In a previous utterance, it was revealed that Treasury would be using private contractors to carry out the rescue of selected Wall St banks. Secy Paulson assured the public it would be an "open and transparent program with appropriate oversight."

Since then, it has emerged that the dispersal of public funds to the contracting parties has been anything but transparent.

According to Chris Carey at bailoutsleuth.com,

The next day, the Treasury Department put out an announcement about a major bailout-related contract with Bank of New York Mellon Corp. that fell short in the transparency department.

The copy of the agreement that was made public had blacked-out paragraphs in the section covering Bank of New York Mellon’s compensation. If the Treasury Department is unwilling to disclose the particulars of that contract — or even the general outline of the compensation scheme — that raises questions about how it will treat disclosure of other bailout transactions.

Here’s a view of the redacted portion of the BNYM contract:

contract page

Other examples of redacted documents can be found there. Also, David Sirota links the full contracts posted on the Treasury web site.

In the contract that went to Simpson Thacher the full amount awarded was known, but the hourly rates for various departments was redacted.

The chart in the contract listed the estimated hours that would be worked by various classes of employees, from partner to legal assistant, but redacted the rate for each category.

The contract that the Treasury Department gave Simpson Thacher was awarded through competitive bidding, although only two firms made proposals. Without the information on the hourly rates, it is impossible for outside observers to say for sure whether the government got a good deal.

Treasury is still leaving it to the private contractors to determine whether a conflict of interest might prevent them from being eligible under the TARP terms. As far as accounting firms PricewaterhouseCoopers and Ernst & Young were concerned — among the six to bid for contracts with Treasury — there was no such conflict. But,

PricewaterhouseCoopers and Ernst & Young have connections to at least two companies whose troubles helped ignite the financial crisis.

Ernst & Young was the auditor for Lehman Brothers Holdings Inc., which filed for bankruptcy on Sept. 15 after potential buyers walked away and federal officials declined to rescue the firm. Certain Lehman executives are the subject of at least three grand-jury investigations. According to news reports, Ernst & Young also has been subpoenaed as part of the probe.

And,

PricewaterhouseCoopers became the administrator for Lehman Brothers International (Europe), the European branch of the investment company. It has been winding down that branch’s operations and seeking buyers for its businesses and assets.

Both firms also worked for American International Group Inc., the big insurer that has been propped up by the Federal Reserve through more than $120 billion in funding, which essentially makes the government the company’s biggest shareholder.

Moreover,

Ernst & Young last year agreed to pay $1.6 million in penalties to settle Securities and Exchange Commission charges that it violated independent auditing standards in connection with work it did for AIG and PNC Financial Services Group Inc. in 2001.

Ernst & Young neither admitted nor denied guilt in the case, which involved a financial service developed by AIG that allowed companies to transfer volatile financial assets to so-called special purpose entities and remove them from their publicly reported financial statements.

According to the SEC, Ernst & Young helped AIG market the service.

However, the SEC settled with AIG, and "AIG neither admitted nor denied guilt."

In 1933, then liberal, John T. Flynn (later on, FDR critic) surveyed a similar landscape. Here’s a short quote from his piece published in the January 1933 Harper’s Magazine:

The Congress which now presides over the dying months of President Hoover’s administration will, let us hope, bring to an end that fatuous adventure in secrecy which has stained the record of the Reconstruction Finance Corporation. In the very act of its birth the R.F.C. was stricken dumb by the President. Thereafter for five months it passed round hundreds of millions of dollars of public money to banks and railroads without affording either to the public, or even to Congress itself, a grain of information about the identity of the objects of its bounty.

(…)

These vast sums [totaling over a billion dollars] were laid out by a group of directors drawn from those business groups whose performances during the pre-crash years have rendered them objects of suspicion to the American people. The immense sums they dispensed were given to borrowers, many of whom, to put it mildly, have forfeited, justly or unjustly, the confidence of the people. These circumstances alone cast a sinister shadow over the policy of secrecy pursued. But the case is something worse than this. The Administration did not stop at mere concealment, but led the public to the acceptance of utterly false impressions.

The parallels between that time and the present are uncanny, no doubt about it.