Troubled Asset Relief Program

The Treasury is unlikely to get back the full amount of money lent under the Troubled Asset Relief Program despite a recent spate of repayments from large banks, warned the program's watchdog. The program "played a significant role" in rescuing the financial system from a meltdown, Neil Barofsky, special inspector general for TARP, testified before the Senate Banking Committee on Thursday. But it was "extremely unlikely that the taxpayer will see a full return on its TARP investment," according to his prepared testimony.

WASHINGTON — The government's watchdog for the $700-billion Troubled Asset Relief Program disputed suggestions the bailout fund would turn a profit for taxpayers and warned that many small banks are still struggling to repay. "It is a widely held misconception that TARP will make a profit," said a report by Christy Romero, the special inspector general for TARP. The Obama administration has said TARP has turned a profit on about $205 billion injected into banks, but still projects losses for the entire fund.

The parent of City National Bank on Tuesday added its name to the list of financial companies that want to exit the industry's strained partnership with Uncle Sam. Beverly Hills-based City National Corp. said it raised about $100 million by selling new shares to investors, and intended to put the money toward repayment of $400 million in government capital it received in November. "We'd like to repay the whole thing," said Russell Goldsmith, the company's chief executive.

WASHINGTON -- The government's watchdog for the $700-billion Troubled Asset Relief Program on Wednesday disputed suggestions the bailout fund would turn a profit for taxpayers, and warned that many small banks are still struggling to repay. "It is a widely held misconception that TARP will make a profit," said a report by Christy Romero, the special inspector general for the TARP program, known as SIGTARP. The Obama administration has said TARP has turned a profit on about $205 billion injected into banks, but still projects losses for the entire fund.

Ten big banks made good Wednesday on their promises to repay $68 billion in government capital received under the Troubled Asset Relief Program. JPMorgan Chase & Co. said it paid the Treasury $25 billion, Morgan Stanley returned $10 billion, Goldman Sachs Group Inc. repaid $10 billion, U.S. Bancorp returned $6.6 billion, Capital One Financial Corp. gave back $3.6 billion, and American Express Co. sent back $3.4 billion. The other banks returning the federal money were BB&T Corp.

Amid growing public consternation with the federal banking bailout, the Treasury Department's special inspector general has opened an examination of political influence in handing out some of the $350 billion in federal bank bailout funds, The Times has learned. The audit, which has just begun, is broad in scope but will focus on lobbying activities by financial institutions and what the special inspector general, Neil Barofsky, has called "outside influences."

Almost three years after a series of government bailouts began, what many feared would be a deep black hole for taxpayer money isn't looking nearly so dark. The brighter picture is highlighted by the outlook for the bailouts' centerpiece ? the $700-billion Troubled Asset Relief Program. "It's turning out to cost one heck of a lot less than what we all thought at the beginning," said Ted Kaufman, a former U.S. senator from Delaware who heads the congressionally appointed panel overseeing TARP.

American International Group Inc. announced early Thursday that it had reached agreement in principle with government officials to repay the approximately $100 billion in taxpayer money it still owes, starting a process that would end one of the largest and most controversial bailouts of the financial crisis. A key part of the plan, which has been the subject of weeks of negotiations, is for the Treasury Department to convert $49.1 billion in preferred shares purchased with money from the Troubled Asset Relief Program into common stock in AIG. The move will increase the U.S. ownership stake in the insurance giant from 80% to 92%, but allow the government to sell the shares over time in the open market to end the taxpayer support.

As one of the most controversial chapters in U.S. economic history draws to a close, the Obama administration and its critics are writing very different obituaries of the $700-billion fund that bailed out Wall Street and the domestic auto industry. Treasury Secretary Timothy F. Geithner said the much-maligned Troubled Asset Relief Program "succeeded in ways that none of us could have imagined. " And Herbert M. Allison Jr., who resigned Wednesday as TARP's head, said the fund laid the foundation for the nation's recovery — "at a fraction of the cost that was originally anticipated.

