The Obama Administration promised unprecedented transparency in its financial recovery efforts, including a gee-whiz $18 million web site, Recovery.gov.

The problem is that the Administration seems addicted to secret back-channel orders to the private sector to obey, “or else”.

Yesterday’s Wall Street Journal reports on a secret “memorandum of understanding” that apparently orders Bank of America to replace a majority of its board of directors (after already replacing former Chairman Ken Lewis). And the Financial Times reports that Citigroup is near a “secret deal” with the FDIC to restructure its operations and board. Citi’s secret deal with FDIC would apparently be in addition to an existing undisclosed agreement with another banking regulator, the Office of the Comptroller of the Currency (OCC). Citi, at least, appears about to fall subject to double secret probation.

Like Dean Wormer in Animal House, federal regulators appear to prefer cloaking their restructuring orders to the private sector in secret. Maybe Citi needs to have a toga party.