National Association of Attorneys General
Special Inspector General Office for TARP Created
In the nine months since the Emergency Economic Stabilization Act of 2008 (“EESA”) authorized creation of the Troubled Asset Relief Program (“TARP”), the Department of the Treasury (“Treasury”) has created 12 separate programs involving government and private funds of up to almost $3 trillion. From programs involving large capital infusions into hundreds of banks and other financial institutions, to a mortgage modification program designed to modify millions of mortgages, to public-private partnerships using tens of billions of taxpayer dollars to purchase “toxic” assets from banks, TARP has evolved into a program of unprecedented scope, scale, and complexity. Congress created the Office of the Special Inspector General for the Troubled Asset Relief Program (“SIGTARP”) to oversee this vast program.
Creation and Statutory Authority
Under EESA, SIGTARP has the responsibility, among other things, to conduct, supervise, and coordinate audits and investigations of the purchase, management, and sale of assets under TARP. EESA gives SIGTARP the authorities listed in Section 6 of the Inspector General Act of 1978, including the power to obtain documents and other information from federal agencies and to subpoena reports, documents, and other information from persons or entities outside of government.
The Special Inspector General, Neil M. Barofsky, was confirmed by the Senate on Dec. 8, 2008, and sworn into office on Dec. 15, 2008. SIGTARP currently has a staff of approximately 60 and is building toward a goal of 160.
SIGTARP’s mission is to advance economic stability through transparency, coordinated oversight, and robust enforcement, thereby being a voice for, and protecting the interests of, those who fund TARP — i.e., the American taxpayers. SIGTARP does so by promoting transparency in TARP, through effective oversight of TARP in coordination with other relevant oversight bodies, and by robust criminal and civil enforcement against those, whether inside or outside of government, who waste, steal, or abuse TARP funds. In fulfilling this mission, SIGTARP serves many roles.
- Reporting and Transparency: One of SIGTARP’s primary responsibilities is to promote transparency in the operations of TARP, both by being an advocate for transparency with the Treasury and through SIGTARP’s own quarterly reporting on TARP operations. SIGTARP’s quarterly reports are the most comprehensive discussion of the various TARP programs and are written with the goal of translating the Wall Street concepts inherent in the programs into Main Street language readily understandable by the general public. SIGTARP’s reports are available on its Web site, http://www.SIGTARP.gov/, and, as of June 30, 2009, have been downloaded more than 670,000 times.
- Providing Advice to Treasury:As Treasury has designed and implemented the various TARP programs, 12 in all at press time, SIGTARP has taken an active role in providing advice to Treasury with respect to compliance and anti-fraud aspects of the program designs. These recommendations are summarized in SIGTARP’s quarterly reports.
- Programmatic Audits: SIGTARP’s audit division has already undertaken numerous programmatic audits of TARP program implementation, examining Treasury actions, the actions of other governmental agencies that have TARP-related responsibilities, and the actions of TARP participants. SIGTARP’s first audit report, which examines TARP recipients’ use of the TARP funds, will be released shortly. Ongoing audits include examinations of outside influences on the application process for Capital Purchase Program funds, the background of the various Bank of America TARP transactions, AIG bonuses, AIG counterparty payments, and Treasury’s warrant valuation procedures, among many others.
- Criminal and Civil Investigations: SIGTARP is building its investigation division to be the most sophisticated white collar investigative agency in the federal government and consists of special agents, investigators, analysts and attorney advisors working directly with the investigators. Through June 30, 2009, SIGTARP has opened 37 and has 35 ongoing criminal and civil investigations. These investigations include complex issues concerning suspected accounting fraud, securities fraud, insider trading, mortgage servicer misconduct, mortgage fraud, public corruption, false statements and tax investigations. The division also manages SIGTARP’s hotline, (1-877-SIG-2009 and accessible at http://www.SIGTARP.gov) which gets hundreds of contacts from the public per week and which is the impetus for more than half of SIGTARP’s ongoing investigations .
- Coordination: In light of the massive size of the TARP landscape and the myriad oversight and law enforcement agencies that have jurisdiction over some part of TARP activities, SIGTARP takes its coordination responsibility very seriously and endeavors to work with and provide assistance to any entity that is working on TARP-related matters, whether oversight or investigative, civil or criminal, state or federal. In that regard, SIGTARP: chairs the TARP-IG Council, a council of all of the various Inspectors General with jurisdiction of one or more TARP programs; organized the TALF/PPIP Task Force, a task force made up of eight federal law enforcement agencies examining potential fraud in the Term Asset-Backed Securities Loan Facility and Public-Private Investment Program; and works closely with federal and state law enforcement agencies, including numerous state Attorneys General.
SIGTARP stands ready to provide assistance and encourages any federal, state or local oversight, investigative or law enforcement agency to contact SIGTARP with any referrals, needs for assistance, briefings or training, or concerns about the TARP or any related program.
For any audit-related inquiries, contact Barry Holman, SIGTARP’s chief of audit, at: Barry.Holman@do.treas.gov.
For any investigative or law enforcement inquiries, call Christopher Sharpley, SIGTARP’s chief of investigations, at: Chris.Sharpley@do.treas.gov.
For any other inquiries, please contact SIGTARP’s general number: (202) 622-1419.