Order Code RL34713
Emergency Economic Stabilization Act:
Preliminary Analysis of Oversight Provisions
Updated October 31, 2008
Curtis W. Copeland
Specialist in American National Government
Government and Finance Division

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Emergency Economic Stabilization Act: Preliminary
Analysis of Oversight Provisions
Summary
The Emergency Economic Stabilization Act of 2008 (EESA, H.R. 1424, P.L
110-343) provides authority for the Secretary of the Treasury to purchase and insure
“troubled assets” to provide stability and prevent disruption in the economy and
financial system. The act established two organizations to provide broad oversight
for the stability program — a Financial Stability Oversight Board (FSOB) and a
Congressional Oversight Panel (COP). The act also placed audit responsibilities for
the program with two individuals — a new Special Inspector General (IG) for the
Troubled Asset Relief Program (TARP), and the Comptroller General (CG) of the
Government Accountability Office (GAO). The duties and responsibilities of both
oversight panels and both auditors overlap in some areas, but are different in other
areas.
Several aspects of the FSOB do not appear to be clearly delineated in the act,
including where the FSOB is “established” within the federal government, whether
it is covered by a variety of general management laws, whether it is to be provided
information from federal departments or agencies, whether a majority of its members
must be present to take action, and how the FSOB is to be funded and staffed. Some
aspects of the COP are also unclear (e.g., how the chairperson is selected), and
neither entity appears to have the power to compel agencies to provide needed
information.
The act is also unclear regarding certain aspects of the Special IG for the TARP.
For example, although the act requires the Special IG to be provided $50 million
from the proceeds of the sale of securities such as Treasury bills and savings bonds,
it does not indicate when or how those funds are to be provided to the Special IG.
Also, the act does not indicate where the Office of the Special IG is to be
“established” or housed, and there is no specific requirement in the act that it be
provided with office space or facilities. The act indicates that the Office of the
Special IG and the CG’s responsibilities terminate on the date that the last troubled
asset is sold or the last insurance contract expires, so it is unlikely that their final
reports will reflect all transactions.
Several specific requirements in the act appear to contemplate that the “troubled
assets” being purchased and insured are residential or commercial mortgages and
instruments based on those mortgages. However, recent proposals to deal with the
financial crisis are different than these mortgage-based transactions. While the
oversight and audit responsibilities of the COP, the FSOB, the CG, and the Special
IG still apply, the nature of their specific responsibilities may need to be reconsidered
and redefined in light of the type of “troubled assets” that are initially being
purchased. It is also unclear how effective all of these oversight and audit
requirements will be in ensuring transparency and a balance of power between
Congress and the executive branch.
This report will be updated when additional information or perspectives become
available regarding the act’s oversight mechanisms.

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Contents
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Oversight and Audit Mechanisms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
The Financial Stability Oversight Board and the
Congressional Oversight Panel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Placement Within the Government . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Responsibilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Access to Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Membership . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Leadership . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Pay for Members . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Meetings/Quorum . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Staffing/Consultants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Reports by the Entities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Reports to the Entities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Funding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
The Special Inspector General for the TARP and the
Comptroller General’s Role in the Act . . . . . . . . . . . . . . . . . . . . . . . . . 8
Placement Within the Government . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Responsibilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
When Audits Begin . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Access to Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Obligation of the TARP to Respond to Audits . . . . . . . . . . . . . . . . . . 11
Staffing/Contracting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Funding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Concluding Observations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Possible Reassessment of Oversight Mechanisms . . . . . . . . . . . . . . . . 13
Oversight and the Balance of Power . . . . . . . . . . . . . . . . . . . . . . . . . . 16
List of Tables
Table 1. Characteristics of the Financial Stability Oversight Board
and the Congressional Oversight Panel in the
Emergency Economic Stabilization Act of 2008 . . . . . . . . . . . . . . . . . . . . . 18
Table 2. Responsibilities of the Comptroller General and the
Special Inspector General for the TARP in the
Emergency Economic Stabilization Act of 2008 . . . . . . . . . . . . . . . . . . . . . 23

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Emergency Economic Stabilization Act:
Preliminary Analysis of Oversight Provisions
Introduction
One of the purposes of the Emergency Economic Stabilization Act of 2008
(EESA, H.R. 1424, P.L 110-343) is to “provide authority for the Federal Government
to purchase and insure certain types of troubled assets for the purposes of providing
stability to and preventing disruption in the economy and financial system and
protecting taxpayers.”1 The term “troubled assets” is defined in Section 3(9) of the
act as
(A) residential or commercial mortgages and any securities, obligations, or other
instruments that are based on or related to such mortgages, that in each case was
originated or issued on or before March 14, 2008, the purchase of which the
Secretary determines promotes financial market stability; and (B) any other
financial instrument that the Secretary, after consultation with the Chairman of
the Board of Governors of the Federal Reserve System, determines the purchase
of which is necessary to promote financial market stability, but only upon
transmittal of such determination, in writing, to the appropriate committees of
Congress.
Section 101 of the act (“Purchases of Troubled Assets”) authorizes the Secretary
of the Treasury to “establish the Troubled Asset Relief Program (or ‘TARP’) to
purchase, and to make and fund commitments to purchase, troubled assets from any
financial institution, on such terms and conditions as are determined by the Secretary,
and in accordance with this Act and the policies and procedures developed and
published by the Secretary.” The act requires the Secretary to implement the program
through an Office of Financial Stability within the department’s Office of Domestic
Finance. The office is to be headed by an Assistant Secretary appointed by the
President with the advice and consent of the Senate, although the law permits the
Secretary to appoint an interim Assistant Secretary without Senate confirmation.2
The Secretary is authorized in Section 101(c) to take “such actions as the
Secretary deems necessary to carry out the authorities in this Act.” However, Section
101(d) requires the Secretary to publish program guidelines within two business days
1 The act is also intended “to amend the Internal Revenue Code of 1986 to provide
incentives for energy production and conservation, to extend certain expiring provisions, to
provide individual income tax relief, and for other purposes.”
2 On October 6, 2008, the Secretary of the Treasury named Assistant Secretary Neel
Kashkari as interim Assistant Secretary for the Office of Financial Stability.

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after the first purchase of troubled assets, and no later than November 17, 2008.3
Those guidelines are required to include mechanisms for purchasing troubled assets,
methods of pricing and valuing troubled assets, procedures for selecting asset
managers, and criteria for identifying troubled assets for purchase. Section 115 of
the act initially permits the Secretary to purchase up to $250 billion of troubled
assets, and up to a total of $350 billion of assets upon a written certification by the
President that the Secretary needs additional authority.4 Subsequently, if the
President submits a written plan to Congress, and if Congress does not object within
15 calendar days (through a joint resolution of disapproval described in subsection
115(c)), the Secretary may purchase up to $700 billion in troubled assets.
Section 102 of the act (“Insurance of Troubled Assets”) states that if the
Secretary establishes the program authorized in Section 101, then the Secretary “shall
establish a program to guarantee troubled assets originated or issued prior to March
14, 2008, including mortgage-backed securities.” Specifically, the Secretary is
authorized to guarantee the timely payment of up to 100% of the principal and
interest related to the assets.
Oversight and Audit Mechanisms. EESA established two organizations
to provide broad oversight for the stability program — a Financial Stability Oversight
Board (FSOB) and a Congressional Oversight Panel (COP). The act also placed audit
responsibilities for the program with two individuals — a new Special Inspector
General (IG) for the TARP, and with the Comptroller General (CG) of the
Government Accountability Office (GAO).5 Many of the audit and reporting
responsibilities delineated in the act specifically reference the actions required in
Sections 101 and 102 of the act to purchase troubled assets and to insure those
assets.6
3 On October 28, 2008, the Department of the Treasury transferred the first EESA-related
funds to participating institutions. See the remarks of Under Secretary for Domestic Finance
Anthony Ryan at [http://www.treasury.gov/press/releases/hp1240.htm]. The department has
also published guidelines for the TARP Capital Purchase Program and a list of frequently
asked questions. See [http://www.treas.gov/press/releases/hp1222.htm] for a copy of those
documents.
4 The President has reportedly certified to Congress that the additional $100 million will be
needed. Stephen Joyce, “Treasury Office to Manage $700 Billion Rescue Plan Pushes to
Build Operations,” BNA Daily Report for Executives, October 16, 2008, p. C-1.
5 GAO’s responsibilities in the act are in addition to its existing responsibilities. For
example, 31 U.S.C. §712(1) states that GAO is required to “investigate all matters related
to the receipt, disbursement, and use of public money.” For more information on GAO, see
CRS Report RL30349, GAO: Government Accountability Office and General Accounting
Office, by Frederick M. Kaiser.
6 The act also requires certain reports from the Office of Management and Budget (OMB)
and the Congressional Budget Office (CBO). For example, Section 202(a) requires OMB
to report to the President and the Congress within 60 days of the first exercise of authority
under Section 101(a) (or by December 31, 2008, whichever comes earlier), and
semiannually thereafter on how much the troubled asset program is costing, how that cost
estimate was derived, and how the estimate changed from the previous report. CBO is
(continued...)

