TARP Shortchanged Taxpayers by $78 Billion, Watchdog Panel Says

TARP Shortchanged Taxpayers by $78 Billion, Watchdog Panel Says - 2/6/2009

Home

Index of Filings

News and Press Releases

Filings

Decisions

Settlements

Litigation Activity Indices

Top Ten List

Annual/Quarterly Updates

Clearinghouse Research

Articles & Papers

Search

Related Sites

About Us

Local Rules

Sponsors

Register

_______________
Copyright © 2001
Stanford Law School

2009 News and Press Releases

SEARCH

News	News 2009
HEADLINES \| SETTLEMENTS AND DISMISSALS \| COURT FILINGS LINKS TO OTHER NEWS \| NEWS ARCHIVE	HEADLINES ARCHIVED SETTLEMENTS AND DISMISSALS ARCHIVED

HEADLINE NEWS:

TARP Shortchanged Taxpayers by $78 Billion, Watchdog Panel Says
Mark Pittman and Bob Ivry

Bloomberg. February 6, 2009
_________________________________________________________________________

EXCERPT: U.S. taxpayers are being shortchanged by about $78 billion through the Treasury Department’s bank bailout, the panel overseeing the program said. The Treasury, when it was headed by Secretary Henry Paulson, received bank assets worth about $176 billion in exchange for capital purchases of $254 billion under the Troubled Asset Relief Program, the Congressional Oversight Panel said in a report today. “The loss estimate is conservative,” said Representative Alan Grayson, a Florida Democrat on the House Financial Services Committee. “It could turn out that those assets in the end are worthless. These are massive handouts to favored institutions to try to make up with taxpayer money the mistakes they made with investor money.” […] Neel Kashkari, who runs TARP as a holdover from the Bush administration, told a Mortgage Bankers Association conference on Dec. 5 in Washington that the government isn’t “looking for a return tomorrow.” “We are looking to try to stabilize the financial system, get credit flowing again, and over time, we believe that the taxpayers will be protected and have a return on their investment,” he said. The oversight committee faulted TARP’s “one-size-fits-all investment policy” for the shortfall. “The use of standardized documents probably contributed to Treasury’s ability to obtain speed of execution and wide participation, but it meant Treasury could not address differences in credit quality among various capital infusion recipients,” the report said. More than 200 companies, from New York-based Citigroup Inc. to Saigon National Bank in Westminster, California, have received TARP money, according to Bloomberg data. “From day one, it’s been apparent that Treasury’s interest leaned more favorably toward that of the bank’s, with taxpayers as simply an afterthought,” said Representative Scott Garrett, a New Jersey Republican on the Financial Services Committee.

Back to News page | Back to Archived News 2009 page | Back to Top

