TARP Watchdogs Say They Are Being IGNORED by Treasury

One would think that with all of the criticism of TARP program, Treasury Secretary Geithner would make dammed sure that he would have regular contact with the oversight people, especially when those oversight people were appointed by the Senate. Many of those senators will soon be voting on his requests to take over...well, just about everything.

Elizabeth Warren, charged by the senate to keep an eye on the TARP program testified today that the treasury department has not been cooperative in her oversight efforts:

"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," Warren said. "We use what you give us, and we will exercise the leverage given to us by Congress. In part, that's why I'm here today. I'm here to talk to you about what's happened so far, what we have discovered so far, the inquiries that we have in mid-stream and for which we continue to await responses."

This TARP program is a disaster, and today's hearings are just another example of one of the main problems, lack of oversight:

TARP Watchdog: 'We Do Not Seem To Be A Priority For The Treasury'

March 31, 2009 1:13 PM

The watchdog for the Troubled Asset Relief Program, the government's financial rescue plan, said today that the Treasury Department has not been cooperating with oversight efforts up to this point.

"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," Warren said. "We use what you give us, and we will exercise the leverage given to us by Congress. In part, that's why I'm here today. I'm here to talk to you about what's happened so far, what we have discovered so far, the inquiries that we have in mid-stream and for which we continue to await responses."

Warren, visibly frustrated with a lack of cooperation from the administration, emphasized, "This problem starts with Treasury." 

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 in the cases of 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," he emphasized. "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."

Ranking member Sen. Chuck Grassley, R-Iowa, said the administration needs to start living up to its promise to increase the program's transparency.

"Unfortunately, despite saying all the right things about open government, the new administration has not made any major changes aimed at making TARP more transparent," he said. "Moreover, I have heard about potential problems with access to information from all three of the oversight bodies testifying."

At this morning's hearing, such problems were emphasized time and time again by Warren. Her Congressional Oversight Panel will release their fifth report on TARP next week.

"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," Warren said. "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."

ABC News has asked the Treasury Department for a response and will update when and if they get back.

UPDATE 6:27pm: Treasury spokesman Andrew Williams just sent along three letters between Treasury and GAO, as well as the following statement:

"Transparency and accountability are central to ensuring that taxpayer funds are spent wisely. Treasury is actively engaged with our four oversight bodies and has made significant progress in implementing every GAO recommendation, including the following important measures: Treasury hired more staff across the Office of Financial Stability, strengthened its internal controls framework to ensure program objectives are met, improved procedures to oversee contractor performance, and published and expanded its survey on the lending and intermediation activities of banks.

Over the last month, Treasury has rolled out five core components of our Financial Stability Plan, and we will continue communicating to the oversight bodies, the Congress, and the American people as we implement these programs, open up lending for consumers and businesses, and achieve economic recovery."