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Questions have been raised by some observers as to whether these oversight and
audit responsibilities are complimentary to one another, or are contradictory.7 This
report provides a preliminary comparison and analysis of the specific authorities and
responsibilities of the FSOB and the COP, and also compares and analyzes the roles
and responsibilities of the Special IG and the CG as described in the act.
The Financial Stability Oversight Board
and the Congressional Oversight Panel
As described in EESA, the FSOB and the COP are similar in some respects, but
different in other respects. Also, the act is unclear with regard to several key aspects
of one or both of these entities. The discussion below and in Table 1 at the end of
this report compares the FSOB and the COP on several relevant dimensions.
Placement Within the Government. The COP is described in Section
125(a) of the act as an “establishment of the legislative branch.” In contrast, Section
104(a) of the act simply says that the FSOB is “established,” but does not indicate
whether the board is part of the executive or legislative branches. All five members
of the FSOB are from the executive branch (the Chairman of the Board of Governors
of the Federal Reserve System, the Secretary of the Treasury, the Director of the
Federal Housing Finance Agency, the Chairman of the Securities and Exchange
Commission, and the Secretary of Housing and Urban Development). Therefore, one
could reasonably presume that the FSOB is an executive branch entity.
Even if one makes that presumption, however, it is unclear whether the FSOB
is intended to be a subunit within the Department of the Treasury or some other
agency, or whether the board is intended to be a free-standing, independent entity.
The organizational placement of the FSOB may have a number of implications,
including whether the board is covered by a variety of statutory management and
transparency requirements such as the Federal Records Act, the Federal Advisory
Committee Act, the Freedom of Information Act, the Government in the Sunshine
6 (...continued)
required to assess the OMB reports within 45 days of their submission to the Congress.
Also, Section 201 of the act authorizes CBO and the Joint Committee on Taxation to receive
“all information used by the Secretary in connection with activities authorized under this
Act” to assist Congress with its oversight responsibilities.
7 See, for example, Gibson, Dunn & Crutcher LLP, “Financial Markets in Crisis: Section-by-
Section Analysis of the Emergency Economic Stabilization Act of 2008,” available at
[http://blogs.law.harvard.edu/corpgov/files/2008/10/100208-analysis-economicsabilizati
onact08.pdf]. The authors note that the oversight entities “overlap considerably,” and that
while Congress may want multiple perspectives, “the potential for these oversight entities
to trip over each other in the course of their work is great.”

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Act, and various human resources management and ethics requirements.8 Legislative
branch entities like the COP are generally not subject to these requirements.
Responsibilities. The listed responsibilities of the FSOB (in Section 104(a)
of the act) and the COB (in Sections 125(b) and (e) of the act) are similar both in
general and with regard to particular elements. For example, both entities are broadly
responsible for reviewing the Secretary’s actions in carrying out the requirements of
the act, and both are specifically responsible for examining the effect of those actions
on home ownership, financial markets, and costs to the taxpayers. As discussed in
more detail below, both are also required to report to Congress on their findings.
However, only the FSOB is charged with (1) making recommendations to the
Secretary of the Treasury regarding the use of his authorities under the act; and (2)
reporting any suspected fraud, misrepresentation, or malfeasance to the Special IG
or the Attorney General of the United States. On the other hand, only the COP is
specifically (1) permitted to hold hearings, take testimony, receive evidence, and
administer oaths and affirmations to witnesses; and (2) required to report on the
extent to which the information on transactions has contributed to market
transparency. Also, if so authorized by the panel, any individual member or agent of
the COP is authorized to take action on behalf of the panel; no such individualization
of authority is permitted by the FSOB.
Access to Information. Section 125(e)(3) of the act authorizes the COP to
obtain whatever information it needs to carry out its responsibilities from any federal
department or agency, and the heads of those departments or agencies are required
to provide the information requested by the chairperson of the panel. As noted
previously, the COP is also permitted to take testimony and administer oaths and
affirmations to witnesses. The act provides the FSOB no similar right to information
from federal departments or agencies, and there does not appear to be any obligation
on the part of those departments or agencies to provide that information to the FSOB.
Neither the FSOB nor the COP have subpoena authority, and neither is authorized
to request the Attorney General to compel agencies to provide needed information.9
Membership. As noted previously, Section 104(b) of the act states that the
FSOB is comprised of the heads of five executive branch departments or agencies:
the Chairman of the Board of Governors of the Federal Reserve System, the
Secretary of the Treasury, the Director of the Federal Housing Finance Agency, the
8 See, for example, CRS Report RL32592, General Management Laws and the 9/11
Commission’s Proposed Office of National Intelligence Director (NID) and National
Counterterrorism Center (NCTC), coordinated by Clinton T. Brass and Curtis W. Copeland.
That report indicated that more general management laws would appear to cover the NID
and NCTC if they were independent entities in the executive branch than if they were placed
within the Executive Office of the President. If the FSOB is considered part of a federal
department or agency or an independent agency, then most of these general management
laws would appear to apply. For more information about these management statutes, see
CRS Report RL30795, General Management Laws: A Compendium, coordinated by Clinton
T. Brass.
9 In contrast, the legislation establishing the Privacy and Civil Liberties Oversight Board
(121 Stat. 355) authorizes the Board to request the Attorney General to subpoena
information on its behalf.

