Give GW some credit; he got one right. Appointing a prosecutor to a regulatory oversight function is usually going to mean a lot of audits. Egggsssaaaactly. Neil Barofsky is the Treasury's Special Inspector General of TARP appointed by George W. Bush to serve several watchdog functions. Barofsky works in concert with Elizabeth Warren but operates independently of her congressionally appointed commission.
I'm still endeavoring to determine what kind of actual power Barofsky wields with his charter at Treasury. (He works in the same building as Geithner. The enemy within.) Odds say he is ultimately toothless not unlike Elizabeth Warren and the panel she chairs, but it does not preclude him from making some noise occasionally. And he did today.
First some background from the NY Post on his appointment.
And now from Bloomberg today:
The Treasury’s chief watchdog for the U.S. financial rescue program is probing whether American International Group Inc. paid more than necessary to banks including Goldman Sachs Group Inc. after the insurer’s bailout.
Neil Barofsky, special inspector general for the Troubled Asset Relief Program, began an audit last week into whether there were attempts by New York-based AIG or the government to reduce the payments, according to an April 3 letter to Representative Elijah Cummings. The Maryland Democrat requested the probe last month along with 26 other members of Congress.
“To what extent did AIG pay counterparty claims at 100 percent of face value and was any attempt made to renegotiate and close out these claims with ‘haircuts?’” Barofsky wrote. “Questions concerning whether AIG paid more than necessary to counterparties and whether Treasury adequately monitored such payments are clearly relevant.”
Barofsky will also examine if there was any review about the ability of banks “such as Goldman Sachs” to sustain losses on the swaps, he said in the letter.
The Government Accountability Office said last month that the Treasury should demand that AIG seek concessions from banks as a condition of the latest U.S. aid.
“If such concessions are not considered to be in the government’s interest, the reasons should be clearly articulated and explained,” the congressional auditors said.
bank bailouts, bailouts, bailout news