Grassley holds Treasury Department accountable for safeguarding tax dollars in bailouts
WASHINGTON --- Senator Chuck Grassley has asked Treasury Secretary Tim Geithnerto account for the Treasury Department not implementing numerous recommendations tosafeguard tax dollars dedicated to the TALF program, a federal program designed to ensureaccess to credit by eligible households and businesses.
Grassley said the outstanding recommendations were detailed in the recent quarterlyreport to Congress made by the Special Inspector General for the Troubled Asset ReliefProgram, or TARP. The Term Asset-Backed Securities Loan Facility, or TALF, was a secondbailout program created after the original stated mission of TARP was changed less than a monthafter Congress passed legislation.
Last week, Grassley asked the Treasury Secretary about the failure to implement theSpecial Inspector General’s recommendation that the Treasury Department require TARPparticipants to provide information about how they’ve used TARP funds.
Grassley fought for creation of the Special Inspector General for TARP, and worked topass legislation to expand the watchdog’s powers when the purpose of TARP was altered by theprevious Treasury Secretary.
“After a little over a year, it’s pretty clear that neither the former nor the current TreasuryDepartment has made it a priority to facilitate transparency and the accountability it helps tobrings about when it comes to the massive taxpayer-sponsored bailout programs,” Grassley said.“It should be the other way around, with the Treasury Department acting as a pro-active trusteeof these tax dollars.”
The text of the letter Grassley sent today follows.
November 13, 2009
The Honorable Timothy F. Geithner
U.S. Department of the Treasury
1500 Pennsylvania Avenue, NW
Washington, DC 20220
Dear Secretary Geithner:
Recently, my staff conducted a review of the Quarterly Report to Congress dated October21, 2009, prepared by the Office of the Special Inspector General for the Troubled Asset ReliefProgram (SIGTARP/OIG). One of the responsibilities of the OIG is to providerecommendations to the U.S. Department of the Treasury (Treasury). Many of theserecommendations were designed to facilitate transparency, effective oversight, and to preventfraud, waste, and abuse of taxpayer money.
As you know, the Term Asset-Backed Securities Loan Facility (TALF) program wascreated by the Federal Reserve to ensure that creditworthy households and businesses haveaccess to credit. As part of its ongoing effort to protect taxpayer money released through TARP,SIGTARP has recommended that Treasury take several steps in relation to TALF. It is withgreat concern that I learn that many of these recommendations have not been implemented.Specifically, Treasury has not implemented the following SIGTARP recommendations:
1) Agreements with TALF participants should include acknowledgements that theparticipants are subject to OFS-Compliance and SIGTARP oversight;
2) Parties on whom conditions are imposed as part of TALF should establish internalcontrols and certify compliance with those conditions;
3) Treasury and the Federal Reserve should provide for public disclosure through SIGTARPthe identity of borrowers who surrender collateral in TALF; and
4) Treasury should dispense with rating agency determinations and require security-bysecurityscreening for each legacy Residential Mortgage-Backed Security (RMBS).
In addition, taxpayers across the United States are greatly interested in knowing how theirmoney is being spent and whether their government is doing all it can to protect it from fraud,waste, and abuse. Accordingly, please provide me with an update on the status of theserecommendations immediately. If no action has been taken, I ask that you state whetherTreasury plans to implement the recommendation and, if not, why not.
I thank you in advance for your cooperation and request that you provide the requesteddocuments and written responses by no later than December 4, 2009.
Charles E. Grassley
Cc: The Honorable Neil M. Barofsky
Special Inspector General
Office of the Special Inspector General
Troubled Asset Relief Program
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