(Recasts with added detail on criticism of capital injection)

By Kevin Drawbaugh and Karey Wutkowski

WASHINGTON, Feb 5 (Reuters) - The U.S. Treasury looks to have overpaid financial institutions to the tune of $78 billion in carrying out capital injections last year, the head of a congressional oversight panel for the government's $700 billion bailout program told lawmakers on Thursday.

Elizabeth Warren, a Harvard law professor, said her group estimated the Treasury paid $254 billion in 2008 in return for stocks and warrants worth about $176 billion under the Troubled Asset Relief Program, or TARP.

Warren said the Treasury, under then-Secretary Henry Paulson, misled the public about how it would price them.

"Treasury simply did not do what it said it was doing ... They described the program one way, and they priced it another," Warren said at a hearing before the Senate Banking Committee. She added that Paulson "was not entirely candid" in describing TARP's bank capital injection program.

Members of the committee condemned management of the TARP program, which is barely four months old.

"Implementation ... proceeded in a chaotic, unorganized and ad hoc manner," said Democratic Sen. Daniel Akaka of Hawaii.

Warren said Treasury may have had a reason for paying more for investments than they appear to have been worth at the time of the transaction. "Once again, Treasury needs clear goals, methods, and measurement," she said.