Treasury finalizing TARP lobbying rules

The Treasury Department has yet to establish rules on lobbying for its $700 billion Wall Street bailout, although the head of the program’s independent watchdog says he has found no undue outside influence that has affected the program.

An audit released Thursday by Neil Barofsky, the special inspector general for the Troubled Asset Relief Program (TARP), says that the Treasury Department is in the final stages of drafting rules on lobbying for bailout money — some 10 months after the program began.

Treasury Secretary Timothy F. Geithner, when he took office in January, called for new rules to increase transparency and curtail potential lobbyist influence over the TARP decision-making process. The effort to increase transparency and control over lobbyists took a back seat, however, because “other issues had consumed Treasurys time and (had) taken precedence over completing the guidance,” the report said.

The pending lobbying rules, which are awaiting White House approval, will be similar to those governing the $787 billion economic stimulus program, the audit says.

But the report also found “little indication that external inquiries on (TARP) applications had affected the decision-making process” on how bailout money was doled out.

“No official stated that he or she received any inquiries regarding a specific applicant that they deemed inappropriate,” the audit said.

The 38-page audit studied 56 financial firms that applied for government aid and been the subject of “external inquiries,” such as calls or letters from members of Congress. Of those, 16 received money, 26 did not and 12 were still waiting for a decision as of mid-June. Two firms didnt apply.