WASHINGTON — Less than a month after its first report, a congressional panel overseeing the Treasury Department's $700 billion financial bailout is demanding more answers.
The panel's first report, released Dec. 10, included questions about how banks are spending taxpayer money, how the money will combat the rising tide of home foreclosures and Treasury's overall strategy for the rescue.
But Treasury's Dec. 30 response "did not provide complete answers to several of the questions and failed to address a number of the questions at all," said the panel's second report, released Friday.
The new document cites an Associated Press investigation that found none of the banks were willing to disclose what they were doing with hundreds of billions of dollars distributed through direct injections of federal money.
"For Treasury to advance funds to these institutions without requiring more transparency further erodes the very confidence Treasury seeks to restore," the new report says.
The Congressional Oversight Panel is one of the few means of accountability provided under the bailout legislation. It is chaired by Harvard law professor Elizabeth Warren and includes Rep. Jeb Hensarling, R-Texas, and former Sen. John Sununu, R-N.H.
Its second report opens with a note of frustration over Treasury's failure to respond to specific questions posed in the Dec. 10 memo.
Although the panel is engaged in its own research, it says, that "does not eliminate the need for Treasury to respond to the Panel's questions."
Most of the report is a grid detailing why better responses to some unanswered questions are "essential" and why Treasury's earlier responses were insufficient.
"Treasury has still not explained precisely what it sees as the problem," reads one assessment of a response deemed inadequate.
At several points, the report tartly explains the meanings of simple terms such as "strategy" and "oversight."
Referring to a question of why Treasury has required Citigroup, but not other firms that got money, to modify mortgages, the report says: "Treasury's refusal to answer this question is one of the most troubling aspects of their letter. The panel intends to do more fact finding on this matter."
Line after line of the column marked "Treasury Response" says simply, "No response."
The panel repeatedly states its reluctance to take Treasury's reassurances at face value.
"Treasury may be 'confident' that it is 'pursuing the right strategy to stabilize the financial system and support the flow of credit to our economy,' but once again, the function of oversight is to evaluate that claim," the report reads. "The question remains unanswered."
The panel's next official action will be a public hearing here on Jan. 14.