Paulson needs to be prosecuted - he runs his own agenda right from the beginning

Excerpt from CNBC

US Treasury Secretary Henry Paulson on Tuesday said the unpredictable nature of the current financial crisis meant it was necessary to ensure that financial bailout money was not diverted to other uses.

In testimony for delivery to the House Financial Services Committee, Paulson said the $700 billion Troubled Asset Relief Program, or TARP, was intended shore up the financial system and said there were other efforts under way to help homeowners avoid preventable foreclosures.

"While I understand the interest in spending TARP resources on other approaches, the efforts already under way will do more to prevent foreclosures than might have been achieved through very large purchases of mortgage-related securities through the TARP," he said.

Paulson faces a grilling over a decision to use TARP funds for recapitalizing financial institutions instead of buying bad or so-called toxic assets as was originally proposed.

Excerpt

http://www.bloomberg.com/apps/news?pid=20601087&sid=ask7NL3CnYq4&refer=home

Representative Barney Frank, who heads the House panel, cut off Paulson during the question-and-answer session, saying ``the bill couldn't have been clearer'' in also being aimed at reducing foreclosures. Paulson told lawmakers he has no plans to use the second half of the $700 billion program, indicating it will be up to the incoming Obama administration to resolve the matter.

``We don't have a lot of time and I don't usually do this,'' Frank said in interrupting Paulson during an exchange on how to deploy TARP cash. ``I read sections of the bill that says -- write it down -- give them assistance,'' Frank, a Massachusetts Democrat, told the Treasury chief.

Representative Carolyn Maloney, a New York Democrat, urged using the funds ``to stabilize housing,'' and others on the panel emphasized the strain households are under as the economy has weakened.

Bair's Mortgage Plan

Paulson resisted pressure from lawmakers to commit to implementing a foreclosure-prevention program proposed by Federal Deposit Insurance Corp. Chairman Sheila Bair.

...

``There is a balance to getting money for those who need it as opposed to those who don't need it,'' Paulson told the panel. ``There's also a balance to not providing a windfall to the banks.''

It's interesting -- why did Goldman receive a huge package without any loss so far in its quarterly earnings? Paulson wanted immunity to be guaranteed in his first TARP white paper - now we know why because his idea was to screw around right from the beginning. It was a mistake to make the Ex-CEO of Goldman, who is partly responsible for this mess, to oversee this issue anyway - that's as much conflict of interest as it gets.

``It appears that you seem to be flying a $700 billion plane by the seat of your pants,'' Representative Gary Ackerman, a New York Democrat, said to Paulson. ``It seems to be the second-largest bait-and-switch scheme that history has ever seen, second only to the reasons given to us to vote for the invasion of Iraq.''