Officials Aim to Help Firms Avoid Bailout Restrictions

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By Amit R. Paley and David Cho

Washington Post Staff Writers
Saturday, April 4, 2009

The Obama administration is engineering new bailout initiatives in a way that it believes will allow firms benefiting from the programs to avoid restrictions imposed by Congress, including limits on lavish executive pay, according to government officials.

Administration officials have concluded that this approach is vital for persuading firms to participate in programs funded by the $700 billion financial rescue package.

The administration believes it can sidestep the rules because, in many cases, it has decided not to provide federal aid directly to financial companies, the sources said. Instead, the government has set up special entities that act as middlemen, channeling the bailout funds to the firms and, via this two-step process, stripping away the requirement that the restrictions be imposed, according to officials.

Officials Aim to Help Firms Avoid Bailout Restrictions - washingtonpost.com

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