Neal Barofsky, the Inspector General for the TARP program, has been pretty critical in the past of how that money has been used. Now it looks like the Treasury Department is trying to keep the watchdogs at bay:
Specifically, Treasury is considering excluding the special Inspector General — known as “SIGTARP” in bailout circles — from the new $30 billion small-business lending program announced by President Obama in his state of the union address.
The new program — under which community banks would be given access to low interest funds to lend to small businesses — technically is not part of the original TARP, and needs to be approved by Congress. The funding for the program, however, comes from the leftovers of the original $700 billion TARP authorization. And, many of the recipients will be the same — in fact, some $11 billion in TARP funds now held by banks would be eligible for conversion to the new program. And to a large extent, the issues and concerns raised by the programs are identical.
Word of his possible emmuzzlement triggered a sharp response from Mr. Barofsky. In a letter to the Treasury Department, he referred to the proposed exclusion as a “curious change,” one that would be “terribly wasteful and lead to duplicative efforts and, at worst, could lead to significant exposure to waste, fraud and abuse….”
The Obama administration insists that no decision has been made about whether Barofsky will have oversight of the new program, but the fact they’re even debating the issue is telling.