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Chairman of the Securities and Exchange Commission, and the Secretary of Housing
and Urban Development. No provision is made for these agency heads to allow
alternates to substitute for them.
Section 125(c) of the act is less directive regarding the members of the COP,
merely specifying how members are to be appointed (i.e., one each by the Speaker
of the House of Representatives, the minority leader of the House, the majority leader
of the Senate, and the minority leader of the Senate; and one by the Speaker and the
majority leader of the Senate, after consultation with the minority leaders in each
house). The act does not require that members of the COP be from Congress or even
from the legislative branch, but it clearly contemplates Members of Congress as
potential members; Section 125(c)(3) specifies that members of the COP who are
Members of Congress or full-time officers or employees of the federal government
will receive no additional pay, allowances, or benefits. The act does not require that
the members of the COP be appointed by a certain date, although (as discussed
below) the COP is required to submit its first “regular report” within 30 days after the
first exercise of the Secretary’s authority under Section 101(a) or 102 of the act, and
is required to submit a “special report” on regulatory reform by January 20, 2009.10
Leadership. Section 104(c) of the act specifies that the chairperson of the
FSOB is elected by the members of the board, but the act excludes the Secretary of
the Treasury from having a vote in that election. According to the interim Assistant
Secretary for the Office of Financial Stability, on October 7, 2008, the members of
the board selected the Chairman of the Board of Governors of the Federal Reserve
System to be chairman of the FSOB.11 In contrast, although a chairperson of the
COP is clearly contemplated by EESA (e.g., Section 125(c)(7) of the act authorizes
the chairperson to call meetings), the legislation does not indicate how that
chairperson is to be selected.
Pay for Members. The act is silent regarding pay for members of the FSOB,
but presumably they would simply receive their regular salaries as the heads of the
five agencies. On the other hand, Section 125(c)(2) of the act states that each
member of the COP shall be paid at the daily rate of basic pay for level I of the
Executive Schedule (the cabinet secretary level, which is $191,300 per year in 2008)
for each day that the member is performing duties “vested in the Commission.” (The
act does not indicate what “commission” is referenced here, but the context suggest
that the word “panel” should have been used instead of “commission.”) As noted
previously, members of the COP who are Members of Congress or full-time federal
officers or employees are not allowed to receive additional pay, allowances, or
benefits.
Meetings/Quorum. The COP is not required to meet at any specific time;
Section 125(c)(7) of the act states that its meetings are held at the call of the
chairperson or a majority of its members. However, because the COP is required to
10 As noted earlier in this report, the Department of the Treasury transferred the first EESA-
related funds to participating institutions on October 28, 2008.
11 See interim Assistant Secretary Kashkari’s remarks before the Institute of International
Bankers, at [http://www.cnbc.com/id/27160443].

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submit its first “regular report” within 30 days after the first troubled assets are
purchased or insured, meetings of the panel are likely before the report is submitted.
Section 125(c)(5) specifies that four members of the COP constitute a quorum,
although the act states that a lesser number may hold hearings.
Section 104(d) of the act requires the FSOB to meet two weeks after the first
exercise of purchase authority of the Secretary of the Treasury, and monthly
thereafter. However, the act does not mention what constitutes a quorum for FSOB
action. According to the interim Assistant Secretary for the Office of Financial
Stability, the FSOB met on October 7 — four days after the legislation was enacted
and before the exercise of any purchase authority. At that meeting, the members
reportedly selected the Chairman of the Federal Reserve to be chairman of the FSOB,
adopted the board’s bylaws, and reviewed the TARP’s initial work streams.12 He
later said that the FSOB met again on October 13, 2008, and on October 22, 2008.13
Staffing/Consultants. The act does not mention whether and, if so, how the
FSOB is to be staffed or paid, and does not indicate whether it can hire experts or
consultants. Nevertheless, the interim Assistant Secretary for the Office of Financial
Stability testified on October 23, 2008, that the FSOB had appointed staff to the
Board, including an executive director, a general counsel, and a secretary.14
In contrast, Section 125(d) of the act permits the COP to appoint and fix the pay
of “any personnel the Commission considers appropriate.” (Again, the context
suggests that the word “panel” should have been used instead of “commission.”) The
COP is also permitted to procure temporary and intermittent experts and consultants
for up to one year, and use employees detailed from any federal department or
agency. No limits are specified on the number of employees, consultants, or detailees
that the COP may obtain, and no limits are specified regarding their pay.
Reports by the Entities. Section 104(g) of the act requires the FSOB to
report to the “appropriate committees” of Congress15 at least quarterly regarding the
implementation of its responsibilities, but the act does not specifically indicate when
those responsibilities begin. (For example, “quarterly” could mean every three
months starting on the date the act was signed into law, or starting on the date that
the Secretary of the Treasury begins exercising his authority under the act.) In
contrast, Section 125(b)(1) of the act requires the COP to submit a “regular report”
12 Ibid.
13 Testimony of Neel Kashkari, interim Assistant Secretary for the Financial Stability Office,
U.S. Department of the Treasury, before the Senate Committee on Banking, Housing, and
Urban Affairs, October 23, 2008.
14 Ibid.
15 Section 3(1) of the act defines the term “appropriate committees of Congress” as the
Committee on Banking, Housing, and Urban Affairs, the Committee on Finance, the
Committee on the Budget, and the Committee on Appropriations of the Senate; and the
Committee on Financial Services, the Committee on Ways and Means, the Committee on
the Budget, and the Committee on Appropriations of the House of Representatives.

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of the panel within 30 days after the first exercise of the Secretary’s authority under
Section 101(a) or 102 of the act, and every 30 days thereafter.16
In addition, the COP is required to submit a one-time “special report” by
January 20, 2009, analyzing the current regulatory system and its effectiveness at
overseeing the participants in the financial system and protecting consumers. The
report is also required to contain recommendations for improvement, including
whether other participants in the financial markets should be subject to the regulatory
system, the rationale for such a recommendation, and whether there are any gaps in
existing consumer protections.17
Reports to the Entities. The act does not require the FSOB to be the
recipient of any reports prepared by other entities, but several provisions in the act
specify that certain reports are to be sent to the COP. For example, (1) Section
104(g) of the act requires the FSOB to provide to the COP its quarterly reports to
Congress; (2) Section 105(d) states that any report to Congress by the Secretary that
is required by Section 105 (i.e., “tranche” reports for each $50 billion of purchases
and a “regulatory modernization” report) shall also be provided to the COP; (3)
Section 116(d) says that any report or audit required under Section 116 of the act
(including Comptroller General reports) shall also be submitted to the COP; (4)
Section 117(d) requires the CG’s report on “margin authority” to be provided to the
COP; (5) Section 121(f)(3) provides that reports by the Special IG for the TARP shall
also be submitted to the COP; and (6) Section 129(e) states that the report to certain
congressional committees on “exercise of loan authority” shall also be provided to
the COP.
Funding. The act does not indicate whether and, if so, how the FSOB is to be
funded. In contrast, the act specifies in Section 125(g) that the COP is authorized
“such sums as may be necessary for any fiscal year,” and specifies that half of the
funds are to be derived from the applicable account of the House of Representatives,
and half from the contingent fund of the Senate. The act goes on to state in Section
125(h) that an amount equal to the expenses of the COP shall be promptly transferred
by the Secretary from time to time upon the presentment of a statement of such
expenses by the chairperson of the panel. The funds are to be taken from funds
provided to the Secretary under the act and sent to the applicable fund of the House
of Representatives and the contingent fund of the Senate.
Termination. Section 104(h) of the act requires that the FSOB and its
authority terminate 15 days after (1) the date that the last troubled asset acquired
under Section 101 has been sold or transferred out of the ownership of the federal
government, or (2) the date of expiration of the last insurance contract under Section
102, whichever is later. Section 125(f) of the act states that the COP is to terminate
16 As noted earlier in this report, the Department of the Treasury transferred the first EESA-
related funds to participating institutions on October 28, 2008.
17 S. 3652, introduced by Senator Maria Cantwell on September 29, 2008, would have
established an independent, bipartisan commission to conduct a similar review of the U.S.
financial system. The bill also would have established a special inspector general for
financial markets oversight.

