There will time later to assess who’s ahead and who’s behind in the coverage of the financial crisis and the unprecedented scandal it represents, but for now it is important for all news organizations to put aside their rivalries and do one thing: Join the Bloomberg lawsuit.

On Friday, Bloomberg LP, in the finest traditions of American investigative reporting, sued the Federal Reserve Board’s governors for public records that would answer two simple questions: Who is receiving $2 trillion in Fed loans and what kind of collateral are taxpayers getting to support them?

No, that’s not a typo. That’s trillion, with a “t.”

And, yes, as hard as it is to believe, taxpayers don’t know the identity of the borrowers to whom they are lending. They also don’t know what kind of junk—stocks? CDOs? Three milk cows and a ’69 Camaro?—they’re getting to support the federal loans.

A PDF of the suit is here. Business news organizations should file amicus briefs or otherwise help out.

As Bloomberg wrote yesterday in another hard-hitting and useful bailout report:

Nov. 10 (Bloomberg) — The Federal Reserve is refusing to identify the recipients of almost $2 trillion of emergency loans from American taxpayers or the troubled assets the central bank is accepting as collateral.

Unbelievable. But true!

Listen, one can argue about whether the Fed’s loan program is wise or not, though most people think it is.

But it seems beyond argument, now that the Treasury’s vaults have been thrown open, that taxpayers should know who is getting these loans. Likewise, it is axiomatic that taxpayers should be able to see the collateral, especially given the virtual certainty it will be worth far less than the cash they are lending. The taxpayers’ exposure here is enormous.

For those of you just joining the transparency party, just a couple of words of background: The $2 trillion in loans discussed in the Bloomberg story and the subject of its suit are separate and apart from the $700 billion bailout, also known as the Troubled Asset Relief Program, passed by Congress in October. That bailout at least has some measure of transparency—one knows at least which banks are getting capital—and safeguards to ensure that taxpayers’ investment is secured.

The Fed lending program is different. As the Bloomberg suit explains, before August 2007 the Fed typically loaned money to regular banks for very short periods of time, requiring gold-leaf collateral, and had about $1 million in loans outstanding at any one time. Come the financial crisis, the Fed added three new lending programs and dramatically eased terms and dropped collateral standards, opening the loan spigot. By the first week of October, the Fed had average lending of more than $400 billion. Now, of course, the figure is much higher.

One hears quite often that such numbers are unprecedented, and it is all too true.

In return, banks handed over collateral of unknown, and one can only assume, poor quality. The gap between amount loaned and the amount the collateral is worth is the amount the taxpayers may have to pay if banks can’t make good on these loans.

As the Bloomberg suit says:

The government documents that Bloomberg seeks are central to understanding and assessing the government’s response to the most cataclysmic financial crisis in America since the Great Depression. The effect of that crisis on that American public has been and will continue to be devastating. Hundreds of corporations are announcing layoffs in response to to the crisis and the economy was the top issue for many Americans in the recent elections.

Dean Starkman writes and edits The Audit. He is CJR's Kingsford Capital Fellow.