Special Inspector General for the Troubled Asset Relief Program

Special Inspector General for the Troubled Asset Relief Program
Name	Special Inspector General for the Troubled Asset Relief Program
Formation	2008

Special Inspector General for the Troubled Asset Relief Program is an oversight office created to audit, investigate, and report on the Troubled Asset Relief Program. The office was established by statute to provide independent monitoring of federal relief funds, produce public reports, and refer matters for criminal or civil enforcement. It has interacted with a wide range of federal agencies, congressional committees, and private sector actors involved in financial stabilization.

Overview and Mandate

The office was mandated by the Emergency Economic Stabilization Act of 2008 to oversee implementation of the Troubled Asset Relief Program and related programs administered by the Department of the Treasury. It was charged with auditing transactions, investigating alleged fraud, waste, and abuse, and reporting findings to the President, the United States Congress, the Secretary of the Treasury, and the public. The mandate required coordination with inspectors general from agencies including the Federal Reserve System, the Federal Deposit Insurance Corporation, the Securities and Exchange Commission, and the Small Business Administration, and interaction with oversight bodies such as the Government Accountability Office. The office's remit included referrals to the Department of Justice and cooperation with entities like the Federal Bureau of Investigation and the Internal Revenue Service.

History and Establishment

The office was created under the Emergency Economic Stabilization Act of 2008 amid the financial crisis that followed the collapse of high-profile firms such as Lehman Brothers and Bear Stearns. Legislative debates in the United States Senate and the United States House of Representatives shaped the statutory language that established an independent inspector general with broad auditing and investigative powers. The office's inception occurred alongside programs administered by the Office of Financial Stability within the Department of the Treasury, coordinated with policy actions by the Federal Reserve Board, and concurrent with international actions by institutions like the International Monetary Fund and the European Central Bank. The creation of the office reflected oversight models used after previous crises involving entities such as the Resolution Trust Corporation and drew comparisons to the Troubled Asset Relief Program oversight proposals debated during the 2008 United States presidential election.

Organization and Officeholders

The office was organized with divisions for audit, investigations, legal counsel, and public affairs, staffed by personnel with backgrounds from the Securities and Exchange Commission, the Office of the Comptroller of the Currency, the Department of Justice Tax Division, and private accounting firms such as PricewaterhouseCoopers and Deloitte. Leadership has included inspectors general and acting officials nominated or appointed under statutory provisions; notable officeholders interacted with congressional oversight by committees including the House Financial Services Committee and the Senate Committee on Banking, Housing, and Urban Affairs. The office coordinated with inspectors general from entities like the Federal Housing Finance Agency, the Commodity Futures Trading Commission, and the United States Postal Service Office of Inspector General when cross-jurisdictional issues arose. Staffing drew on professionals with experience at institutions such as Goldman Sachs, JPMorgan Chase, Citigroup, and Bank of America.

Activities and Investigations

The office conducted audits of capital injections, asset guarantee programs, and foreclosure mitigation initiatives administered by the Department of the Treasury and implemented with assistance from private sector contractors including BlackRock, AIG, and General Motors during restructuring efforts. Investigations addressed alleged misconduct involving financial institutions like Wachovia and government-sponsored enterprises such as Fannie Mae and Freddie Mac. The office issued subpoenas, pursued civil asset forfeiture actions in coordination with the United States Attorney offices, and referred criminal matters to the Department of Justice and investigative agencies such as the Federal Bureau of Investigation and the Office of Personnel Management Office of Inspector General when relevant. Collaborative probes involved state regulators including the New York State Department of Financial Services and international counterparts like the Financial Conduct Authority.

Reports and Impact

The office published quarterly and special reports documenting program performance, risk assessments, and recommendations for policy changes, informing legislative oversight by the United States Congress and prompting administrative reforms at the Department of the Treasury. Reports highlighted issues in program transparency, contract administration with firms such as McKinsey & Company and Booz Allen Hamilton, and risks in subsidy programs affecting automotive restructurings involving Chrysler and General Motors. Congressional hearings featuring testimony before the House Committee on Oversight and Reform and the Senate Homeland Security and Governmental Affairs Committee used these reports to authorize follow-up investigations, reforms in financial regulatory policy, and adjustments to accountability mechanisms like strengthened inspector general provisions and coordination with the Government Accountability Office.

Criticism and Controversies

Critics questioned the office's independence, resources, and effectiveness amid complex interventions involving Treasury officials, private asset managers, and large financial institutions such as Morgan Stanley and Wells Fargo. Debates arose over executive branch influence, coordination with the Office of Management and Budget, and the adequacy of criminal referrals to the Department of Justice. Some commentators compared oversight outcomes to earlier efforts after the Savings and Loan crisis and criticized perceived delays in acting on audit recommendations. Controversies also touched on disclosure of sensitive information, legal disputes involving subpoena compliance in cases tied to entities such as AIG and Countrywide Financial, and the balance between rapid stabilization measures and long-term accountability demanded by oversight bodies like the Government Accountability Office and members of the United States Congress.

Category:United States federal oversight bodies