A couple months shy of its first birthday, the Troubled Asset Relief Program (TARP), is verging on toddlerhood. Born as a hard-to-understand yet arguably targeted $700 billion program to purchase toxic assets, the sprawling federal bailout of the financial system, has grown to a dozen different programs representing nearly $3 trillion in risk to the taxpayer. And according to a recent report by the TARP Special Inspector General (SIGTARP), in spite of this amazing growth, just like a toddler, the program is still hard to understand because it remains shrouded in secrecy.

Stepping beyond just the bailout, the potential scope of the federal government involvement in the economy is staggering. If you take the maximum taxpayer risk in all the support provided to the financial system – TARP, Federal Reserve lending , Federal Deposit Insurance Commission, and other agencies – you reach a staggering number – $23.7 trillion. To be sure this is a beyond worst case number that assumes each entity taps every dime possible under the various programs and that taxpayers receive no value for assets purchased, but it is also a statement as to the size of the pile of chips the government has pushed into the pot. To date SIGTARP reports the aggregate level of support has been $4.7 trillion – $1 trillion more than the annual federal budget.

Unfortunately for taxpayers, we're still in the dark about our balance sheet. Special Inspector General for TARP, Neil Barofsky, testified to Congress that, Treasury “has repeatedly failed to adopt recommendations that … are essential to providing basic transparency” in TARP. He listed several recommendations ranging from reporting on the valuation of the assets in the TARP portfolio to requiring banks to report how they are actually using funds.

SIGTARP has put its money where its mouth is and conducted an audit of more than 360 banks that received a total of as much as $200 billion in bailout funds. Treasury argued that because money is fungible it is impossible to figure out where the additional money has gone. Working with the banks, however, SIGTARP documented that more than 80 percent of the respondents said the funds enabled them to continue or to increase lending and more than 40 percent added to their capital reserves to cushion against future losses. Some banks used the funds to pay off other loans, and some even acquired other financial institutions. Obviously there are limitations on the study. For instance, banks were self-reporting and weren't required to specify how much money was spent on increased lending. But no matter, Treasury is still firmly against providing this data.

Barofsky also pointed to another troubling possibility. One of the myriad TARP programs is the Public-Private Investment Fund (PPIF), where Treasury has hired managers to purchase illiquid securities. SIGTARP is arguing that the firms conducting this activity must erect firewalls between the PPIF mangers and those working on the private side of these same firms to prevent any insider trading or advantage for the lucky few firms managing the PPIF portfolios. In addition, SIGTARP argues that information on holdings, trading activity, and asset valuation should be disclosed. They argue that failure to do this puts the public’s “fragile trust” in Treasury and the government at risk.

Since its inception, Treasury has promised to run TARP “with the highest degree of accountability and transparency possible.” Well, it is pretty clear to us, and anyone reading the SIGTARP report, that much more accountability and transparency is possible.

In testimony, Barofsky argued, “Treasury’s default position should always be to require more disclosure rather than less and to provide the investors in TARP — the American taxpayers — as much information about what is being done with their money as possible.” We couldn’t agree more. It’s time for Treasury and TARP to grow up and level with the public.