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April 21, 2009
Good news! TARP Fraud probably beyond counting
Rick Moran
With nobody watching, what did the feds expect? Ralph Vartabedian and Tom Hamburger of the Los Angeles Times write:
In the first major disclosure of corruption in the $750-billion financial bailout program, federal investigators said Monday they have opened 20 criminal probes into possible securities fraud, tax violations, insider trading and other crimes.
The cases represent only the first wave of investigations, and the total fraud could ultimately reach into the tens of billions of dollars, according to Neil Barofsky, the special inspector general overseeing the bailout program.
The disclosures reinforce fears that the hastily designed and rapidly changing bailout program run by the Treasury Department and Federal Reserve is going to carry a heavy price of fraud against taxpayers -- even as questions grow about its ability to stabilize the nation's financial system.
Barofsky said the complex nature of the bailout program makes it "inherently vulnerable to fraud, waste and abuse, including significant issues relating to conflicts of interest facing fund managers, collusion between participants, and vulnerabilities to money laundering."
We've already seen several sweetheart TARP deals involving Congressmen - including Barney Frank. No doubt we'll see more of that once the investigators get up a head of steam.
You have to wonder how many Swiss bank accounts were opened as a result of this program (or accounts in the Caymans) and how much they will be able to recover. There will also be a lot of smoke but not much hard evidence since the government itself didn't keep track of what the money was being used for.
Question: Since TARP originated with a Republican president, will the GOP get the blame for this mess? That seems likely given the slap dash way in which the program was implemented.
But the Democratic Congress has to share that blame one would think for not insisting on stricter guidelines. In the end, the whole thing may result in a political wash.
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