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six months after the authorities provided to the Secretary expire, which is described
in Section 120 of the act as December 31, 2009, subject to extension. There are no
requirements in the act that either the FSOB or the COP preserve any records, or to
provide a means by which the public or others can access any records.
The Special Inspector General for the TARP
and the Comptroller General’s Role in the Act
As was the case with the two general oversight bodies, the act’s descriptions of
the duties and responsibilities of the Special IG for the TARP and the Comptroller
General are similar in some respects, but differ in other ways. Also, certain elements
of the Special IG’s operations appear to be undefined. The discussion below and in
Table 2 at the end of this report compares the roles of the Special IG and the CG
with regard to several relevant dimensions.
Placement Within the Government. Pursuant to the Bowsher v. Synar
decision of the Supreme Court, it is clear that GAO is a legislative branch agency,
and can have no executive branch functions.18 However, although Section 121(a) of
EESA “established” the Office of the Special IG for the TARP, the act does not
indicate where in the government that office is to be housed. Legislation establishing
other special inspectors general, while not specifying organizational placement,
contains other indications of where the entity was housed. For example, the Special
Inspector General for Iraq Reconstruction was established by Section 3001 of P.L.
108-106, which provided that the IG was appointed by the Secretary of Defense (after
consultation with the Secretary of State), and reported to the head of the Coalition
Provisional Authority.
The act is also unclear where the Special IG’s offices are to be located. Section
116(a)(2)(A) requires the Secretary of the Treasury to provide GAO with appropriate
audit space and facilities in the Department of the Treasury, but the act contains no
similar requirement for the Special IG. However, Section 121(d)(1) of the act says
that, in carrying out the duties delineated in the act in subsection (c), “the Special
Inspector General shall have the authorities provided in section 6 of the Inspector
General Act of 1978.” Section 6 of the Inspector General Act (codified at 5 U.S.C
Appendix) states, in relevant part, that the “head of an establishment shall provide
the Office within such establishment with appropriate and adequate office space at
central and field locations of such establishment, together with such equipment,
office supplies, and communications facilities and services as may be necessary.”
Therefore, if the Special IG is determined to be located within the Department of the
Treasury, then the Secretary may be required to provide the Special IG with space
and facilities.19
18 Bowsher v. Synar, 478 U.S. 714, at 734 (1986).
19 According to the interim Assistant Secretary for the Office of Financial Stability, in
anticipation of the upcoming nomination and confirmation of the Special IG, the Department
of the Treasury has already begun meeting with the department’s IG.

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CRS-9
Responsibilities. Section 116(a)(1) of the act describes the responsibilities
of the Comptroller General with regard to the TARP, and Section 121(c)(1) describes
the responsibilities of the Special IG. The general responsibilities of both the CG and
the IG are similar, although stated somewhat differently. For example, once the
TARP is established, the CG is to “commence ongoing oversight of the activities and
performance of the TARP,” including the performance of the TARP in meeting the
purposes of this Act”. The Special IG is to “conduct, supervise, and coordinate
audits and investigations of the purchase, management, and sale of assets by the
Secretary of the Treasury under any program established under section 101, and the
management of the Secretary of any program established under section 102.”
The two audit organizations’ specific responsibilities are similar, but also differ
in some ways. For example, while both the CG and the Special IG are required to
identify the troubled assets acquired under the program, only the Special IG is
charged with describing why the Secretary deemed it necessary to purchase each
asset, and to list (with detailed biographical information) each person or entity hired
to manage the troubled assets. The CG, on the other hand, is the only entity
specifically required to examine the internal controls of the TARP, to examine the
efficiency of TARP operations and contracting procedures, and to review the TARP’s
efforts to minimize conflicts of interest.
The act gives two responsibilities to the CG that are not given to the Special IG.
Section 116(b)(1) of the act requires the CG to audit the TARP’s financial
statements, and Section 117 requires the CG to determine the extent to which
leverage and sudden deleveraging of financial institutions was a factor behind the
financial crisis, including the roles of the Board of Governors of the Federal Reserve
System, the Securities and Exchange Commission, the Secretary of the Treasury, and
others.
When Audits Begin. Section 121(b)(1) requires the President to nominate
the Special IG “as soon as practicable after the establishment of any program under
sections 101 and 102.” According to an interim final rule issued by the Board of
Governors of the Federal Reserve System, on October 14, 2008, the Secretary of the
Treasury announced a program within the TARP to provide capital to eligible
financial institutions.20 Therefore, it appears that a “program” triggering the
nomination of the Special IG has been established. The interim Assistant Secretary
for the Office of Financial Stability said that Treasury officials were “working with
the White House to identify candidates for possible nomination and confirmation in
November.”21 Also, Section 121(e) of the act indicates that the Office of the Special
IG is to be provided $50 million from the proceeds of the sale of securities, including
Treasury bills and savings bonds.22 However, the act does not indicate when or how
20 See [http://www.federalreserve.gov/newsevents/press/bcreg/bcreg20081016a1.pdf] for
a copy of this rule.
21 See interim Assistant Secretary Kashkari’s remarks before the Institute of International
Bankers, at [http://www.cnbc.com/id/27160443].
22 Specifically, Section 121(g) of the act says that “Of the amounts made available to the
Secretary of the Treasury under section 118, $50,000,000 shall be available to the Special
(continued...)

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CRS-10
those funds are to be provided, so it is unclear when the Office of the Special IG will
be operational.
The act says that the CG’s audit functions are to begin “upon establishment of
the troubled asset relief program.” According to the interim Assistant Secretary and
the acting CG, GAO has already begun its reviews. GAO officials and staff
reportedly met with Treasury officials on October 9, and they reviewed certain
contracts on October 12.23 At least one Member of Congress has expressed support
for these actions by GAO.24
Access to Information. The act provides both the CG and the Special IG
with access to certain information, although those rights differ somewhat.25 Section
116(a)(2)(B) states that, consistent with applicable law, the CG has access to any
information or “things” belonging to the TARP, and to its officers, employees, or
agents. Section 121(e)(4) requires the heads of other agencies to furnish the Special
IG with any requested information or assistance that is “practicable” and not in
contravention to law. Therefore, the CG appears to have specific access rights to
information from the TARP, whereas the Special IG appears to have specific access
only to information from other agencies. Also, the act requires that the CG be given
“full facilities for verifying transactions with the balances or securities held by
depositaries, fiscal agents, and custodians,” and is permitted to make and retain
copies of any records. No similar rights are specifically afforded the Special IG.
As noted previously, however, Section 121(d)(1) of the act says that, in carrying
out the duties delineated in the act in subsection (c), “the Special Inspector General
shall have the authorities provided in section 6 of the Inspector General Act of 1978.”
Section 6 of the Inspector General Act states, in relevant part, that each inspector
general is authorized to “have access to all records, reports, audits, reviews,
documents, papers, recommendations, or other material available to the applicable
establishment which relate to programs and operations with respect to which that
Inspector General has responsibilities under this Act.” That section goes on to
authorize the IGs to require by enforceable subpoena the production of all
information, documents, and other evidence needed in the performance of the
functions assigned by the act.
22 (...continued)
Inspector General to carry out this section.” Section 118 states that the “Secretary may use
the proceeds of the sale of any securities issued under chapter 31 of title 31, United States
Code.” Chapter 31 of Title 31 (“Public Debt”) includes savings bonds and savings
certificates (Section 3105), retirement and savings bonds (Section 3106), and other vehicles.
23 See interim Assistant Secretary Kashkari’s remarks before the Institute of International
Bankers, at [http://www.cnbc.com/id/27160443].
24 Humberto Sanchez, “Frank Praises GAO for Oversight of Treasury Rescue Plan,”
Congress Daily, October 14, 2008.
25 GAO has certain data access rights under existing law. For example, 31 U.S.C. §716(a)
states that each agency is to “give the Comptroller General information the Comptroller
General requires about the duties, powers, activities, organization, and financial transactions
of the agency.”

