US Bailout Funds Aided Foreign Firms

Watchdog says TARP spending aided France, Germany
By Rob Quinn,  Newser Staff
Posted Aug 12, 2010 1:21 AM CDT
US Bailout Funds Aided Foreign Firms
Money spent to bail out AIG often ended up in the coffers of its foreign trading partners, according to a new report by the Congressional Oversight Panel.   (AP Photo/Mark Lennihan, file)

A big slice of the $700 billion in bailout funds the US poured into the financial system ended up helping foreign companies, according to a report from a congressional watchdog agency. Because the Treasury Department failed to gather enough information on the flow of money, it ended up taking on risk that should have been shouldered by France and Germany, according to the Congressional Oversight Panel.

"If the US government had gathered more information about which countries' institutions would most benefit from some of its actions, it might have been able to ask those countries to share the pain of rescue," the report states. The panel uses the AIG bailout as a case study, noting that much of the $70 billion in TARP funds the insurer received swiftly ended up in the coffers of its foreign trading partners, reports the Washington Post.

(Read more bailout stories.)

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