“Slap in the Face” Award: The Treasury’s $35 Billion Lunch Check
I’m not sure if the “Slap in the Face” this week should go to the Treasury Department or the accountants who do its numbers. You decide.
The acting assistant secretary for the Office of Financial Stability stated a few months back that the TARP – you remember, the program set up to help banks and homeowners who got slammed in the collapse – was not only a success, but it also made “a significant positive return for taxpayers.”
But the SIGTARP, the special investigator set up to monitor the program, has a very different story to tell. He says the program lost $35 billion of taxpayer money and it has cost a lot of money to run. $1.5 billion to administer TARP. And it has turned out to be a government employment stimulus package as well.
Now that’s what D.C. needs, a jobs stimulus!
There are 103 full-time employees running TARP at the Treasury. They cost $130 million last year alone.
The Treasury has used 156 private vendors, 21 financial agents – I have no idea what constitutes a financial agent – 135 contractors and 481 employees of Fannie and Freddie, too.
The average travel expenses for each of the 103 Treasury employees was over $25,000-plus last year alone. And I think it is a safe guess that not all 103 were travelling.
Almost $20,000 was given to a contractor to run team-building workshops. $4,750 for a company to get filings from the SEC. None of the almost 600 employees could call to get them. They had to hire someone to do that.
And the SIGTARP says corruption was rampant.
222 bank executives have been charged with fraud in connection with TARP. 160 were convicted, 91 were sentenced and 45 are awaiting their fate. No word on the others.
$16.6 billion to the auto industry. $11.2 to GM alone!
$13.5 billion went to AIG and $2.5 billion to Ally bank. They advertise a lot in Florida.
But only $9.9 billion of the $45 billion allocated to help keep people in their homes was used. Four million to 6 million people lost their homes to foreclosure and only 21% of the money allocated for that purpose was used.
Did the TARP program save the banking system in the U.S.? Yes, it did a fine job of it. And frankly, a $35 billion loss, in Washington terms anyway, is like a lunch check for most of us.
But, no matter how you look at it, it is not a significant, positive return. Or maybe in Washington, anything under $18 trillion looks like a winner to them.
Have a comment for Steve? Leave your thoughts below.