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CRS-11
Obligation of the TARP to Respond to Audits. Section 116(b)(3) of the
act requires the TARP to address deficiencies that the CG identifies, or to certify to
the appropriate committees of Congress that no action is needed. The act places no
similar requirement on the TARP regarding audit findings by the Special IG.
Staffing/Contracting. Section 121(e) of the act permits the Special IG to
select, appoint, and employ as many officers and employees as he or she deems
necessary, but the selection, classification, and pay of those employees is governed
by the requirements of current civil service law in Title 5, United States Code. That
section also permits the Special IG to employ experts and consultants at a rate not to
exceed GS-15 of the General Schedule (the top end of which is currently $149,000
per year in Washington, D.C.), and to enter into contracts for other audits or studies.
These authorities are similar to those provided to other statutory inspectors general
under the Inspector General Act of 1978. The act contains no similar provisions for
the CG, but GAO already has similar abilities under its existing statutory
authorities.26
Reports. Both the CG and the Special IG are required to submit reports
regarding their audit activities to the appropriate committees of Congress, but some
of the specifics are unclear and appear to be different. For example, Section
116(a)(3) requires the CG to submit GAO’s reports at least every 60 days, but does
not specifically indicate when the first 60-day period begins. Section 121(f)(1)
requires the Special IG’s reports to include a “detailed statement of all purchases,
obligations, expenditures, and revenues associated with any program established by
the Secretary of the Treasury under sections 101 and 102.” In contrast, the CG is
simply required to submit reports of “findings under this section.” The CG is
required to submit GAO’s reports to the Special IG; the Special IG is not required to
reciprocate, but is required (by Section 121(f)(3) of the act) to submit its reports to
the COP. Notably, in contrast to reports from statutory inspectors general, neither the
CG’s reports nor the Special IG’s reports are sent to the Secretary of the Treasury or
any other executive branch official. It is also unclear whether the Department of the
Treasury will be allowed to comment on GAO’s or the Special IG’s findings before
the reports are sent to Congress, or whether the reports are to be made public.
Funding. Section 116(a)(2)(C) of the act requires the Department of the
Treasury to reimburse GAO for the full cost of any oversight activities that are billed
by the CG. Section 116(b)(1) requires the department to reimburse GAO for the full
cost of the audit of the TARP financial statement — a requirement that is similar to
one in the Government Accountability Office Act of 2008 (P.L. 110-323).27
26 For example, 31 U.S.C. §731 permits the Comptroller General to procure the services of
up to 20 experts and consultants for up to three years at daily rates of pay for level IV of the
Executive Schedule (currently $149,000 per year).
27 Section 6 of that legislation provides that, after October 1, 2009, if GAO “audits any
financial statement or related schedule which is prepared under section 3515 by an executive
agency,” the agency must reimburse GAO for the cost of the audit if GAO audited the
statement for FY2007.

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CRS-12
In contrast, Section 121(g) of the act requires that $50 million of the funds from
the proceeds of the sale of securities under Section 118 be provided to the Special IG
to carry out his or her responsibilities. Section 118 of the act states that the Secretary
“may use the proceeds of the sale of any securities issued under chapter 31 of title 31,
United States Code” for the authorities granted in the act and the cost of
administering those authorities. Chapter 31 of title 31 (“Public Debt”) includes
Treasury bills, savings bonds and savings certificates, and other instruments.
However, the timing and mechanics of the transfer of funds to the Special IG are
unclear (e.g., whether the Special IG gets a one-time payment of $50 million at the
time the office is established, or whether that amount is to be provided over a longer
period of time, as determined by the Secretary of the Treasury).
Termination. Section 121(h) of the act specifies that the Office of the Special
IG terminates on the later of (1) the date the at the last troubled asset acquired under
Section 101 has been sold or transferred, or (2) the date of expiration of the last
insurance contract under Section 102.28 Section 116(e) says that the CG’s oversight,
audit, and reporting requirements under the act also terminate on those dates. Also,
Section 116(a)(2)(A) states that the Secretary of the Treasury is to provide the CG
with audit space and facilities until the termination date specified in Section 120
(which is December 31, 2009, subject to extension). There are no requirements in
the act that either the CG or the Special IG preserve any records or provide a means
by which the public or others can access any records.
Concluding Observations
The preceding discussion suggests that several aspects of the FSOB’s
establishment and operations are not clearly specified by EESA. For example, it is
unclear where the FSOB is located within the federal government, or whether it is
covered by a variety of general management and transparency requirements. Also,
unlike the COP, the act does not provide the FSOB with a statutory right to
information from federal departments or agencies. When the FSOB meets, it is not
clear whether all or a majority of members must be present to take action, as the act
does not specify what constitutes a quorum. The act does not indicate whether, and
if so how, the FSOB is to be funded or staffed, or whether it can employ consultants
to help it carry out its mission. As a result, it may be difficult for the board to carry
out some of the tasks that it has been assigned — particularly since several members
of the FSOB are likely to change at the end of this Administration. Although the
FSOB is required to report “quarterly,” the act does not specify when those quarterly
periods begin. The FSOB also does not appear to receive any of the various reports
that are provided to the COP (e.g., reports by the Special IG or the CG).
Although the establishment and operation of the COP is more specifically
delineated in the act, some aspects of the COP’s operations are also unclear or
unspecific. For example, the act provides the chairperson of the COP with certain
28 In comparison, the posts of Special Inspector General for Iraq Reconstruction and Special
Inspector General for Afghanistan Reconstruction are each to end 180 days after its parent
entity’s reconstruction funds are less than $250 million.

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CRS-13
duties and responsibilities (e.g., calling meetings of the panel), but does not indicate
how the chairperson is to be selected.
There are also several issues that are unclear or uncertain regarding the two
audit organizations provided for in the act — particularly with regard to the Special
IG. For example, the act indicates that the President is to nominate the Special IG
“as soon as practicable after the establishment of any program under sections 101 and
102.” However, the Interim Secretary for Financial Stability indicated that the
nomination of a Special IG may not be made until November 2008. Also, the act
states that the Special IG is to be provided $50 million from the proceeds of the sale
of securities to carry out the act’s requirements, but it is unclear when those payments
are to be made and in what amounts.
In addition, although the act states that the Office of the Special IG is
“established,” it does not indicate where the office will be housed, and (in contrast
to the provisions regarding GAO) there is no specific requirement in the act that the
Secretary of the Treasury or any other department or agency to provide the office
with space or facilities. (However, if the Office of the Special IG is considered part
of the Department of the Treasury, then the Secretary may be required by the
Inspector General Act of 1978 to do so.) Finally, the act indicates that both the
Office of the Special IG and GAO’s audit and reporting responsibilities under the act
terminate on the date that the last asset is sold or the last insurance contract expires,
whichever is later. If so, then it is unlikely that reports of the Special IG or GAO will
reflect all relevant transactions, as some period after those dates will likely be needed
to summarize the information and provide a complete historical record.
The duties and responsibilities of both oversight panels and both audit
organizations clearly overlap in some areas. The reporting requirements also appear
to overlap with other reports required by EESA.29 Congress may have wanted those
overlaps to occur, providing it with differing perspectives on the same issues.
However, in practice, those areas of overlap may prove to be counterproductive,
particularly if the bodies are not sharing relevant information and, as a result, are
reaching different conclusions based on incomplete or variable data and methods.
Possible Reassessment of Oversight Mechanisms. There may also
need to be a reassessment of at least some of these oversight mechanisms in light of
recent changes in the types of programs being established and considered by the
29 For example, as noted previously, Section 202(a) of the act requires the Office of
Management and Budget (OMB) to report to the President and the Congress no later than
December 31, 2008, and semiannually thereafter, (1) an estimate of the cost of the troubled
assets and guarantees of the troubled assets, (2) the information used to derive the estimate,
and (3) a detailed analysis of how the estimate has changed since the previous report.
Section 202(b) requires the Congressional Budget Office to submit a report to Congress
within 45 days after the OMB report is delivered assessing the OMB cost estimates and
information, and describing the “impact on the deficit and the debt.” Section 203 requires
a separate analysis of EESA in the President’s budget, including two different methods of
developing (1) an estimate of the current value of all assets purchased, sold, and guaranteed
under the act; and (2) an estimate of the deficit, the debt held by the public, and the gross
federal debt.

