TARP: More Fraud, Less Transparency

The Department of Treasury's recent report on TARP can justifiably lay claim to the title of best fiction written this year.  It is a glossy, self-congratulatory piece of puffery that ignores the rampant fraud in the program, turns a blind eye to mounting taxpayer losses and offers little transparency.

The laudatory analysis, issued July 10, was presented to Congress to provide an assessment of the Troubled Asset Relief Program (TARP), a $700 billion bail out of Wall Street banks, automobile companies, homeowners and multinational insurance firm AIG in 2008.

"By any objective standards, TARP has worked," the fluff piece boasts.  "It did so at a cost that is far less than what most people expected at the time the law was passed."  Whoever authored that tripe has a future in writing fairy tales for children.

For a more unbiased critique of the massive taxpayer rescue, consider the report card from the Office of the Special Inspector General for the TARP program.  Its unflattering review was released July 25, a little more than two weeks after Treasury's self-aggrandizing essay.

The document lists 150 criminal and civil investigations involving fraudulent use of TARP funds.  To date, 67 individuals have been convicted and 28 have been handed prison terms for their roles in the schemes which siphoned off millions of taxpayer dollars.

Court orders for restitution, forfeiture and civil judgements have eclipsed $4 billion.  Chances are slim the Treasury Department will ever see a penny of that money.

In addition, Treasury has written off losses of $15.6 billion that taxpayers will never get back. That amount does not include another $4.5 billion in TARP funds dumped into housing rescue programs without expectations of a payback, according to the inspector general.

The inspector general's office verified that taxpayers are still owed $109.1 billion as of June 30. The biggest chunk of that amount includes outstanding loans made to General Motors, which carries a $50 billion TARP debt on its books.  Of course, the media has ignored the inspector's findings.

In February, the Office of Management and Budget report for fiscal 2013 contained an estimate of the likely taxpayer losses under TARP. The forecast, provided by the Obama Administration, pegged the number at $67.8 billion.  That was an increase of $14.6 billion from the 2011 estimate.

Noting the staggering losses, Inspector General Christy Romero used harsh language to describe the recalcitrant Treasury Department's handling of TARP.

"...There was often a lack of detailed and complete documentation of government decision-making during the financial crisis and TARP," testified Romero before a House Committee.  In her report, Romero cited the Obama Administration's refusal to answer questions about bailouts of General Motors and Delphi Automotive.

Romero's predecessor, Neil Barofsky, also has minced no words in his assessment of the government program.  He has accused the administration of "resorting to trickery" to cover up how "badly TARP has failed."

Not surprisingly, the Obama Administration no longer brags about how TARP saved America from stumbling into the financial abyss.

In spite of the Treasury Department's fanciful report designed to burnish its image, TARP stands as a shameful example of why so many Americans have lost faith in their government.