A Congressional Oversight Panel released a new report Thursday detailing the level of involvement of contractors in the government bailouts of financial institutions during, and after the financial crisis.
The report shows that Fannie Mae has almost triple the employees working on the financial bailout than the federal Treasury. "The vast majority of people working on the TARP today receive their paychecks from private companies, not the federal government," said panel chairman Sen. Ted Kaufman, D-Del.
Treasury has awarded nearly 100 different contracts, totalling nearly $450 million, with the two largest contractors being Fannie Mae and Freddie Mac, both of which were put under conservatorship in 2008. Fannie Mae is estimated to have contracts worth around $126 million, while Freddie Mac is contracted to the tune of $88 million. Both institutions received billions in the TARP bailouts and now received government assistance as contractor, which is a fact that may pose a conflict of interests, according to the report.
Others who also received billions under TARP and now act as TARP custodians under contract work include the Bank of New York Mellon and Morgan Stanley, which both hold multi-million dollar contracts with the government.
"Certain TARP recipients had a special status that should have disqualified them from acting as a financial advisor in relation to TARP funds," the report said. “The government contracting process is notoriously nontransparent, and although Treasury appears to have performed well on a comparative basis, significant transparency concerns remain."
