Via USA Today, TARP IG Neil Barofsky has some harsh words for the way the TARP funds have been handled:
A Treasury Department watchdog is warning that a key $700 billion bailout program has damaged the government’s credibility, won’t earn taxpayers all their money back and has done little to change a culture of recklessness on Wall Street.
“The American people’s belief that the funds went into a black hole, or that there was a transfer of wealth from taxpayers to Wall Street, is one of the worst outcomes of this program, and that is the reputational damage to the government,” said Neil Barofsky, special inspector general of the Troubled Asset Relief Program (TARP), in an interview.
“We don’t even know where the money went,” says Rep. Daniel Lipinski, D-Ill., who recently called for TARP assistance to end in December, when it’s set to expire. The Treasury has the authority to extend the program until next October.
The report criticized Treasury’s implementation of the program and its lack of transparency, making 41 recommendations, 18 of which were implemented. Barofsky says it’s “extremely unlikely” that taxpayers will recover the $77 billion committed to the ailing auto industry or the $60 billion in TARP assistance to American International Group as part of a pledge of up to $180 billion in aid. An additional $50 billion to modify unaffordable home mortgages “will yield no direct return.”
I counted myself among the supporters of TARP as it was described and sold to the public; i.e., as a program whereby the government would purchase troubled assets that were causing liquidity problems that threatened economic stability. Neither I nor anyone else I have ever met supported the way TARP has been implemented; as a massive slush fund boondoggle for corporations favored by the White House. And now, mere months after throwing all this money around, the oversight body for the program is frankly admitting that we’re never going to see most of this money ever again (but in exchange, we did buy government control over Corvette production!). What a crock.
Democrats in Congress have a chance to end Geithner’s reckless control over billions of dollars of taxpayer money, but they must act fast. My guess is that they’ll be too busy trying to give the Obama administration control over trillions more taxpayer dollars through his healthcare plan to even try.