Circumventing Logic

Jillian Bandes
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Posted: Apr 04, 2009 12:09 PM
The Washington Post reports that Obama is circumventing the restrictions that apply to bailout money by working with ghost companies that act as middlemen between the government and the bailout recipients.

This is completely insane. 

The administration believes it can sidestep the rules because, in many cases, it has decided not to provide federal aid directly to financial companies, the sources said. Instead, the government has set up special entities that act as middlemen, channeling the bailout funds to the firms and, via this two-step process, stripping away the requirement that the restrictions be imposed, according to officials.

Although some experts are questioning the legality of this strategy, the officials said it gives them latitude to determine whether firms should be subject to the congressional restrictions, which would require recipients to turn over ownership stakes to the government, as well as curb executive pay.