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CRS-14
Secretary of the Treasury to respond to the financial crisis. When EESA was enacted
on October 3, 2008, the type of “troubled assets” that were generally expected to be
purchased under the TARP were those fitting the first definition in Section 3(9) of
the act — i.e., “residential or commercial mortgages and any securities, obligations,
or other instruments that are base on or related to such mortgages.” For example,
Section 101 requires that the program guidelines that the Secretary of the Treasury
must develop include “methods of pricing and valuing troubled assets.” Under
Section 102, the Secretary is authorized to guarantee up to 100% of the principal and
interest related to the assets. Also, several members of the FSOB appear to have
been named to the board because of their relationship to the housing industry (e.g.,
the Director of the Federal Housing Finance Agency and the Secretary of Housing
and Urban Development). While the bill was being considered in Congress, press
accounts referred to the legislation as a plan to spend $700 billion “to buy bad assets
from faltering financial institutions.”30 Shortly after passage, the legislation was
described as having “granted authority to purchase up to $700 billion in troubled
mortgage-backed securities from debt-riddled Wall Street firms, a move designed to
free up the credit markets.”31
Some of the audit provisions also seem to focus on this conception of a
“troubled asset.” For example, Section 116(a)(1) of the act states that the CG is to
describe the “characteristics of transactions and commitments entered into, including
transaction type, frequency, size, prices paid, and all other relevant terms and
conditions, and the timing, duration and terms of any future commitments to
purchase assets.” The CG is also required to describe the “characteristics and
disposition of acquired assets, including type, acquisition price, current market value,
sale prices and terms, and use of proceeds from sales.”
However, on October 14, 2008, the Secretary of the Treasury announced that
initial funds from EESA would be used to purchase preferred shares of stock in
certain banks, thereby utilizing the broader definition of a “troubled asset” provided
in Section 3(9)(B) of the act — i.e., any financial instrument that the Secretary of the
Treasury deems “necessary to promote financial stability.”32 On October 23, 2008,
the interim Assistant Secretary for the Office of Financial Stability testified before
the Senate Committee on Banking, Housing, and Urban Affairs that the department’s
“Capital Purchase Program” might be used to encourage healthy financial institutions
to acquire failing banks.33 He also said that the department was considering
implementing a large-scale program to guarantee troubled mortgages, which is
30 Lori Montgomery and Shailagh Murray, “Senate Approves Bailout; House to Take Up
Bill With Added Tax Breaks, Higher FDIC Limits,” Washington Post, October 2, 2008, p.
A1.
31 Michael Kranish and Jenny Paul, “Resounding Yes to Bailout,” Boston Globe, October
4, 2008, p. A1.
32 David Cho, Neil Irwin, and Peter Whoriskey, “US Forces Nine Major Banks to Accept
Partial Nationalization,” Washington Post, October 14, 2008, p. A-1; and Neil Irwin and
David Cho, “Paulson’s Change in Rescue Tactics,” Washington Post, October 15, 2008, p.
D-1.
33 Mike Ferullo, “Equity Purchase Program May Be Used to Encourage Acquisitions,
Kashkari Says,” BNA Daily Report for Executives, October 24, 2008, p. A-26.

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CRS-15
authorized under Section 109 of EESA. On October 25, 2008, the Washington Post
reported that the Department of the Treasury was “dramatically expanding the scope
of its bailout of the financial system with a plan to take ownership stakes in the
nation’s insurance companies.”34 Treasury officials are also reportedly in discussions
about using TARP or other funds to address liquidity problems facing state and local
governments.35 U.S. automakers have also reportedly sought inclusion in the
program.36
While the oversight and audit responsibilities of the COP, the FSOB, the CG,
and the Special IG may still generally apply to these new programs, the makeup and
the nature of their specific responsibilities may need to be reconsidered and redefined
in light of the type of “troubled assets” being purchased and the other types of
programs being considered. For example, given the initial focus on purchasing bank
stock, additional members of the FSOB could be appointed based on their expertise
in the banking industry (e.g., the head of the Federal Deposit Insurance Corporation
or the Comptroller of the Currency). Congressional leaders have been encouraged
to include state representation on the COP, in recognition of the importance financial
institutions have on state economies.37 The specific responsibilities of the oversight
and audit organizations may also need to be supplemented or reconfigured to fit the
current direction of the Office of Financial Stability.
In addition, to the extent that the Secretary establishes programs based on
statutory authorities outside of Sections 101 and 102 of EESA, the audit
responsibilities of both the CG and the Special IG may need to be redefined to ensure
that they cover all aspects of the program. For example, Section 116(a)(1) defines
the CG’s “scope of oversight” as “the activities and performance of the TARP and
of any agents and representatives of the TARP (as related to the agent or
representative’s activities on behalf of or under the authority of the TARP), including
vehicles established by the Secretary under this Act.” Section 3(8) of the act defines
the TARP as “the Troubled Asset Relief Program established under section 101.”
Similarly, Section 121(c) of the act defines the duties of the Special IG as audits and
investigations of the “purchase, management, and sale of assets by the Secretary of
the Treasury under any program established by the Secretary under section 101, and
the management by the Secretary of any program established under section 102.”
Since all of these audit functions are geared to Sections 101 and 102 of the act, it is
unclear whether the CG or the Special IG can audit or investigate programs
established pursuant to other sections of the act (e.g., the proposed program to
guarantee troubled mortgages under Section 109).

34 David Cho, Binyamin Appelbaum, and Zachary A. Goldfarb, “Bailout Expands to
Insurers,” Washington Post, October 25, 2008, p. A1.
35 Yin Wilczek, “MSRB in Discussions Concerning Possible Bailout of State, Local
Governments,” BNA Daily Report for Executives, October 28, 2008, p. A-21.
36 Nora Macaluso, “Federal Aid Crucial for Survival of U.S. Automakers, Analysts Say,”
BNA Daily Report for Executives, October 30, 2008, p. AA-1.
37 Stephen Joyce, “New York Governor Pushes for State Representation on TARP Oversight
Panel,” BNA Daily Report for Executives, October 28, 2008, p. A-28.

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CRS-16
Oversight and the Balance of Power. Finally, and more generally, it is
unclear how effective all of these oversight and audit requirements will be in
ensuring transparency of the troubled assets program to the public, and in
maintaining the balance of power between Congress and the executive branch.
EESA established numerous reporting requirements for both oversight entities and
both auditors. For example,
! Section 104(g) requires the FSOB to report to the appropriate
committees of Congress and the COP at least quarterly on the
Secretary’s exercise of authority under the act.
! Section (a)(3) requires the CG to submit reports of GAO’s findings
at least every 60 days to the appropriate committees of Congress and
the Special IG for the TARP.
! Section 121(f) requires the Special IG to submit reports every
calendar quarter summarizing the activities of the IG to the
appropriate committees of Congress and to the COP.
! Section 125(b)(1) requires the COP to submit reports every 30 days
to Congress on (among other things) the use of the Secretary’s
authority under the act and the impact of purchases on financial
markets and institutions.
The act does not require any of these reports to be provided directly to the public,
although Congress, other report recipients, or the developers of the reports may elect
to make them public.
EESA gave the Secretary of the Treasury broad authority to purchase “troubled
assets,” and defined that term to include any financial instrument that the Secretary
deems “necessary to promote financial market stability.” Congress gave itself
expedited legislative procedures to disapprove actions by the Secretary, but only after
the first $350 billion has been obligated.38 Congress can use its regular legislative
procedures to disapprove actions regarding the first $350 billion of asset purchases,
but a presidential veto of any congressional action (whether through regular or
expedited procedures) will require a two-thirds vote of both houses of Congress to
prevent the Secretary’s actions from taking effect.
Senate confirmation of agency officials is another means by which Congress can
provide oversight of executive branch actions, and that authority will be particularly
relevant regarding the nomination of the Assistant Secretary of the Treasury for the
Office of Financial Stability. However, the legislation permits the Secretary of the
Treasury to appoint an interim Assistant Secretary, and places no limit on how long
that appointee may serve. Given the scope of the Assistant Secretary’s
38 As noted earlier in this report, Section 115(a)(3) of the act states that if the President
sends Congress a written report describing the Secretary of the Treasury’s plan to spend the
second $350 billion, Congress has 15 calendar days to enact a joint resolution of
disapproval.

