A fact sheet released by Treasury officials Saturday evening, meant to answer questions about the most ambitious financial markets intervention in our nation’s history, has instead provided a rallying point for those who say the Paulson plan is a bad idea. In particular, a section of the fact sheet suggests that U.S. taxpayers may be on the hook for the bailout of foreign corporations as well as those in the U.S. — a significant change from the language sent to Congress in the Treasury’s original proposal. The finance and economics blog Calculated Risk was first to notice the shift in language, which has sent a chill through many market sources that spoke with HW Sunday morning. “Participating financial institutions must have significant operations in the U.S., unless the Secretary makes a determination, in consultation with the Chairman of the Federal Reserve, that broader eligibility is necessary to effectively stabilize financial markets,” read the fact sheet. See the full Treasury fact sheet. That statement is in direct contradiction to the language in the Treasury’s original proposal, which read: “The Secretary is authorized to purchase, and to make and fund commitments to purchase, on such terms and conditions as determined by the Secretary, mortgage-related assets from any financial institution having its headquarters in the United States.” In other words, the bailout would now extend beyond financial institutions headquartered in the U.S. to any company with “significant operations in the U.S.” Without a definition of what “significant” is; and that vague standard could be undone, too, if agreed upon by the Treasury secretary and chairman of the Fed. Paulson defended the decision to expand the proposed Act’s reach on television Sunday morning, according to a Reuters report. “If a financial institution has business operations in the United States, hires people in the United States, if they are clogged with illiquid assets, they have the same impact on the American people as any other institution,” Paulson is quoted as saying. It’s worth noting that the Act gives Paulson and the next Treasury secretary the right to decisions that are “non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency.” In other words: absolute power, without the checks and balances that have long defined the American system of government. That left those already uneasy with the plan firmly against it, among the sources that HW spoke with. “The Treasury can spend taxpayer dollars to bailout any corporation it wants, here or abroad, without any check or balances,” said one source, a fund manager that requested anonymity. “It doesn’t pass the smell test for me.” Other sources suggested that expanding the reach to foreign corporations signaled a realization of the depth of the problem, but were concerned that officials may yet be underestimating the size of the mess. “I’d have to question if the U.S. government is large enough to tackle a global financial problem of this magnitude,” said the source, a senior banking executive that commented under condition of anonymity. “We’re not really sure where the pricing floor for some assets is, and if you multiply that across global financial markets, it’s certain to be a very large number.”