Bill would clear the fog from opaque TARP program

Do you know where $700 billion in Troubled Asset Relief Program dollars went? Don't worry, neither does anyone else. That's why Rep. Carolyn Maloney (D-N.Y) has sponsored H.R. 1242, a bill that hasn't gotten a lot of attention. But it would amend the Emergency Economic Stabilization Act of 2008, which gave the nation TARP, so that Congress, TARP Special Inspector General Neil Barofsky, and maybe all of us some idea of where the money did go.

Treasury Department officials can tell you at a macro level which institutions got the money. But not what they actually did with it.

The bill would "provide ... continuous, and close to real-time updates of the status of funds distributed under EESA through a standardized electronic database that combines all of the necessary information from existing public and private sources to track the status of the funds distributed under the Act."

You would think that a mechanism for tracking the money would have been built into the original bill, but Congress went along anyhow, accepting "trust me" assurances from then-Treasury Secretary Henry Paulson and now Timothy Geithner.

Yesterday one of the people who is advising the House Financial Services Committee and who knows as much as anyone about how to get usable information out of large databases talked at length about it at a National Press Club luncheon sponsored by Teradata, a manufacturer of data warehousing and business analytics software.

The expert was Steve Horne, the vice president of Master Data Management and Integration Services in the Enterprise Media Group of Dow Jones. He's a regular Capitol Hill testifier.

It's highly technical, but basically what Horne said was that if the 8K reports banks are required by law to submit to the federal government are combined with other available data and analyzed by a valid methodology, it would be possible to track TARP dollars, to know how the banks used them. He's not talking about a simple mash-up, but a highly structured combination of clean, verified data, to which forensic analytics are applied.

"Money is fungible, but it can be tracked with these technologies and with available data releases," Horne said.

Although H.R. 1242 is aimed specifically at the TARP program, Horne said its principles could apply to any large-scale government program at risk for waste, fraud and abuse - and that's about all of them. Health care, stimulus spending under the Recovery Act, and Iraq and Afghanistan contracting all come to mind. Ongoing data collection and analytics ought to replace post-facto (sometimes two years post-facto) audits.

"Audits equal autopsies," Horne quipped. Much better to catch errors as they happen than try and recover money later, or just chalk it up to fate.

The Maloney bill has bi-partisan support, and it has Mark Warner (D-Va.) pushing for a Senate version.

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