Most of official Washington operates in a state of slow-mo lethargy when it comes to working on financial reform.
Not Neil Barofsky, who is saddled with the cumbersome acronym SIGTARP.
That stands for Special Inspector General of the Troubled Asset Relief Program, also known as the federal bailout.
He’s a one-time federal prosecutor who in his former life prosecuted Colombian drug gangs and white-collar criminals.
As one Republican senator told him when Barofsky got the inspector general’s job, if he did his job properly, he’d never be able to get another.
Barofsky seems to have taken it to heart.
Last week, along with New York Attorney General Andrew Cuomo, he filed suit against former top Bank of America officials, charging them with fraud for concealing how bad Merrill-Lynch’s losses were from B of A’s own stockholders while B of A was in the process of acquiring Merrill during the melt-down.
Barofsky also recently launched an investigation into the shady federal bailout of AIG and its counterparties, including Goldman-Sachs.
Meanwhile his regular quarterly reports to Congress continue to pack a punch. He has consistently warned against the administration’s rosy predictions of how taxpayers will benefit from TARP.
He’s focused instead on the continuing dangers of doing nothing to rewrite the rigged rules of the financial game that favor bankers’ bonuses and betting with taxpayers’ money over the interests of consumers and homeowners.
“Even if TARP saved our financial system from driving off a cliff back in 2008,” Barofsky wrote in his most recent report, “absent meaningful reform, we are still driving on the same winding mountain road, but this time in a faster car.”
In fact, the whole focus on whether taxpayers are getting “paid back” is a smokescreen for TARP’s failures. While the administration has touted banks’ repayments of their TARP money, the repayments are backfiring on the administration, giving it less leverage over the banks. Released from their TARP obligations, the banks are free to return to lavishly rewarding their employees for risky trades that rack up short-term profits.
Barofsky, writing in plain language that consumers and concerned citizens can understand, states that while the TARP program stabilized the financial system, it hasn’t met most of its other goals. “Lending continues to decrease, month after month, and the TARP program designed specifically to address small-business lending — announced in March 2009 — has still not been implemented by Treasury,” Barofsky wrote in the January 30 report. “The TARP foreclosure prevention program has only permanently modified a small fraction of eligible mortgages, and unemployment is the highest it has been in a generation.”
Barofsky was appointed by Congress to monitor TARP. Yet Congress has done nothing to hold the current administration accountable for the bailout’s failures. Meanwhile the Senate continues to pursue what appears to be its quest to squelch reform, in direct contradiction of what a majority of Americans want. Specifically Sen. Christopher Dodd appears to be on the brink of negotiating away a stand-alone Consumer Financial Protection Agency, a linchpin of President Obama’s reform plan. The financial industry fiercely opposes such an agency.
Contact your representative and senator today and let them know you support Barofsky’s strong work on TARP. While you’re at it, let your senator know you’re paying attention to the battle over financial reform, and that they should start paying attention to the will of the majority instead of the bank lobbyists.