-Senators Will Reintroduce Bill to Crack Down on Lavish Corporate Expenditures, Mandate Public Reporting Requirements and Ban Lobbying By Firms Receiving Federal Assistance-
Dec 23 2008
WASHINGTON, DC – U.S. Senators Dianne Feinstein (D-Calif.) and Olympia Snowe (R-Maine) today said they will reintroduce a bill that would force companies receiving financial lifelines from the federal government to publicly report how they spend taxpayer dollars.
The Accountability for Economic Assistance Act, introduced on November 19, would ban companies receiving funds from the Troubled Asset Recovery Program (TARP) from using that money to lobby Congress, make political contributions, or pay for lavish or unnecessary expenses. The increased accountability standards would also apply to companies that receive emergency loans from the Federal Reserve.
“I have been profoundly disappointed by the absence of transparency regarding the use of $350 billion in bailout funds by the firms participating in Treasury’s rescue program,” said Senator Feinstein. “At present, we don’t know whether these companies are using these funds to fly on private jets, attend lavish conferences or lobby Congress. This bill puts clear restrictions on how funds can be used and mandates public reporting requirements to allow taxpayers to find out how their money is being spent. I believe we need to pass it and make it the law of the land.”
“As the federal government continues with its efforts to rescue the struggling economy we must insist on the highest level of transparency and accountability in the use of taxpayer dollars,” Senator Snowe said. “With this legislation, we can ensure that American taxpayers are not going to be forced to subsidize lobbying in Washington.”
Senators Feinstein and Snowe introduced the bill in November but it was not taken up by the Senate. They plan to reintroduce it on the first day that Congress reconvenes in January.
The legislation, called the Accountability for Economic Assistance Act (S.3698), would:
- Prohibit firms receiving economic assistance from Treasury or emergency loans from the Federal Reserve from using such funds for lobbying expenditures or political contributions;
- Require that firms receiving assistance provide detailed, publically available quarterly reports to Treasury outlining how federal funds have been used;
- Establish corporate governance standards to ensure that firms receiving federal assistance do not waste money on unnecessary expenditures; and
- Create penalties of at least $100,000 per violation for firms that fail to meet the corporate governance standards established in the bill.
The bill is co-sponsored by Senators Norm Coleman (R-MN), Joseph Lieberman (ID-CT), Patty Murray (D-WA), John Kerry (D-MA) and Lisa Murkowski (R-AK). It is supported by the National Taxpayers Unions, the Center for Fiscal Accountability, the Council for Citizens Against Government Waste, and dozens of other taxpayer rights organizations.
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