Allstate Corp. became the second insurer to turn down a bailout from the Treasury Department after being approved for government funding. The Northbrook, Ill., company was among six insurers granted preliminary approval Friday to receive capital infusions under the government's Troubled Asset Relief Program. Ameriprise Financial Inc. turned down bailout funding that same day.

WASHINGTON — The Obama administration probably will make a profit on all the bailout money spent to prop up banks and other companies, as well as struggling homeowners, devastated by the Great Recession, according to the latest federal projections. Over the next 10 years, the taxpayer-funded bailouts could produce as much as $163 billion in profits, in a best-case scenario, from repayments, stock sales, dividends and interest paid by banking and insurance firms, auto companies and mortgage finance companies.

American International Group Inc.'s recent $20 billion quarterly profit was almost entirely because of an inappropriate tax break the government-owned insurance company continues to receive, according to four former members of the watchdog panel that oversaw the financial crisis bailouts. The break allows AIG to count its past net operating losses against future taxes. That amounts to a "stealth bailout" of a company that received about $125 billion in taxpayer money, said the former appointees to the Congressional Oversight Panel for the $700 billion Troubled Asset Relief Program.

In Tuesday evening's presidential debate from New Hampshire, Mitt Romney defended the Wall Street bailouts - the No. 1 target of conservative and tea party rage. Romney said the bailouts had been mismanaged, but he supported the actions taken by the George W. Bush administration to “make sure you don't lose the country and you don't lose the financial system.” The debate, at Dartmouth College in Hanover, was sponsored by Bloomberg and the Washington Post. “We could have had a complete meltdown,” Romney said.

Federal regulators bent the rules to allow Bank of America Corp., Wells Fargo & Co. and PNC Financial Services Group Inc. to repay their bailout money early, missing a chance to force them into further bolstering their finances. The banks pushed for the repayment requirements to be eased in part because they wanted to avoid tough executive compensation restrictions attached to the Troubled Asset Relief Program, according to an audit released Thursday by the special inspector general monitoring the bailout fund.

The Treasury Department sold its remaining stake in Chrysler Group, ending its role in the Detroit automaker's bailout that left taxpayers with a $1.3-billion loss. Italian automaker Fiat purchased the U.S. government's 6% stake in Chrysler for $560 million on Thursday, formally concluding the $12.5-billion bailout in 2008 and 2009, the Treasury Department announced. Including Chrysler's payment of loans from the Troubled Asset Relief Program, or TARP, the government received $11.2 billion of the money back.

A federal grand jury has accused an Orange County couple of stealing $130 million from a consortium of banks, including Bank of America, by inflating the value of their importing company's assets. Thomas Chia Fu and his wife, Cheri L. Shyu, were arrested Thursday at their home in Newport Coast. The couple owned an Anaheim company called Galleria USA Inc., which imported home decor items from China and sold them in the United States. They defrauded the banks by exaggerating ?

The Treasury Department has recovered 70% of the money distributed under the $700-billion bailout fund after insurance giant American International Group Inc. paid back $6.9 billion of the taxpayer bailout it received. The once financially ailing AIG made the repayment Tuesday after selling its holdings in MetLife last week. About $59 billion from the Troubled Asset Relief Program still is invested in AIG. Altogether, AIG received about $125 billion in a complex, multistep bailout from the Treasury and the Federal Reserve starting in the fall of 2008.

Almost three years after a series of government bailouts began, what many feared would be a deep black hole for taxpayer money isn't looking nearly so dark. The brighter picture is highlighted by the outlook for the bailouts' centerpiece ? the $700-billion Troubled Asset Relief Program. "It's turning out to cost one heck of a lot less than what we all thought at the beginning," said Ted Kaufman, a former U.S. senator from Delaware who heads the congressionally appointed panel overseeing TARP.