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CRS-17
responsibilities and the need for immediate action, a nomination for the position may
not be submitted during the remaining days of the 110th Congress. The only other
position established by EESA that requires Senate confirmation is the Special
Inspector General for the TARP. According to the interim Assistant Secretary, the
President is expected to submit a nomination for the position in November 2008.

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CRS-18
Table 1. Characteristics of the Financial Stability Oversight
Board and the Congressional Oversight Panel in the Emergency
Economic Stabilization Act of 2008
Financial Stability Oversight
Congressional Oversight
Board (FSOB) (Section 104)
Panel (COP) (Section 125)
Placement
Unclear. Subsection (a) simply
(a) An “establishment of the
Within the
says the FSOB is “established”.
legislative branch.”
Federal
Government
Responsibilities
(a) The FSOB is responsible for
(b) The COP shall review the
—
current state of the financial
(1) reviewing the exercise of
markets and the regulatory system,
authority under a program
and submit “regular reports” to
developed in accordance with this
Congress on —
Act, including
(1) the use by the Secretary of
— (A) policies implemented by
authority under the act, including
the Secretary and the Office of
the use of contracting authority
Financial Stability created under
and the administration of the
Sections 101 and 102, including
program;
the appointment of financial
(2) the impact of purchases made
agents, the designation of asset
under the act on financial markets
classes to be purchased, and plans
and financial institutions;
for the structure of vehicles used
(3) the extent to which
to purchase troubled assets; and
information made available on
— (B) the effect of such actions
transactions has contributed to
in assisting American families in
market transparency; and
preserving home ownership,
(4) the effectiveness of
stabilizing financial markets, and
foreclosure mitigation efforts and
protecting taxpayers;
the effectiveness of the program
(2) making recommendations, as
from the standpoint of minimizing
appropriate, to the Secretary
long-term costs to the taxpayers
regarding use of the authority
and maximizing the benefits for
under this Act; and
taxpayers.
(3) reporting any suspected fraud,
misrepresentation, or malfeasance
to the Special Inspector General
for the Troubled Assets Relief
Program or the Attorney General
of the United States, consistent
with Section 535(b) of title 28,
United States Code.

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CRS-19
Financial Stability Oversight
Congressional Oversight
Board (FSOB) (Section 104)
Panel (COP) (Section 125)
Other
(e) In addition to the above
(e)(1) In carrying out its
Authorities and
responsibilities, the FSOB has the
responsibilities, the COP may
Powers
authority to ensure that the
hold hearings, “sit and act at times
policies implemented by the
and places,” take testimony,
Secretary are —
receive evidence, and administer
oaths and affirmations to
(1) in accordance with the
witnesses.
purposes of the Act;
(e)(2) Any member or agent of the
(2) in the economic interests of
COP may, if authorized by the
the United States; and
panel, take any action which the
COP is authorized to take.
(3) consistent with protecting
taxpayers, in accordance with
Section 113(a) (entitled
“Minimization of Long-Term
Costs and Maximization of
Benefits for Taxpayers”)
Access to Data
No mention.
(e)(3) The COP may secure
directly from any department or
agency of the U.S. information
needed to carry out its
responsibilities. Upon request of
the chairperson of the COP, the
head of any department or agency
shall furnish such information.
Membership
(b) The FSOB is comprised of (1)
(c) The COP shall consist of five
Chairman of the Board of
members, with one member each
Governors of the Federal Reserve
appointed by (1) the Speaker of
System, (2) the Secretary of the
the House of Representatives; (2)
Treasury; (3) the Director of the
the minority leader of the House
Federal Housing Finance Agency;
of Representatives; (3) the
(4) the Chairman of the Securities
majority leader of the Senate; (4)
and Exchange Commission, and
the minority leader of the Senate;
(5) the Secretary of Housing and
and (5) the Speaker and the
Urban Development.
majority leader of the Senate, after
consultation with the minority
leaders of each house.
(c)(6) A vacancy on the COP shall
be filled in the same manner as the
original appointment.
Leadership
(c) The chairperson of the FSOB
Although Section (c)(7) authorizes
shall be elected by the members of
a “chairperson” of the COP to call
the board (other than the
meetings, the act does not indicate
Secretary)
how the chairperson is selected.

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CRS-20
Financial Stability Oversight
Congressional Oversight
Board (FSOB) (Section 104)
Panel (COP) (Section 125)
Pay for
No mention
(c)(2) Each member of the COP
Members
shall be paid at the daily rate of
basic pay for level I of the
Executive Schedule ($191,300 in
2008) for each day the member is
performing duties in the
Commission.
(3) However, members of the
COP who are Members of
Congress or full-time federal
officers or employees of the U.S.
receive no additional pay,
allowances, or benefits.
Meetings
(d) The FSOB shall meet two
(c)(7) The COP shall meet at the
weeks after the first exercise of
call of the chairperson or a
purchase authority of the
majority of its members.
Secretary and monthly thereafter.
Quorum
No mention.
(c)(5) Four members of the COP
constitute a quorum, but a lesser
number may hold hearings.
Subordinate
(f) The FSOB may appoint a
No mention.
Bodies
credit review committee to
evaluate the use of the purchase
authority provided under the Act
and the assets acquired through
the use of that authority.
Staffing and
No mention
(d)(1) The COP may appoint and
Consultants
fix the pay of any personnel it
deems appropriate.
(d)(2) The COP may procure
temporary and intermittent
services under Section 3109(b) of
title 5 (experts and consultants for
up to one year).
(d)(3) Upon request of the COP,
the head of any federal department
or agency may detail (on a
reimbursable basis) any personnel
of that department or agency to
the COP.

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CRS-21
Financial Stability Oversight
Congressional Oversight
Board (FSOB) (Section 104)
Panel (COP) (Section 125)
Reports by the
(g) The FSOB shall report to the
(b)(1)(B) The “regular reports” of
Entity
appropriate committees of
the COP (described in subsection
Congress and the COP not less
(a) above) shall be submitted
than quarterly regarding its
within 30 days after the first
responsibilities under subsection
exercise of the Secretary’s
(a).
authority under Section 101(a) or
102, and every 30 days thereafter.
(b)(2) The COP is also to submit a
“special report on regulatory
reform” not later than Jan. 20,
2009, analyzing the current
regulatory system and its
effectiveness at overseeing the
participants in the financial system
and protecting consumers, with
recommendations for
improvement (including whether
other participants in the financial
markets should be subject to the
regulatory system, the rationale
for such a recommendation, and
whether there are any gaps in
existing consumer protections).
Reports to the
No mention.
Per Section 104(g) of the act, the
Entity
FSOB is to provide its quarterly
reports to Congress to the COP.
Per Section 105(d), any report to
Congress by the Secretary that is
required by section 105 shall also
be provided to the COP.
Per Section 116(d), any report or
audit required under section 116
of the act (including Comptroller
General reports) shall also be
submitted to the COP.
Per Section 117(d), the
Comptroller General’s report on
“margin authority” is also to be
provided to the COP.
Per Section 121(f)(3), reports by
the Special Inspector General for
the TARP shall also be submitted
to the COP.
Per Section 129(e), the report to
certain congressional committees
on “exercise of loan authority”
shall also be provided to the COP.

