Financial Regulatory Forum

US Treasury bans lobbying on pending TARP requests

September 11, 2009

no_talking    WASHINGTON, Sept 10 (Reuters) – The U.S. Treasury on Thursday posted new lobbying restrictions to curb political influence on investments from the government’s $700 billion bailout program, prohibiting most communications once a funding application has been filed.
   The new rules, under development since January, allow Treasury officials to speak with registered lobbyists and other outside persons concerning general questions about the logistics and implementation of funding requests from the Troubled Asset Relief Program.
   But Treasury officials contacted about specific applications that are not logistical in nature must “immediately end the conversation,” according to guidance published on the Treasury’s website.
    The Treasury employees must report the incident immediately and the name of the lobbyist and other participants, along with a brief description of the conversation, will be posted on the Treasury website within three days, according to the guidance.
   In a set of frequently asked questions, the Treasury said once a company applies for funding, “its representatives cannot initiate communications with you (Treasury employees) orally about the merits of the application or proposal.”
   Communications from an outside party at a “widely attended” industry gathering are exempted from the ban but not private conversations that may occur at such a gathering.
   The Treasury has similar rules in place to curb political influence on tax matters.
   Since the bailout program was launched in October 2008, the Treasury has invested over $200 billion into more than 600 banks in its Capital Purchase Program, of which more than $70 billion has been repaid.
   It has put up over $80 billion in support for the auto industry and invested another $115 billion to prop up American International Group <AIG.N>, Citigroup <C.N> and Bank of America <BAC.N>.
   The special inspector general for the TARP program, Neil Barofsky, recently conducted a study that found no evidence that the Treasury’s TARP investments were unduly influenced by lobbyists or politicians, but he recommended that the controls over these decisions be improved. (Reporting by David Lawder; Editing by Kenneth Barry) ((rachelle.younglai@thomsonreuters.com; +1 202 898 8411)) Keywords: FINANCIAL/BAILOUT LOBBYING
  
Friday, 11 September 2009 01:11:53RTRS [nN10420373] {C}ENDS

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