U.S. Treasury to Hire Private Contractors to Spend
Bailout Billions 03 Oct 2008 The U.S. plans to
hire five to 10 asset-management firms as Secretary Henry Paulson establishes
the government's new office for handling the financial bailout, a Treasury
official said. The department will also add about two dozen new employees, a mix
of bankers, lawyers, accountants and others, the official said today on
condition of anonymity. Some of the Treasury's new employees will be on the
government payroll, while others will be contractors, the official said.

'It
is a move reminiscent of the US government's controversial use of private
military contractors to fight the war in Iraq.' Bail-out leads to conflict of interest claims as Wall Street
financiers cash in on crisis 04 Oct 2008 New questions
have been raised about the $700 billion economic bail-out of the US economy as
President [sic] George W. Bush warned that the world may have to wait weeks for
the benefits of the rescue package to be felt... Doubts about the package were
fuelled when financial experts warned that conflicts of interest could arise
because Wall Street financiers, many of whom have been blamed for causing the
financial meltdown in the first place, will have a hand in
spending the $700 billion of taxpayers' money... Between five and 10
asset management companies will also be paid a commission on the work they do.
They can expect to make several billion dollars in profits between
them.

Officials
Refuse to Provide Details on Secret Previous Bailout --Fed Made $30 Billion
Deal to Manage Assets of the Collapsed Bear Sterns 01 Oct 2008 Top
government officials are refusing to provide details on a secretive deal it made
to manage billions in assets from an earlier bailout. Sen. Charles Grassley,
R-Iowa, has been pressing top officials for months to provide details on a deal
the Federal Reserve made for a private firm to manage $30 billion in financial
assets from the collapsed investment bank Bear Stearns, as part of an
arrangement to facilitate J.P. Morgan Chase's purchase of the bank in March. The
Federal Reserve announced at the time that it had contracted with BlackRock
Financial Management Inc. to manage the assets. Since then, it has declined to
share any further details on the arrangement with anyone � not reporters, not
the public, and not Sen. Grassley.

A.I.G. Uses $61 Billion of Fed
Loan --A.I.G. chief
executive: In addition to using the $85 billion Fed loan, A.I.G. would
be able to participate in the $700 billion bailout program signed into law by
President [sic] Bush on Friday. 04 Oct 2008 The American International
Group said on Friday that it had already drawn down $61 billion of the $85
billion emergency bridge 'loan' it received from the Federal Reserve two weeks
ago, an announcement that startled credit ratings agencies. A.I.G.�s chief
executive, Edward M. Liddy, said A.I.G. would keep a continuing ownership in its
foreign life insurance businesses, most of which operate in Asia. Other than
that, he said, virtually everything else under A.I.G.'s corporate umbrella was
for sale. Mr. Liddy said it was impossible to say exactly how much money A.I.G.
would have to raise to pay back the Fed and emerge from its crisis... "It's kind of a Rubik's Cube," he said. [No problem.
We're ready to solve the puzzle for you.]

SEC backs down on short-selling disclosure rule --U.S.
regulator extends short-sale ban pending bailout bill becoming law 04 Oct
2008 The Securities and Exchange Commission backed down on a major part of its
effort to limit short selling. Late Wednesday, the regulator said that
institutional investors' short positions won't be made
public, a major change from an earlier ruling that had upset several prominent
hedge-fund managers and short sellers including James Chanos. Chanos, head of
leading short-selling hedge-fund firm Kynikos Associates LP, said at the time
that forcing such public disclosure would be like asking Coca-Cola to reveal the
super-secret formula for its popular fizzy beverage.

Govt. Uses
Contractors to Probe Iraq Contractors --State Dept. Move to Let Contractors
Probe Complaints Over Other Contractors May Be Is Illegal 03 Oct 2008 In an apparent
violation of federal regulations, the State Department has outsourced to private
contractors the responsibility to investigate possible crimes committed by
security contractors in Iraq. Earlier this year, the State Department's Bureau
of Diplomatic Security hired the private firm U.S. Investigations Services
(USIS) to fill positions in the newly created Force Investigation Unit (FIU)
that investigates potential misuses of force against civilians by U.S. security
contractors... According to a contract obtained by ABC News, the company was
hired to supplement Diplomatic Security personnel. However, the eight USIS
contractors hired for the team represent the majority of the full-time team, an
apparent violation of federal regulations that prohibit such work by
contractors.