Neil Barofsky, Special Inspector General for the Troubled Asset Relief Program (TARP), will likely spend much of his day today on Capitol Hill reporting before a panel of the House Oversight Committee outlining a recently released 260-page report concerning a laundry list of his concerns linked to the federal government’s effort to help struggling financial institutions. Tapped with safeguarding the $700 billion in TARP funds, Barofsky’s chief concern is that federal officials are discounting his suggestions regarding the prevention of the tax dollars being wasted and/or fraudulently appropriated. Unwilling to implement a number of Barofsky’s recommendations, the Treasury Department is heavily criticized in the report.
The report states that, “Although Treasury has taken some steps towards improving transparency in TARP programs, it has repeatedly failed to adopt recommendations that SIGTARP believes are essential to providing basic transparency and fulfill Treasury’s stated commitment to implement TARP ‘with the highest degree of accountability and transparency possible.’ ”
Barofsky’s report references two specific examples the Treasury Department has ignored:
• To impose recipients of bailout funds to document exactly how TARP funds are spent
• To establish a “firewall” to pull the plug on investment managers from capitalizing from insider information
Barofsky’s office, established less than a year ago as a part of the TARP program, has already initiated 35 investigations ranging from criminal to civil allegations of securities fraud, accounting fraud, public corruption and insider trading. These charges accuse the perpetrators of fraudulently profiting from taxpayer dollars associated with the TARP program.
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