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Top watchdog for $700-billion bailout fund Neil Barofsky resigns

Barofsky, who headed TARP's Office of the Special Inspector General, known as SIGTARP, said his work was largely done and it was time for him to leave government service.

February 15, 2011|By Jim Puzzanghera, Los Angeles Times
  • Neil M. Barofsky testifies before a House Appropriations subcommittee in April. His tough oversight of TARP has earned him bipartisan praise in Congress.
Neil M. Barofsky testifies before a House Appropriations subcommittee… (Harry Hamburg, Associated…)

Reporting from Washington — Saying the work was largely done, Neil M. Barofsky, the outspoken special inspector general and top watchdog of the $700-billion financial bailout fund, has submitted his resignation to President Obama.

In his letter Monday, Barofsky said that he had accomplished his top goals and that it was time for him to leave government service. The goals included ensuring transparency in how the Troubled Asset Relief Program was run and cracking down on people trying to fraudulently profit from the program.

Barofsky often has been sharply critical of the way the Treasury Department has run TARP. He has headed TARP's Office of the Special Inspector General, known as SIGTARP, which has more than 140 auditors in five offices nationwide.

"Thanks in no small part to the dedication of the talented professionals at SIGTARP, TARP stands in a far better and more transparent place today than anyone could have reasonably hoped in December 2008," Barofsky wrote.

In November, the Congressional Budget Office estimated that TARP would lose $25 billion, far from a mid-2009 projection of $341 billion.

"The anticipated financial costs, while still significant, have fallen dramatically from early projections," Barofsky said.

One reason for that drop is that the Treasury Department has adopted many of SIGTARP's numerous recommendations to shield the program from fraud, he said.

Barofsky, a tough-talking former federal prosecutor, frequently butted heads with Obama administration officials. He has been fiercely independent in an appointed position that is largely shielded from interference.

His tough oversight of the program has earned him bipartisan praise in Congress.

Rep. Elijah E. Cummings (D-Md.) said he would miss Barofsky's "honest, pragmatic and insightful reports." Rep. Patrick T. McHenry (R-N.C.) called him "a straight shooter."

And White House spokeswoman Amy Brundage said Barofsky "has provided strong oversight" of TARP.

Even though TARP is winding down, Barofsky said there was still work to do. He cited problems with the administration's much-criticized mortgage modification program, which uses TARP money.

Even as they are proposing $100 billion in cuts to the ongoing 2011 budget, House Republican leaders said they wanted to increase SIGTARP's budget by $13 million.

"The fact of the matter is the work that Mr. Barofsky has begun is far from complete. It is imperative that the next [inspector general] pick up immediately where Mr. Barofsky left off," said Rep. Darrell Issa (R-Vista), chairman of the House Oversight and Government Reform Committee.

The inspector general's office shares supervision of the fund with the Congressional Oversight Panel, formerly headed by Elizabeth Warren, who left to help the administration set up the Consumer Financial Protection Bureau.

There was no indication that Barofsky was being forced to leave. Appointed by former President George W. Bush, Barofsky said he intended to leave March 30.

Noting that he has spent more than 10 years working for the government, Barofsky said, "I believe that it is the right time for me to step down and pursue other opportunities."

Kristine Belisle, communications director for SIGTARP, said Barofsky made "a personal decision based on a number of factors, including his desire to spend more time with his wife and 9-month-old daughter."

jim.puzzanghera@latimes.com

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