Tuesday, October 26, 2010

TARP's overseer rips its failures and lack of accountability

A new report from Neil Barofsky, the special inspector general for the Troubled Asset Relief Program in the Treasury Department, says it all: Americans have "entirely legitimate concerns about the lack of transparency, program mismanagement and flawed decision-making processes that continue to plague the program." Under President Obama and his Treasury Secretary Timothy Geithner, the department's management of TARP has made a mockery of the Freedom of Information Act, even as the program has clearly failed to accomplish its stated purposes. Barofsky cites numerous failed TARP goals, including increasing lending, alleviating unemployment, and preserving home-ownership against the foreclosure meltdown. With those failures, the public's confidence in Treasury's ability to repair the economy is sinking faster than the dollar against foreign currencies.

That should be no surprise. Barofsky's blistering report released Monday ticks off a list that would make readers' heads spin: "When Treasury refuses for more than a year to require TARP recipients to account for the use of TARP funds, or claims that Capital Purchase Program participants were 'healthy, viable' institutions knowing full well that some are not, or when it provides hundreds of billions of dollars in TARP assistance to institutions, and then relies on those same institutions to self-report any violations of their obligations to TARP, it damages the public's trust to a degree that is difficult to repair."

A very real question is whether Obama, Geithner or their Treasury accomplices care about repairing public trust. Bloomberg News said yesterday that it asked in a January 2009 FOIA request to Treasury for information on $301 billion in securities owned by Citigroup Inc. that the government had agreed to guarantee. The department gave Bloomberg 560 e-mails so heavily redacted that the legible messages are limited to those saying things like "Did you just try to call me?" and "Monday will be a busy day!" Treasury repeatedly declined to provide more explanation to taxpayers whose money it shoveled to Citigroup, while claiming that disclosure would reveal "trade secrets, personnel rules and practices, memos subject to attorney-client privilege and violations of personal privacy."

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