 23, 2008
Oversight is paramount in these decisions. The lack of oversight and regulation was the major cause of this debacle in the first place. -
After reading Prof. Froomkin's comment, I realize the error in my first comment. The Board must be appointed by the President in order to not violate the separation of powers.
posted by Dennis McShane, taxpayer at September 23, 2008 -
This "oversight" board is meaningless moneywasting drivel. It merely reports its findings to the official who was responsible in the first place. There is no power to correct, chastise, compensate or remediate any errors or corruption discovered (and with this Administration, we can virtually be assured of corruption). The Board must either have power over the Secretary, or report directly to Congress at ANY TIME to demand corrections or redress. After seven years of incompetence at the helm, we would be fools to let any member of this Administration out of the house without a nanny.
posted by Cathubodua Ygerna (Private Citizen) at September 23, 2008 -
The EOC can report at any time to Congress if action is needed to stop the Secretary from pursuing an unwise course of action. Two of the EOC members are appointed by Congress.
posted by Mithras Invicti, blog Fables of the Reconstruction at September 23, 2008 -
I don't see what effect the oversight committee can have if it's power's are not defined. It should have veto power over any purchase of assets, loans, etc., including retroactive veto power on already cleared transactions.
posted by Jonathan McAfee at September 23, 2008
Also, this Oversight Committee does not have any public advocates. I think atleast 2 congressional elected taxpayer advocates, whom do not have ties to the financial industry or government, need to be added to that board. -
It seems that any real oversight is meaningless unless congress is easily able to withdraw the power to control the funds from the executive should they be used abusively (or in a non-transparent manner). This would compel good behavior on the part of both the banks (who would be terrified of the instability should the proposed system be halted) and the Bush (and potentially McCain) administration. This bill's version of "oversight" seems quaint. It reminds me of a time when members of the executive branch at least pretended that they were required to answer Congress' questions...
posted by Geoffrey Hughes (Private Citizen) at September 23, 2008 -
It is technologically feasible that any banks can and should automatically report key indicators to the Treasury and to the Emergency Oversight Committee via automated data feeds including RSS and KML. In an era where all economies are linked and subject to rapid volatility, as we've seen in recent weeks, we need more frequent recording. Happily, as the District of Columbia has shown under Mayor Fenty, the same data feeds can be used internally to improve the banks' performance, making it a win-win proposition. I wrote a longer explanation of the approach at http://tinyurl.com/3tzs4n
posted by W. David Stephenson, Stephenson Strategies at September 24, 2008 -
This Section is a sham. A fig leaf. It does not provide "oversight" in any meaningful sense.
posted by anonymous lawyer at September 25, 2008
This "EOC" receives "reports" and "reviews" them? Please. Under Section 8, individual actions by the Secretary with respect to assets are explicitly *not* "reviewable" in the sense that they could be effectively challenged or rescinded.
When this Section says "review" it means "read" or "look at" or "become aware of". Which is better than the entire thing being an utter Black Box I suppose, but it does nothing to restrain the power of the Secretary in disposing of our $700,000,000,000.
Basically, it will allow Congress to hold hearings and -- in front of television cameras -- howl and moan and complain about this that action taken, all the while hoping people won't notice that the time for actually doing something about the action complained of was... NOW.
Note that the Secretary, under Section 2, has the authority to create regulations governing all of these activities. He could very simply make a regulation requiring confidentiality of all reports to Congress. Which would mean that the only public information would be the very bare bones public "reports" required by (b)(2), which is basically A TWO-LINE BALANCE SHEET.
This is what Congress will call "transparency" and "oversight" when they emerge from their "negotiations" to try to sell this thing to taxpayers. -
Who better to monitor progress than the same rating agencies that downgraded Enron the day after they filed for bankruptcy.
posted by Lets Lerave It To Moodys Rating Service .. at September 25, 2008
How did they do with these investment banks .. oh yeah, they are the investment banks.
Heck of a job there Ernie!
The best monitors you will find will not be from wall street. try a couple of homeless guys sleeping in the bus station. At least they will have common sense and a tad of street savvy. -
Have no one in either house/senate that has accepted monies from any of this inst. allowed any voice in selection of the oversite committee members.
posted by Sandi at September 26, 2008
It is already been illustrated they can be bought, let's not make the bailout just another bought project. -
The oversight committe is only going to have five people? This is 700 billion dollars we are talking. That means only three people are needed to win a vote of action. That is no good business practice and I can not believe this is happening.
posted by Rbird39 at September 26, 2008 -
Right now what we do not need is another worthless committee.What we do need is for everyone to stop all this the world is ending stuff and for all to step back take a huge breath and start focusing on the most economical way to get out of this mess. We will survive our system has overcome worse than this.So lets all focus on preventing another friday surprise and then just maybe by monday the sun will shine some light on this that we can all understand . Oh by the way we do need to prosecute all who are found to have been guilty of fraud in this mess.
posted by JLINC44 at September 26, 2008 -
I'm no scholor on the subject, but my hayseed education does not get the constitutionality of having the Secretary of the Treasury taking over taxpayer money for private uses. Does anybody in Congress care anymore about the separation of powers? At this rate, these bailouts will not stop until Congress has given up its entire purse strings to to the executive branch. Why would oversight by a little unelected committee made up of all the fingers in the pot be credible? All monies have to go through Congress period, with complete reporting to the Government Accounting Office.
posted by Thalia's bark at September 27, 2008 -
All money realised from the sale of assets must be returned to the taxpayers and NONE of it to any other organization unless and until 125% of the original sum shall have been repaid.
posted by beebop at September 27, 2008 -
Every government degenerates when trusted to the rulers of the people alone. The people themselves are its only safe depositories.
posted by brass monkey at September 27, 2008
Thomas Jefferson -
2. MEMBERSHIP.The Emergency Oversight Board shall be comprised of"
posted by Brian Hitchcock at September 28, 2008
s/b "...shall comprise"
or "...shall be composed of" -
I totally agree with all of Kathy Hagen's points. I still believe the Secretary has way too much power.
posted by Craig Bryant, Citizen at September 28, 2008 -
As far as meeting and release days. Meeting and release days should be MONDAY first thing. If we invest? 700 Billion is not a small thing. That way the have current reports from the previous week and we have a way to see how we are doing and voice any issues. Also yes EXCEL should be the way that it is released on MONDAY. Along with their report not a whole lot to ask don't you think?
posted by Chris in Phoenix at September 28, 2008 -
I say no bailout. The only message anyone gets from this is if you are big money, you can do anything you want because the government will step in and bail you out. What about what the people want? I thought majority ruled. Oops, my bad, I guess this has become a dictatorship.
posted by Anonymous at September 28, 2008 -
Revolution.
posted by Robin E. S. Kovzelove at September 28, 2008 -
Interesting that the majority of the people sitting on the oversight committee are the same people who sat by as our financial infrastructure imploded.
posted by Anonymous at September 28, 2008 -
The American people need preemptive oversight and strong foresight
posted by C.M. at October 12, 2008
in spending taxpayer money wisely, not the weak aftersight described here.