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CRS-22
Financial Stability Oversight
Congressional Oversight
Board (FSOB) (Section 104)
Panel (COP) (Section 125)
Funding
No mention.
(g) There is authorized to be
appropriated to the COP such
sums as may be necessary for any
fiscal year, half of which shall be
derived from the applicable
account of the House of
Representatives, and half from the
contingent fund of the Senate.
(h) An amount equal to the
expenses of the COP shall be
promptly transferred by the
Secretary from time to time upon
the presentment of a statement of
such expenses by the chairperson
of the panel. The funds are to be
taken from funds provided to the
Secretary under the act and sent to
the applicable fund of the House
of Representatives and the
contingent fund of the Senate.
Termination
(h) The FSOB and its authority
The COP shall terminate 6 months
shall terminate 15 days after the
after the termination date in
later of (1) the date that the last
Section 120 (Dec. 31, 2009,
troubled asset acquired under
subject to extension)
Section 101 has been sold or
transferred out of the ownership of
the federal government, or (2) the
date of expiration of the last
insurance contract under Section
102.

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CRS-23
Table 2. Responsibilities of the Comptroller General and the
Special Inspector General for the TARP in the Emergency
Economic Stabilization Act of 2008
Comptroller General (CG) Special Inspector General
(Section 116)
(IG) (Section 121)
Placement Within
GAO is a legislative branch
Unclear, although presumably
the Federal
agency (per Bowsher v. Synar,
within the Department of the
Government
478 U.S. 714, at 734 (1986)).
Treasury (since the Secretary is
authorized to establish the
TARP).
Responsibilities
(a) (1) The CG shall oversee
(c) (1) The Special IG shall
the activities and performance
conduct, supervise, and
of the TARP and its agents and
coordinate audits and
representatives, including:
investigations of the purchase,
— (A) the performance of the
management, and sale of assets
TARP in meeting the purposes
under any Section 101 program,
of the Act, particularly
and the management of any
foreclosure mitigation, cost
program under Section 102,
reduction, stability of financial
including by collecting and
markets or banking system, and
summarizing:
protection of taxpayers;
— (A) a description of the
— (B) the financial condition
categories of troubled assets
and internal controls of the
purchased or procured by the
TARP and its agents;
Secretary;
— (C) the characteristics of
— (B) a listing of the troubled
transactions and commitments
assets in each category;
entered into, including type,
— (C) an explanation of why
frequence, size, prices paid,
the Secretary deemed it
terms/conditions, and terms of
necessary to purchase each asset;
future commitments;
— (D) a listing of each
— (D) the characteristics and
institution selling those assets;
disposition of acquired assets,
— (E) a listing (with detailed
including type, acquisition
biographical information) of
price, market value, sale prices
each person or entity hired to
and terms, and use of
manage such troubled assets;
proceeds);
— (F) a current estimate of the
— (E) the efficiency of TARP
amount of troubled assets on the
operations in using
books, purchased, and sold, and
appropriated funds;
the profit or loss on each sale;
— (F) the compliance of
and
TARP and its agents with
— (G) a listing of the insurance
applicable laws and
contracts issued.
regulations;
— (G) TARP’s efforts to
(c)(3) In addition to the above,
prevent, identify, and minimize
the Special IG shall also have
conflicts of interest by its
the authorities provided to IGs in
agents;
section 6 of the Inspector
— (H) the efficiency of
General Act of 1978.
contracting procedures
pursuant to Section 107(b)
(minority and women
contracting).
(b)(2) The CG may audit the
programs/activities of the
TARP, its agents, and any
vehicles established.

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CRS-24
Comptroller General (CG) Special Inspector General
(Section 116)
(IG) (Section 121)
Obligation to
(b)(3) The TARP is required to
No specific provision (although
Respond to Its
take action to address
the Inspector General Act
Audits
deficiencies identified by the
requires agencies to furnish
CG or other auditor engaged by
requested information or
the TARP, or to certify to the
assistance).
appropriate committees of
Congress that no action is
needed.
Audit Space and
(a)(2)(A) The Secretary shall
No specific provision (although
Facilities
provide appropriate audit space
the Inspector General Act
and facilities in the Department
requires agencies to furnish
of the Treasury.
office space and facilities).
Staffing and
No provision (although GAO
(e) The Special IG may (1)
Contracting
will likely use existing staff and
select, appoint, and employ such
contracting authority)
officers and employees as may
be necessary, subject to the
provisions of title 5 regarding
appointments, classification, and
pay; (2) employ experts and
consultants at daily rates not to
exceed GS-15; and (3) enter into
contracts or other arrangements
for audits and studies as may be
necessary.
Access to Data and
(a)(2)(B) To the extent
(e)(4) Upon request of the IG,
Records
consistent with law, the CG has
the head of other agencies shall
access to any information, data,
furnish any requested
reports, papers, or things
information or assistance that is
belonging to or used by the
practicable and not in
TARP, and to officers, agents,
contravention of law. If
advisors, and employees. The
information or assistance is
CG shall be given full facilities
unreasonably refused, the IG
for verifying transactions, and
shall report to the appropriate
may make and retain copies of
committees of Congress without
any records.
delay.

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CRS-25
Comptroller General (CG) Special Inspector General
(Section 116)
(IG) (Section 121)
Appointment,
N/A
(b)(1) The Special IG is to be
Removal, and Pay of
appointed by the President, with
the Auditor
the advice and consent of the
Senate. (2) The appointment is
to be made on the basis of
integrity and demonstrated
ability in accounting, auditing,
financial analysis, law,
management analysis, public
administration, or investigation.
(3) The nomination is to be
made as soon as practicable after
the establishment of any
program under Sections 101 and
102. (4) The IG may be
removed by the President, with
communication of the reason to
Congress. (6) The IG shall be
paid the same as other
presidentially-appointed IGs.
Reports
(a)(3) The CG shall submit
(f)(1) The Special IG shall
reports of findings to the
submit a report to the
appropriate committees of
appropriate committees of
Congress and to the Special IG
Congress summarizing the IG’s
for the TARP at least every 60
activities during the relevant
days. The CG may also submit
period within 60 days after
special reports as warranted by
confirmation and each calendar
GAO’s findings.
quarter thereafter. Each report
shall include a detailed statement
(b)(1) The CG is to annually
of all purchases, obligations,
audit the TARP’s financial
expenditures, and revenues
statements.
associated with any program
under Sections 101 and 102, as
Also, Section 117 requires the
well as information under
CG to determine the extent to
subsection (c)(1).
which leverage and sudden
deleveraging of financial
(f)(2) None of the above
institutions was a factor behind
authorizes the disclosure of
the crisis, including the roles of
information that is prohibited
the Board of Governors, the
from disclosure by law or
SEC, the Secretary, and others.
executive order, or part of a
criminal investigation.
(f)(3) The reports shall also be
submitted to the COP.

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CRS-26
Comptroller General (CG) Special Inspector General
(Section 116)
(IG) (Section 121)
Funding
(a)(2)(C) Treasury shall
(g) Of the funds available to the
reimburse GAO for the full
Secretary of the Treasury under
cost of any oversight activities
Section 118 (from the sale of
as billed by the CG.
securities), $50 million shall be
provided to the Special IG until
(b)(1) Treasury is also to
expended.
reimburse GAO for the full
cost of the audit of the TARP
financial statement.
In both cases, the
reimbursements are credited to
GAO’s “salaries and expenses”
appropriation account and
available until expended.
Termination
(e) Any oversight, reporting, or
(h) The Office of the Special IG
audit requirement terminates on
shall terminate on the later of (1)
the later of (1) the date that the
the date that the last troubled
last troubled asset acquired
asset acquired under Section 101
under Section 101 has been
has been sold or transferred or
sold or transferred or (2) the
(2) the date of expiration of the
date of expiration of the last
last insurance contract under
insurance contract under
Section 102.
Section 102.
(a)(2) Secretary is to provide
the CG with space and facilities
until the termination date in
Section 120 (Dec. 31, 2009,
subject to extension).

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