One fact is no one knows what the hell is going on with U.S. taxpayer dollars and what the U.S. Treasury as well as the Federal Reserve are doing with it.
This hearing, is a TARP Inspector General Report hearing, otherwise known as Don't ask, don't tell.
Following the Money, Part I
The House Oversight Committee's hearing, Following the Money: Report of the Special Inspector General for the Troubled Asset Relief Program (SIGTARP) has some shocking testimony, with the TARP inspector general comparing TARP to running a Madoff Hedge fund.
Yesterday Inspector General Barosky's testimony was released, along with the mind numbing headline, $23.7 trillion dollars of financial commitments have been made by the U.S. government surrounding the financial crisis.
In Big Estimate, Worth Little, the New York Times absurdly amplifies how the $23.7 trillion number is everything under the sun and if the U.S. actually was on the hook for this large of a sum, all assets would have to be deemed worthless.
That said, does it matter? Even if $12 trillion was lost that would destroy the United States.
The article notes the U.S. Treasury Department, Williams said:
He added that the United States had spent less than $2 trillion so far, and that much of that was backed by valuable assets.
and the New York Times wryly notes it may be the first time that $2 trillion appears to be a small number.
So, we are getting argument over the scale of these numbers instead of the focus on how the U.S. Treasury is seemingly not minding the U.S. taxpayer store and it's just a financial pig fest with no transparency or accountability.
Committee Chair Edolphus Towns (D-NY-10), opening statement:
Today we will hear from the Special Inspector General
for TARP, Neil Barofsky, as he presents his quarterly report
to Congress. His findings, quite frankly, are astonishing.
According to the IG, “the TARP has become a program in which taxpayers:
- are not being told what TARP
recipients are doing with their money
- have not been told what their investments are worth
- will not be told the full details of how their money is being invested
So, the Treasury Department isn't even asking recipients what they are doing with our money!
Ya know, by any stretch of the imagination, this is purely outrageous. I'm sorry but these are public funds and the Treasury and the Federal Reserve are acting like it's all perfectly acceptable to take our money and simply hand it over to a select group of financial companies!
Also described in the hearing are how there are no firewalls between BlackRock and other 9 firms managing assets for the U.S. treasury via public contracts and these companies private investment activities. In other words, while one is managing a toxic asset fund via contract, these same employees are trading in open markets. Now someone explain how that is not the ultimate insider trading game?
Treasury has hired nine private firms to be asset managers for the Public-Private Investment Program. All of these large firms are engaged in extensive private investment activities.
According to the Special IG, this arrangement is vulnerable to conflicts of interest, collusion, and money laundering.
Another point in the hearing Q&A is Bank of America took their TARP and invested in the Construction Bank of China. How American of them!
Rep. Kucinich pointed to this Bloomberg article, where buried in paragraphs is the fact the Federal Reserve is sitting on funds and banks are not lending.
Banks’ excess reserves at the Fed rose to a record $877.1 billion daily average in the two weeks ended May 20, from $2 billion a year earlier. Excess reserves -- money available for lending that banks choose to leave with the Fed instead -- averaged $743.9 billion in the first two weeks of this month.
Here (large pdf) is the SIGTARP's quarterly report to Congress for further study.
Closing Statement of Chair Towns:
The Treasury Department needs to publish full and detailed information on the use of TARP funds and publish the value of the TARP portfolio on a monthly basis. They have that information and they should make it public.
Moreover, Treasury also requires the largest banks to file monthly reports showing the dollar value of their new lending. That should be made public also.
If Treasury doesn’t put this information up on its website, this Committee will. And if Treasury doesn’t turn over this information voluntarily, Secretary Geithner will be brought before the Committee to explain.
What we have heard today convinces me that one of the best things Congress did when it created the TARP was to also create the Special Inspector General to oversee TARP spending. I can now understand why the Treasury Department would like to rein in the SIGTARP. But we are not going to let that happen.
I sure as hell hope so. What a labyrinth of corporate oligarchy and obfuscation. If the SIGTARP Inspector General, where this is his job, cannot figure out what the hell is going on and is even further shut down, the American public don't have a prayer's chance on finding out what happened with trillions of their dough.