SIGTARP Neil Barofsky

Treasury Secretary Timothy Geithner will appear before the Congressional Oversight Panel--the five member group set up by Congress to evaluate the Treasury's implementation of TARP funds--later today.  Geithner will not only be answering questions raised in COP's latest report , but will also have to address the findings of one Neil Barofsky.  Barofsky is better known as SIGTARP: the special inspector general for the Troubled Asset Relief Program.  This morning Barofsky released a 250-page report full of concerns over the federal government's bailout actions to date.  In the report, he calls for more transparency fromt he government on where the money is going, and pushes for recipients to report clearly how they are using the funds:

SIGTARP continues to recommend that Treasury require all TARP recipients to report on the actual use of TARP funds in the manner previously suggested. This recommendation is particularly important with respect to the potential expansion of the Capital Purchase Program (“CPP”) to include large insurance companies. The American people have a right to know how their tax dollars are being used, particularly as billions of dollars are going to institutions for which banking is certainly not part of the institution’s core business and may be little more than a way to gain access to the low-cost capital provided under TARP. Similarly, in light of the controversy surrounding AIG’s use of Government assistance, both through the paying of bonuses and in its dealings with counterparties, failure to impose this requirement with respect to the injection of yet another $30 billion into AIG would not only be a failure of oversight, but could call into further question the credibility of the Government’s efforts with respect to the assistance provided to AIG. This recommendation applies not only to capital investment and lending programs involving banks and other financial institutions, but also to programs in which TARP funds are used to purchase troubled assets, including details of each transaction in the Public-Private Investment Program (“PPIP”) as well as all transactions concerning the surrender of collateral (including the identity of the surrendering borrowers) in the Term Asset-Backed Securities Loan Facility (“TALF”).

Barofsky also reports that he has opened 20 criminal investigations and six audits into the potentially wasteful spending (misdirected funds) of TARP dollars.  The New York Times provides the full report here.