We at The Audit continue to be impressed with Bloomberg News’s aggressive accountability journalism. Its pursuit of transparency in the government bailout, for one, has been second to none.

Today it has two great stories on the murky nexus between government and business, including one that blasts at the excesses and opacity of the government’s private contracting, which totaled $370 billion last year.

The news service found the government paying out huge bonuses to contractors whose services failed:

A year later, in July 2006, the U.S. Treasury Department abandoned the project. The computer didn’t work. The department had spent $14.7 million — a 65 percent increase above the original budget — for nothing.

There was a final ignominy: Under the terms of the contract, Electronic Data Systems Corp., the vendor, collected a bonus of $638,126…

In 2007, military radio maker Harris Corp. developed a hand- held computer for the 2010 census that failed to work in tests in a California heat wave. Still, the Commerce Department’s Census Bureau awarded Harris $14.2 million in bonuses in a contract that more than doubled in price to $1.3 billion from $600 million, according to federal investigators.

I like how Bloomberg is confident enough in its reporters to let them come out and say something’s screwed up rather than making them attribute it to “experts”:

With contracting, he faces a mismanaged system that accounts for almost 40 cents of every federal dollar spent outside of mandatory obligations such as Social Security and Medicare.

And this:

In many cases, bureaucrats are motivated to give millions of dollars in bonuses to contractors no matter how poorly a company performs because generosity with taxpayer money may help them land better-paying jobs after they leave the government.

Well, yeah! That’s why we need serious restrictions on that revolving door. Obama’s restricting his staff from every lobbying his administration is a great start.

Bloomberg’s investigation also found that the public’s right to know where its money is going is restricted:

Just as taxpayers can’t find out how the Treasury and the Federal Reserve used the first half of the bank bailout, Americans are often denied access to public records that provide details on how hundreds of billions of taxpayer dollars are spent in contracts.

Bloomberg News filed Freedom of Information Act requests with the Treasury Department, the Commerce Department and the Fed asking for documents on the bailout and routine contracts.

As of Jan. 12, seven months after receiving the first request, the three agencies had provided incomplete documents with blacked-out words or nothing at all.

But I see this time and time again—Bloomberg’s editing just can’t keep pace with its good reporting. Hey, Pearlstein: Hire some editors over there!

That story is just choppy, but if you want a stark example of what I’m talking about regarding editing, read these three paragraphs in the second transparency story:

Lucy Dalglish, executive director of the Arlington, Virginia-based Reporters Committee for Freedom of the Press, said “People are trying to get a handle on where the money went and how it’s being used. One would hope that we’ll get to see something. Personally, I want to know what my tax dollars are being used for.”

Consumer confidence fell in January to the lowest since records began in 1967, the Conference Board said Jan. 27. Home prices plunged 18.2 percent in November from a year earlier, the biggest drop since the data was started in 2001, according to the S&P/Case-Shiller index that covers 20 metropolitan areas.

$301 billion

Citigroup’s guarantee package, completed Jan. 16, totals $301 billion. It kicks in after the bank goes through its $9.5 billion in current loan loss reserves and the first $29 billion of losses. The government also gets $1 billion of the bank’s benefit from hedging contracts. The Treasury, the Federal Deposit Insurance Corp. and the Fed then assume 90 percent of losses from those assets.

What does that second graph have to do with the ones around it?

Look past that, though, because it’s a worthy story challenging Obama’s promised transparency. Bloomberg has asked the government to reveal exactly what kind of trash securities it has guaranteed for Citigroup and Bank of America (to the tune of $419 billion).

It’s been three days and counting and no answer. Now it’s filed a Freedom of Information Act request for the information.

For those of you who have forgotten, Bloomberg is no shrinking violet on this kind of stuff. It’s suing the government to reveal which banks got $2 trillion in emergency loans.

Why should we care about what’s in these guarantees? Here’s your answer:

Merrill Lynch & Co., which was bought by Bank of America, was the underwriter for $49.4 billion in defaulted collateralized debt obligations, the most of any bank, since October 2007, according to data compiled by Standard & Poor’s and Bloomberg.

Merrill was the biggest CDO underwriter from 2005 to 2007, with more than $102 billion, said Sanford C. Bernstein & Co. research analyst Brad Hintz.

Since October 2007, Bank of America underwrote under its name $15.1 billion in failed CDOs, according to S&P and Bloomberg. Banks have so far understated losses on such securities, and “the tsunami is on the horizon,” Hintz said.

Past sales of CDOs valued them at pennies on the dollar. In July, New York-based Merrill sold $30.6 billion of the securities to an affiliate of the Dallas-based investment firm Lone Star Funds for $6.7 billion. Merrill provided financing for about 75 percent of the purchase price, and the sale valued the CDOs at 22 cents on the dollar.

“By June, it’ll become clear that these guarantees are being drawn and they’re going to be huge,” said Christopher Whalen, managing director of Institutional Risk Analytics, a financial-services research company in Torrance, California. “Every day that goes by, Congress figures it out just a little more.”

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Ryan Chittum is a former Wall Street Journal reporter, and deputy editor of The Audit, CJR's business section. If you see notable business journalism, give him a heads-up at rc2538@columbia.edu. Follow him on Twitter at @ryanchittum.