Bailout cop Barofsky resigns as TARP winds down

By @ibtimes on

The top government auditor for bailouts of U.S. financial firms and automakers on Monday resigned his position as the $700 billion Troubled Asset Relief Program winds down.

Neil Barofsky said in a resignation letter to President Barack Obama that he will leave on March 30, but did not state a specific reason for his decision to resign his position as TARP Special Inspector General after serving just over two years.

He wrote that it has truly been an honor to serve, particularly during such a critical time.

Barofsky, 40, was nominated as TARP's first special inspector general in November 2008 by then-President George W. Bush just after the $700 billion bailout program was launched by Congress during the depths of the financial crisis.

Since then, he has doggedly pursued fraud in the program and criticized its shortcomings, building an organization of more than 140 auditors, investigators, attorneys and other staffing. SIGTARP, as the operation is known, is still staffing up regional offices in New York, San Francisco, Los Angeles and Atlanta.

Authority for new spending programs under TARP ended last October and the Treasury is working on winding down its investments in financial firms and automakers. A new Obama administration estimate forecasts that TARP will ultimately cost about $28.12 billion.

TARP's mission will continue until the last dollar has been repaid -- likely several more years -- and Barofsky said his deputy, Christy Romero, was fully prepared to take over the agency on an interim basis.

Barofsky said in his letter that he believes SIGTARP has met its goals to build a robust enforcement agency to ensure transparency in TARP's operation and provide effective oversight to minimize waste, fraud and abuse.

In addition to policing TARP, Barofsky has been critical of the program's inability to meet its goals to preserve home ownership and to reduce moral hazard in the financial sector.

Important parts of TARP continue to struggle: more than 150 TARP recipient banks have missed their regular dividend payments, and the Home Affordable Modification program has so far fallen short of legislative mandates, Barofsky wrote.

Indeed, with more than $150 billion in TARP funds outstanding and close to $60 billion still available to be spent, robust and effective oversight of TARP remains vitally important.

(Reporting by David Lawder, Editing by Chizu Nomiyama and Dan Grebler)

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