Bailout Watchdog Opens 20 Criminal Investigations
Posted by John Malloy on 04/21/2009
Watchdog overseeing $700 billion bailout reveals his progress reviewing how money has been spent and calls for changes to prevent fraud.
The top cop tracking the government’s $700 billion bailout program said Tuesday that he has opened 20 criminal investigations and six audits into whether tax dollars are being pilfered or wasted.
Neil Barofsky, the special inspector general overseeing the Troubled Asset Relief Program, released a 250-page report detailing a long list of concerns about government efforts to prop up hundreds of banks, Wall Street firms and auto companies.
Barofsky, whose investigations could lead to criminal charges, told CNNMoney.com in an interview that he wants taxpayers to understand where their money is going. At the same time, he wants to alert officials to weaknesses in TARP that could invite corruption or fraud.
“Our recommendations are forward looking and there are no vulnerabilities that can’t be addressed,” Barofsky said. “The balance of what we’re trying to do is to inform, bring transparency and make appropriate recommendations.”
The report reveals that Barofsky is looking into whether bailout decisions were influenced by those who stood to benefit from them and whether companies receiving bailout dollars are adhering to caps on executive pay.
Barofsky’s report also makes several recommendations to Treasury Secretary Tim Geithner and other officials charged with implementing the bailout. Among them: Require all TARP recipients to detail how they use bailout dollars and safeguard a new mortgage rescue effort against scams.
The backdrop: Bailout rage
The report comes as public outcry over government bailouts is mounting. The Treasury Department is under increasing pressure to protect tax dollars even as it attempts to repair the financial markets – agendas that are often at odds with each other.
Geithner is set to appear Tuesday before a separate congressional watchdog group, the five-member Congressional Oversight Panel, which released its own oversight report two weeks ago.
The overall bailout scrutiny is wearing on the financial sector and, one expert said, has caused confusion over the government’s unprecedented entanglement with the private sector.
“It’s become chic to demand more oversight of how the government is spending money to stabilize the financial system, yet we already have so many oversight entities in place, that it’s hard to say who’s responsible for ensuring how the money is spent,” said Jaret Seiberg, policy analyst at Concept Capital’s Washington Research Group.
Barofsky, in the interview, insisted his goal is to inform the public that someone is minding the store and that bailout programs are not a “black hole.” …
money.cnn.com
Posted by
John Malloy
on 04/21/2009. Filed under
International.
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