Wednesday, October 22, 2008

More Bailout Contracts Contain Blacked Out Portions

The Treasury Department has hired two big accounting firms to help keep tabs on the government's financial-industry rescue program, and once again certain basic elements of the deals are shrouded in secrecy.

PricewaterhouseCoopers LLP will provide internal controls for the government's $700 billion bailout fund. Ernst & Young will provide general accounting and consulting. The Treasury Department said the first phase of the three-year contracts will be worth $191,469.27 and $492.006.95, respectively.

That sort of specific detail is lacking in the agreements themselves. The Pricewaterhouse Coopers contract released by the Treasury Department on Tuesday has blacked-out text in the area covering the firm's bid, and also conceals the name of the PricewaterhouseCoopers partner who signed the deal.

Another section listing the names of the PricewaterhouseCoopers employees designated to work on the contract also is blacked out.

The Treasury Department said it contacted 12 accounting firms about the contracts, and received six bids for each of the engagements.

BailoutSleuth believes that transparency is vital to the success of the taxpayer-funded bailout program. The $700 billion allocated for the Troubled Asset Relief Program translates to roughly $2,300 for every man, woman and child in America.

The contracts between the Treasury Department and PricewaterhouseCoopers and Ernst & Young have extensive language covering potential conflicts of interest. They include a provision allowing the firms to beg off certain assignments if they think the conflicts are too great.

PricewaterhouseCoopers and Ernst & Young have connections to at least two companies whose troubles helped ignite the financial crisis.
read more