Trillions In TARP $$$: Who's Minding The Money?

From an ABC reporter on Capitol Hill:

Six months after the Troubled Asset Relief Program was signed into law, lawmakers and oversight officials, worried about trillions of taxpayer dollars at stake, said Tuesday that the Treasury Department has not resolved problems with the program's accountability, transparency, or communications strategy. One watchdog even said the Department has not cooperated with oversight efforts up to this point.

"Our concern right now is that we do not seem to be a priority for the Treasury Department," the Congressional Oversight Panel's Elizabeth Warren told a Senate Finance Committee hearing today. "We have sent letters. We have requested that there be someone named so that we can get technical information. And so far, we have not been a first priority."

"I'm talking about accountability in a very real sense of this word," she said later. "As I see it, you really have two options here. Either you get Treasury to get some religion on this point -- and put their own standards in place, or Congress is forced to step in. We will do everything we can on your behalf, as your congressional oversight panel, but what we can best do for you now is to identify and pinpoint that this is precisely where the problem starts. And then the problem has roll down effects all the way through the system of lack of accountability, complexity that no one can figure out what's going on, so that we never identify the place where we need to start the solution."

Neil Barofsky, Special Inspector General for the Troubled Asset Relief Program, voiced similar concerns. He noted that his office just conducted a survey of all 364 TARP recipients on their use of government funds, something they had requested Treasury do, only for the Department to decline to do so except for Citigroup and Bank of America.

"One thing is clear: complaints that it was impractical, impossible, or a waste of time to require banks to detail how they used TARP funds were unfounded," Barofsky said. "The survey strongly supports my earlier recommendation to Treasury. Banks can and should be required to report on their use of taxpayer money to provide maximum transparency and not simply be asked to report on the possible impact of the funds, such as giving only lending activity."

Barofsky also expressed concerns because his office now has to monitor nearly $3 trillion.

"$2.9 trillion is just short of what the entire federal government spent in fiscal year 2008," noted committee chairman Max Baucus. "It's like having a second United States government budget dedicated solely to saving the financial system, and that is truly surreal."

Baucus cautioned that this number could skyrocket to $7 trillion when other measures are added, such as $3 trillion in Federal Reserve programs, Treasury's $400 billion support for Fannie Mae and Freddie Mac, and the administration's budget request for a placeholder worth up to $750 billion.

"If all these additional amounts materialize, taxpayers could be on the hook for a total of more than $7 trillion," Baucus said. "This is a huge, unprecedented financial commitment. It strains the comprehension of taxpayers and policy-makers alike."

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