Bailout Scandal Expands w/ 20 TARP Fraud Probes
by bobswern, Tue Apr 21, 2009 at 09:07:18 AM EDT
Well, now we know the real reasons as to why Bernanke, Summers and Emanuel were all over the Sunday talk shows telling us why they won't be needing any more TARP (Troubled Asset Relief Program) money. It's simple, really. After today's report hits the Hill from Bailout Inspector General Neil Barofsky's office, the administration doesn't stand a snowball's chance in hell of getting another cent.
And, with the announcement that Barofsky's initiating no less than 20 civil and criminial fraud investigations, as well, I'd even go as far as to say that some heads are gonna' roll.
In what may only be described as a scathing, brutal indictment of the Federal Reserve's and the Treasury Department's management of the Wall Street bailout to date, the New York Times front page for Tuesday tells us how Bailout Inspector General Neil Barofsky's latest report, scheduled for release later today, no less than slams U.S. government bailout efforts, especially with regard to the "public-private investment partnerships," calling them: "...inherently vulnerable to fraud and should not be started without stronger safeguards."
Here's the story on the I.G.'s report. You really should read it! Programs to Help Banks Are Seen as Open to Fraud.
Frankly, I don't see how Secretary Geithner and Fed Chair Bernanke are going to be able to defend their job performance after this story circulates. Meanwhile, Geithner's due up on the Hill for testimony today, too. Should be quite a circus.
Programs to Help Banks Are Seen as Open to Fraud
By EDMUND L. ANDREWS
Published: April 21, 2009
WASHINGTON -- The Treasury Department's most ambitious plans to rescue troubled banks -- partnerships between the government and private investors, backed by the Federal Reserve -- are inherently vulnerable to fraud and should not be started without stronger safeguards, a top government investigator warned in a report to be released Tuesday.
The report also warned that the Treasury's $700 billion Troubled Asset Relief Program has evolved into a $3 trillion effort of "unprecedented scope, scale and complexity" and comes with too little oversight and too little information about what companies are doing with the taxpayer money they are getting.
Noting the widespread public outrage unleashed over the Treasury's huge payments to the American International Group, the failing insurance conglomerate, Mr. Barofsky warned that Treasury officials were jeopardizing the credibility of their efforts by not requiring companies to disclose far more about their use of taxpayer money.
"Failure to impose this requirement with respect to the injection of yet another $30 billion into A.I.G. would not only be a failure of oversight, but could call into question the credibility of the government's efforts..."
As we also learn from The Hill, Barofsky's report is just the tip of the iceberg. Here's the deal on his announcement that he's commenced 20 civil and criminal fraud investigations: Bailout's top cop probes twenty TARP fraud cases.
Bailout's top cop probes twenty TARP fraud cases
By Silla Brush
Posted: 04/21/09 12:01 AM [ET]
Neil Barofsky, the top watchdog over the government's financial bailout efforts, is pursuing 20 civil and criminal investigations into potential fraud in the programs.
His office already has served subpoenas in connection with criminal investigations, but declined to comment about the specifics of any investigations. Just applying for TARP makes any firm a potential subject of a case.
"We've received criminal investigation referrals as well from Congress that we're looking into," added Barofsky.
In addition to the 20 investigations, his office has opened six audits into, among other issues, the role of outside lobbying and other influences in winning federal money; the $165 million in bonuses at insurance firm AIG; Bank of America's participation in four different government programs; and an overview of how the banks receiving equity from the government have used that money.
He is working with the FBI, the Securities and Exchange Commission and other federal agencies to set up a TALF task force to root out fraud. He said he is looking into a similar effort on the PPIP program. "Once a fraud like this takes root, it can really spread very quickly and then all you're doing is reacting," he said.
Barofsky has moved to Washington full time and, considering that some of the programs will be around for five or more years, he knows he is in for the long haul.
"I think we're going to be around for a long time," he said.
First Elizabeth Warren and now Bailout I.G. Neil Barofsky have been charged with oversight of these matters and they've both come to the same conclusions.
Looks like the shit's hit the fan.
Need I say anything else?
What do you say?