Bailout Oversight Chief Elizabeth Warren Says Money Isn't Being Tracked

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Bailout Oversight Chief: Where's The Money Going?

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Jan 9, 2009 8:20 am US/Mountain

Bailout Oversight Chief: Where's The Money Going?

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WASHINGTON (AP) ―

Click to enlarge 1 of 1: Elizabeth Warren, Harvard University law professor and chairwoman of Congressional Oversight Panel for US financial bailout, on Dec. 18, 2008.
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A key lawmaker said Friday he expects the House to act soon to impose conditions on any new release of the second $350 billion in federal bailout funds.

Rep. Barney Frank, who heads the House Financial Services Committee, said he planned to issue a draft of his proposal to attach strings to spending of the money by either the Bush administration or the incoming Obama government.

The new conditions would include substantial efforts to reduce mortgage foreclosures and a better method for the government to track whether banks are using the federal money they receive to boost lending.

The Massachusetts Democrat said his bill could be voted on by the House as soon as next week.

"We will trust but verify," Frank said at a hearing of the committee on an unrelated issue.

In a memo to House members this week, Frank said conditions on the money were needed "because there has been widespread unhappiness with the failure of this administration to use any of the first $350 billion for mitigation of foreclosures and because money given to banks under this program flowed with virtually no strings attached."

Earlier Friday, the head of a congressional panel overseeing the Treasury Department's $700 billion bailout program said lawmakers need to "take a very hard look" at how banks have used the money.

"I'm shocked that we have to ask these questions," said Harvard law professor Elizabeth Warren, "but what I will say is that I'm not giving up on this. The best news is that these questions have gotten a lot of attention and a lot of people are demanding answers and when a lot of people demand answers, things start to change."

Warren appeared on a nationally broadcast television show as the Congressional Oversight Panel she heads released a report featuring questions about how banks are spending taxpayer money, how the money will combat the rising tide of home foreclosures and Treasury's overall strategy for the rescue.

A Dec. 30 response by Treasury "did not provide complete answers to several of the questions and failed to address a number of the questions at all," said the panel's second report.