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Geithner Announces Rules To Limit Influence Of Lobbyists On TARP Funds

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Newly sworn-in Treasury Secretary Tim Geithner got right to work Tuesday by announcing several reforms to the $700 billion financial rescue package designed to limit the influence of lobbyists in the distribution of the funds. Allegations of improper use of the Emergency Economic Stabilization Act have clouded the legislation and drawn severe criticism from lawmakers and administration officials alike.

The new rules will limit the influence of lobbyists and special interests in the EESA process and ensure that investment decisions are guided by objective assessments in the best interest of the health and stability of the financial system, the Treasury Department said.

"American taxpayers deserve to know that their money is spent in the most effective way to stabilize the financial system," Geithner said in a statement. "Today's actions reaffirm our commitment toward that goal."

The new rules include the implementation of safeguards to prevent lobbyist influence over the program. Specifically, lobbyists will not be allowed to interfere with applications or disbursements of EESA funds.

In addition, political influence will be kept out of deciding how to spend the remaining $350 billion, the Treasury Department said. The objectivity of decision-making will be reported to congress by the Office of Financial Stability, which will ensure that each investment with the remaining funds is not influenced by lobbyists and/or politicians.

Finally, transparency will be essential to the process. Only banks recommended by the primary bank regulator will be eligible for capital investments, the Treasury Department said.

All investment requests will be reviewed by the OFS, and the reviews will be made public. The OFS will be given adequate resources to expedite the process of reviewing the applications.

The U.S. Senate confirmed Geithner as Treasury Secretary late Monday by a closer than expected vote of 60 to 34.

The 47-year-old Geithner came under fire during his nomination process after Senate Finance Committee vetting of his personal finances discovered he had failed to pay self-employment taxes while working at the International Monetary Fund from 2001 to 2004.

Although Geithner and his supporters called the failure an "honest mistake" and noted that he ultimately did pay back everything he owed, the explanation fell short for some Senators.

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