By Silla Brush - 10/14/10 04:22 AM EDT
The Treasury Department has paid $437 million to Fannie Mae, Freddie Mac and private contractors to help run the Wall Street bailout program, a congressional oversight panel said in a report Thursday.
The Congressional Oversight Panel said some of the 96 private contracts for the $700 billion bailout, known officially as the Troubled Asset Relief Program (TARP), raise "significant concerns" and potential conflicts of interest that limit the public's understanding of the program.
"The vast majority of people working on the TARP today receive their
paychecks from private companies, not the federal government," the
Fannie and Freddie have received about $240 million, or more than half of the money paid to outside contractors to help administer TARP, according to the report. The two companies were bailed out by the government in 2008 and continue to rely on taxpayer support.
Fannie currently employs 600 people working on TARP, compared with Treasury's 220 employees working on the program, according to the report, which said the companies "have a history of profound corporate mismanagement."
Treasury Secretary Timothy Geithner and Obama administration officials have recently praised the TARP program for helping to stabilize the financial system following the worst crisis since the 1930s.
Mark Paustenbach, Treasury Department spokesman, defended the department's use of private contractors.
"In late 2008, Treasury had to stand up a major new initiative that helped stabilize the financial markets and began the process of economic recovery," Paustenbach said in a statement. "Treasury’s demand for skills, resources and expertise was urgent and we quickly needed qualified assistance. At the same time, our contracting process remains open and transparent.”