Neil Barofsky was appointed to the position of 'Special Investigator General' of Tarp (SIGTARP). He isn't exactly a Special Prosecutor, but according to the link below he does have many of the powers of a Special Prosecutor.
SIGTARP has more than 40 agents, including former Secret Service, Federal Bureau of Investigation and Internal Revenue Service investigators, who sport blue windbreakers emblazoned with the SIGTARP seal.
They are authorized by Congress to carry guns -- Barofsky does not -- make arrests, and subpoena and seize records.
He has been pretty low-key so far, unlike other well-known Special Prosecutors like Kenneth Starr eg. as he goes about his job of over-seeing the management of TARP funds. He is a Democrat, but has worked under both Republican and Democratic administrations. His style reminds me of Eliott Spitzer. And like Spitzer, he is not very popular on Wall St. these days, something he says doesn't bother him in the least.
This past week he issued a report that cannot have been very good news, especially for the Treasury Department.
From the article that appeared in Bloomberg this week which is well worth reading in its entirety:
Barofsky Says Criminal Charges Possible in Alleged AIG CoverupBarofsky’s most recent broadside came on April 20, when a SIGTARP report labeled a housing-loan modification program funded with $50 billion of TARP money as ineffectual.
230,000 Homeowners
Treasury spokesman Andrew Williams counters that the program has resulted in modifications for more than 230,000 homeowners.
The TARP watchdog has also criticized Treasury Secretary Timothy F. Geithner in reports and in congressional testimony for his handling of the process by which insurance giant American International Group Inc. was saved from insolvency in 2008, when Geithner was head of the Federal Reserve Bank of New York.
The secrecy that enveloped the deal was unwarranted, Barofsky says, adding that his probe of an alleged New York Fed coverup in the AIG case could result in criminal or civil charges.
In Senate Finance Committee testimony on April 20, Barofsky said SIGTARP would investigate seven AIG-linked mortgage-related securities similar to Abacus 2007-AC1, the instrument underwritten by Goldman Sachs Group Inc. that is at the center of a U.S. Securities and Exchange Commission lawsuit filed against the investment bank on April 16.
Barofsky and Geithner have had a contentious relationship with Geithner demanding that Barofsky report directly to him. Barofsky refused stating that he reports only to the President.
“This Treasury Department and the previous Treasury Department bear some of the responsibility for not being straightforward with the American people.”
Barofsky criticized Geithner’s predecessor, Paulson, in an October 2009 report, saying Paulson publicly described the initial nine TARP bank recipients as healthy when he knew that at least one of them risked failure.
In a letter responding to Barofsky, Assistant Treasury Secretary Herbert Allison wrote: “Any review of such announcements must be considered in light of the unprecedented circumstances in which they were made.”
Geithner and Paulson both declined to comment for this story.
Asked whether or not Geithner himself is a target of his investigation he responded:
He won’t say whether the investigation is targeting Geithner personally.
In a statement, the New York Fed said: “Allegations that the New York Fed engaged in a coverup of its intervention in AIG are not true. The New York Fed has fully cooperated with the Special Inspector General.”
Barofsky’s to-do list grows. SIGTARP now has 120 employees, has initiated 20 audits and was involved with 84 investigations as of March 31. In January, it opened a New York office, with San Francisco and Los Angeles branches scheduled for later this year.
Barofsky does say that the question of whether the New York Fed engaged in a coverup will result in some sort of action.
“We’re either going to have criminal or civil charges against individuals or we’re going to have a report,” Barofsky says. “This is too important for us not to share our findings.”
Maybe Henry Paulson and all those who thought they did not have to answer to anyone, will finally have to answer some questions after all.