The US decision to pour billions of taxpayer dollars into the economy likely propped up foreign firms as well as their US counterparts, a Congressional watchdog said Thursday.
The Congressional Oversight Panel said firms from Europe to Asia benefited from the 700-billion-dollar bailout signed into law in 2008 by then-president George W. Bush, as it pressed the Treasury Department to better monitor flows.
The panel -- tasked by Congress with policing so-called TARP payments -- said US taxpayers may have been shortchanged, as other governments targeted aid to a handful of domestically focused firms.
"It appears likely that America's financial rescue had a much greater impact internationally than other nations' programs had on the United States," said a report.
The bailouts of insurance giant AIG, Goldman Sachs and General Motors were all named at examples of firms whose aid might have helped firms abroad.
"Banks in France and Germany were among the greatest beneficiaries of AIG's rescue, yet the US government bore the entire 700 billion dollar risk of the AIG capital injection program," the panel said.
"Approximately 61.6 billion dollars of TARP and other government funds received by the company went to foreign institutions and governments."
The panel said tracked some AIG aid that was used to pay Goldman Sachs, who in turned paid 31 firms from across the globe.
Germany's DZ Bank and Spain's Banco Santander each received over a billion dollars from US aid.
In other instances GM bailouts were said to have helped Italian car maker Fiat and General Motors' aid helped sales in China.
The watchdogs pressed the US government to monitor flows from the bailout.
"The Panel strongly urges Treasury to start now to report more data about how TARP and other rescue funds flowed internationally and to document the impact that the US rescue had overseas."
The panel is led by Elizabeth Warren, who is tipped by many to become the head of a newly created Consumer Protection Bureau.
Copyright 2010  AFP Global Edition
