November 09,2009

Grassley calls on Treasury Secretary to require TARP participants to report on use of funds

WASHINGTON – Senator Chuck Grassley is asking why the Treasury Department isn’t requiring TARP recipients to report on the actual uses of TARP funds.

Grassley said an October report to Congress from the Special Inspector General for TARP says the Treasury Department has failed to do so for all but three TARP recipients, despite the urging of the Inspector General that it be done.

“Since the Treasury Department is a public trustee of TARP dollars, you wonder why officials even have to be told to find out how recipients of TARP dollars are using the money,” Grassley said. “The fact that the Treasury Department has disregarded the recommendation to do so from the program’s watchdog is even more aggravating. There is no legitimate reason for the Treasury Department not to require this information. In fact, it’s unbelieveable that Treasury hasn’t been doing this.”

Earlier this fall, Grassley joined other senators to urge the Treasury Secretary to let TARP expire at the end of the year, after the administration signaled it may support extending TARP for another year. On top of shutting down the program, the senators who wrote to the Treasury Secretary also said that every penny of the TARP money paid back by the big Wall Street banks should go to federal debt reduction, not to more government spending and bailouts.

“The TARP program was supposed to keep credit flowing to Main Street, America. Instead, it’s been used as a Treasury Department slush fund to pick winners and losers in the private sector with bailouts for banks and auto makers,” Grassley said. “The fact that the Treasury Department has failed to require recipients to report on how they’ve used the taxpayer funds must change.”

When TARP was created in 2008, Grassley fought to establish a Special Inspector General for the program in order to help safeguard taxpayer dollars. When the former Treasury Secretary abandoned the original stated purpose of TARP almost immediately after the program started, Grassley worked to get legislation passed to expand the Inspector General’s authority to cover all TARP programs.

In early 2009, the new administration tried to stop the Special Inspector General from asking recipients of TARP dollars what they were doing with the money. Grassley fought the Treasury Department and the White House so that the Special Inspector General could work to access the data he needed to track how TARP dollars were being used.