Remember the auto bailout? It’s not in the front pages anymore, but last week the Congressional Oversight Panel — a body created by statute to oversee TARP spending — issued a comprehensive and critical report on Washington’s foray into Detroit.

The headline news, reported in most major media: the money won’t be paid back, not in full anyway. Even if the firms return to viability, taxpayers — said the panel — will likely never be able to recoup anywhere near all of the $77 billion or so they have put in them. That conclusion, however, was hardly surprising — most observers long ago wrote off hopes of taxpayers breaking even on the bailout deals.

Of more interest was the criticisms leveled by the bi-partisan panel — chaired by Elizabeth Warren of Harvard Law School — of the way the program was (and is) run. Among these: a failure to define the goals or critieria for the bailout, lack of transparency, and a lack of an exit strategy — leaving the question of when (if ever) the government will be selling its ownership stakes in GM and Chrysler. The report also questioned the government’s ability — as part-owner of these firms in a competitively-neutral hands-off manner, recommending that ownership be transferred to an independent trust.

The panel also provides the most comprehensive discussion to date of the legality of the bailouts. Since the law creating TARP limits funding to “financial institutions,” many (including some of us here) have argued that there was no legal basis to provide aid to the auto companies. Stopping just short of flatly declaring the whole affair illegal, the panel requested a legal opinion from the Treasury Department on the question.

Panel member Jeb Hensarling, a congressman from Texas, dissented from the report, arguing for a firmer statement on illegality, while pointing out the government’s abuses of the bankruptcy process and calling for an end to TARP itself.

The report, as well as the dissent, are essential reading for anyone who doubts the pitfalls inherent in government bailouts. The question is whether anyone will really listen.