A pair of bills designed to improve oversight of the Troubled Asset Relief Program (TARP) has been introduced in the Senate. The first would place restrictions on the use of federal funds and provide greater transparency, and the second would strengthen the role of the Special Inspector General for TARP (SIGTARP). TARP was created by the $700 billion financial bailout bill that Congress passed before the election. Chances for and timing of passage of the bills remain unclear. However, as several senators are working to improve oversight of TARP, at least one other member of the Senate would prefer that SIGTARP remain a vacant post.

On Nov. 20, Sens. Diane Feinstein (D-CA) and Olympia Snowe (R-ME) introduced The Accountability for Economic Assistance Act (S. 3698). The bill contains four provisions that would place restrictions and reporting requirements on the use of TARP funds. It would prohibit those funds from being used for lobbying; require that firms provide to Treasury detailed, publicly available quarterly reports on the use of those funds; require companies to use corporate governance standards to ensure that TARP funds are not wasted; and provide penalties for firms not complying with those governance standards. The specification of penalties is a big step forward for accountability in TARP, as the original legislation was silent on if and how firms who abuse TARP should be punished.

Sens. Claire McCaskill (D-MO) and Chuck Grassley (R-IA) have also introduced legislation that would slightly improve TARP's thin oversight provisions. Their bill would allow the SIGTARP to quickly ramp up operations by bypassing the normal civil service process for six months. The bill's other provision would extend SIGTARP's authority to "any and all action conducted as part of the Troubled Asset Relief Program."

In a related matter, a lone Republican senator has placed an anonymous hold on the SIGTARP nominee, which has stalled the Senate confirmation process. TPMMuckraker suspects that Sen. Jim Bunning (R-KY) placed the secret hold on the nomination of Neil Barofsky. Bunning has been opposed to the bailout program from the beginning, and during Barofsky's confirmation hearing, the senator expressed serious concerns about Barofsky's nomination.

While Bunning is within his rights to express objections to Barofsky's nomination, his confirmation is already tardy and the TARP program continues to operate without sufficient transparency or disclosure, both in regard to how the money is being spent and who is being given contracts to implement the program.

With almost $300 billion in TARP funds obligated, the SIGTARP already has a steep climb to bring more transparency and accountability to the TARP program. Without expressing his or her particular reservations about Barofsky, the secret holder is compounding the problems created by Barofsky's late nomination and delayed confirmation.