White House Helps Banks Skirt Rules

Ready your pitchfork: While all of the major banks benefiting from the $700 billion bailout package rescue package have already submitted records of ownership and executive pay, the Treasury has created special entities for new firms to evade congressional restrictions. The administration is setting up middlemen that channel bailout funds to companies in an effort to increase participation from firms. Treasury officials say they are doing this because Congress’ harsh limitations on the bailout may have dissuaded some firms from participating. There’s been little protest on the Hill, but the Chairman of the Oversight Committee says he believes that any company benefiting from the bailout money should be subject to the same congressional restrictions, and legal experts say this strategy to bypass congressional restrictions may be unlawful. Said a former Justice Department Attorney of the government: "They are basically trying to launder the money to avoid complying with the plain language of the law.”