Yesterday the Government Accountability Office, which is responsible for overseeing wasteful spending in the federal government, issued a 66 page report (see the summary here, with link to the full report) concluding that the Treasury Department and Congress have not done enough to prevent waste, fraud and abuse in the $700 Billion bailout bill passed in October:
“Treasury has yet to address a number of critical issues, including determining how it will ensure that CPP is achieving its intended goals and monitoring compliance with limitations on executive compensation and dividend payments. Moreover, further actions are needed to formalize transition planning efforts and establish an effective management structure and an essential system of internal control. To help ensure the program’s integrity, accountability, and transparency“
Although this report does not recommend specific legislative proposals, the best thing that Congress could do to stem financial misconduct and waste is simple…protect whistleblowers.
In September, the National Whistleblowers Center joined with over 200 other public interest organizations in calling for Congress to include whistleblower protections in the bailout legislation. Yet, Congress failed to act.
The GAO calls for several reforms in the administration of the Troubled Asset Relief Program (TARP) — which is responsible for doling out the billions — but whistleblower protection should be the centerpiece of any reform package, as it is a necessary prerequisite for these reforms to work. Without protecting the whistleblowers who report misconduct, other reforms are doomed to fail. Two recent studies, one by PriceWaterhouseCooper, the internationally respected auditing agency, and another by the University of Chicago, both found that whistleblowers are the #1 way to ferret out corporate fraud.
Also ABC News ran this story on the need for corporate whistleblower protection in the wake of the bailout.
Let’s not forget that it was corporate greed and lack of oversight that got us into this financial mess, and that is precisely why Congress, the administration (and the next administration) should take decisive action, now.