AUGUSTA, Maine — Maine’s congressional delegation is pledging support of legislation requiring accountability and transparency in the controversial Troubled Asset Relief Program, which has been distributing billions of dollars to banks with little public accounting of the use of those funds.
“What’s going on is outrageous and cannot be allowed to continue,” Sen. Olympia Snowe, R-Maine, the senior member of the state delegation, said in an interview. “There is just no doubt we need to strengthen the oversight of this legislation and it needs to be a high priority in the new Congress.”
Snowe said in the closing hours of the session earlier this month the Senate approved legislation she co-sponsored that provided additional authority and funding for a special inspector general to oversee the distribution of the $750 billion in TARP funds.
“The lack of transparency and accountability is just not acceptable,” said Sen. Susan Collins, R-Maine, who also co-sponsored the inspector general bill. “The provisions in that bill will provide needed oversight that the taxpayers deserve.”
In an interview, Collins said the inspector general measure also would create an oversight board so Congress would have one board reviewing the process instead of several committees holding various hearings on different aspects of the program.
“This money should not be provided either to financial institutions or the auto industry without stringent conditions,” she said.
Both senators have written Treasury Secretary Henry Paulson urging that he require banks and other financial institutions that have received TARP funds to divulge how they have used the money.
“We had requirements for more oversight and transparency in the amendment we added to the auto bailout bill that we passed in the House,” said 2nd District Rep. Mike Michaud, D-Maine, in an interview. “If they had been able to pass that in the Senate, we would have the oversight now.”
He acknowledged that both Maine senators had voted to allow consideration of the automaker measure but it failed to get the 60 votes needed to end debate. He said in the new Congress, Maine’s two senators could be the votes needed to get the measure to the floor for consideration. Michaud opposed the TARP program; the two senators voted for it.
“This has to be a top priority when we go back,” Michaud said. “I would have stayed to get this done, but that was not up to me.”
First District Rep.-elect Chellie Pingree, D-Maine, said in an interview that the oversight issue must be addressed quickly. She opposed passage of TARP as a candidate for Congress because it did not have adequate oversight and did little to help “average Americans” deal with the recession.
“I think we will have a better treasury secretary and frankly a better economic team in the Obama administration,” she said. “I think this will be addressed quickly.”
Pingree said it is outrageous that banks are not using the federal funds they have received to provide credit to companies to get the economy moving. She said accountability means using the federal funds as intended, not to buy other banks.
“So many of these banks are just sitting on the cash in their vaults,” said Snowe. “I have been hearing from businesses, particularly small businesses, that they can’t get credit where they have in the past.”
Snowe, the ranking member of the Senate Small Business Committee, said many Maine banks and credit unions are providing needed credit, but that many of the national banks are not.
“A key to the recovery is getting credit thawed and money available to create the jobs this economy needs,” she said. “I am very pleased with the choice of Karen Mills to run the SBA and it is a good sign that small business will be heard by the new administration.”
Mills is the president of the MMP Group, a private equity investment firm in Brunswick, and will take over an agency that has had its budget cut over several years.
“Small business will be crucial to this recovery,” said Michaud, who serves on the House Small Business Committee. “Now is the time to strengthen the agency so that it can be a robust part of our economic recovery.”
The nomination of Mills also drew praise from Collins and Pingree.
Congress returns to work Jan. 6, but all four members of the delegation are unsure whether any measure can be enacted until after Barack Obama is inaugurated president on Jan. 20.