pahunkboy
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07-01-2010: Big Companies Allowed to Monitor Their Own Compliance with Bailout Rules
Neil Barofsky, the special inspector general for the Trouble Asset Relief Program (TARP), does not think much of the way the Department of the Treasury has stayed on top of financial institutions that were bailed out by the government during the financial crisis. In exchange for receiving billions of dollars in taxpayer money (categorized as “exceptional assistance”), participants in TARP agreed to comply with certain conditions, such as those involving executive compensation, expense policies and lobbying. But instead of gathering data on these subjects itself, the Treasury Department has relied on the businesses themselves to report any failures to meet TARP rules. Barofsky’s latest report states: “Treasury relies entirely upon TARP recipients themselves (in some cases upon the same managers who presided over companies as they reached the brink of failure) to abide by their various requirements in a diligent and well-judged manner.” It adds: “In sum, Treasury has not adopted the rigorous approach or developed the professional team necessary for an adequate compliance system to ensure that companies receiving exceptional assistance under TARP adhere to the special restrictions that were imposed to protect taxpayer interests.” The report focuses on Treasury’s treatment of six TARP recipients: American International Group (AIG); Bank of America; Chrysler; Citigroup; General Motors; and GMAC (now Ally Bank). -Noel Brinkerhoff TARP Watchdog Says Treasury Department Is Allowing Recipients to Judge Their Own Compliance with Program Rules (by Ryan Holeywell, BailoutSleuth.com) SIGTARP Report (Office of the Special Inspector General for the Trouble Asset Relief Program) (pdf)
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