Where Is The Bailout Money Really Going?

It's all right there in black and white in the text of the bailout bill passed last month, yet the public may feel like victims of a bait and switch.

The original idea: Spend $700 billion in tax dollars to buy troubled mortgage-related assets from struggling banks.

But the actual bailout calls for nothing of the sort. Instead, your tax dollars are buying massive shares in some of the nation's biggest and most successful banks - with virtually no strings attached. And that's all allowed under Congress' plan, CBS News investigative correspondent Sharyl Attkisson reports.

And to listen to government officials, you'd have thought all those billions were among the most carefully-tracked pool of tax dollars ever.

"We put in place tremendous regulatory oversight so that there will be absolute transparency," said Sen. Judd Gregg, R-N.H., on Oct. 1.

Yet ask the most basic question - how exactly are the banks using your money - and the answer can't be found. Consider the following:

  • The Treasury Department agreed to post every transaction on the Internet, but all it shows is the list of banks and how many billions they got.
  • The brand new Financial Stability Oversight Board has met four times already but they don't know how the banks are using the money.
  • There's no hint in the first official Treasury report to submitted to Congress last week.
  • And Congress promised to create its own special oversight board, but more than five weeks later not one person has been named to the panel.

    So, CBS News decided to ask the banks what they're doing with the money. We talked to the nine biggest recipients, who pointed out there's nothing in the bailout law that requires them to disclose specifics.

    CBS News does know from public information that at least four of the banks are using bailout funds to merge with or take over other banks.

    Bank officials told Attkisson that taxpayers will have to trust that the money will be used wisely.

    Congress does have the power to hold back the second half of the $700 billion if it thinks the first half isn't working out.

    But as one bank official put it: If anyone thought for a minute that every penny was somehow going to be tracked, they're going to be sorely disappointed.

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      Sharyl Attkisson is a CBS News investigative correspondent based in Washington.