http://finance.fortune.cnn.com/2011/04/05/how-to-lose-friends-in-washington-be-tarp-cop/FORTUNE -- Neil Barofsky has been chasing bad guys for much of his professional career. Whether it was as an assistant US Attorney in the Southern District of New York or in his most recent gig as the man trying to make sure hundreds of billions of government money doesn't get stolen by scheming bankers, he is naturally prone to suspicion, if not outright distrust.
"My view of financial institutions is colored by my years as a prosecutor," Barofsky says. "None of this surprises me. They are profit-driven corporations that seek to maximize profitability without much regard to social gain."
This squinty-eyed attitude made him an effective special investigator general overseeing the Troubled Asset Relief Program, or TARP -- which is to say, the guy policing the banks and auto companies that received $411 billion from taxpayers. But as the mood in Washington has shifted away from confrontation toward accommodation, Barofsky has become a lonely voice of dissent.
After more than two years as the SIGTARP -- an acronym of off-putting proportion -- Barofsky resigned on March 30. "When I first started this job in 2008, I felt like there was a collaborative effort with the Treasury Department," he says. "We were in the trenches together. Then my job turned into blunting the effects of their bad decisions. And then it just devolved into battling with Treasury itself. I used to have a weekly meeting with them, but I didn't have one after late September."
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http://www.bloomberg.com/news/2011-07-27/washington-follows-path-to-credibility-downgrade-neil-barofsky.htmlWashington Follows Path to Credibility Downgrade: Neil Barofskysnip
This follows previous warnings of other calamitous deadlines that have come and gone with little tumult, such as Treasury Secretary Timothy Geithner’s January claim that the debt limit had to be raised no later than March 31. That deadline passed, followed by a series of other supposed moments of truth in June and July, and most recently, the proclamation by congressional leaders that a deal had to be announced by 4 p.m. this past Sunday before the Asian financial markets opened.
Fortunately, these predictions, so far, have been off the mark. While there may have been market shudders, the predicted Great Panic of 2011 hasn’t struck.
Treasury’s warnings raise two important questions. Why has it served up visions of the apocalypse time and again and what have been the costs of it being wrong?
The most obvious cost has been an incremental loss of credibility, with even the oft-cited Aug. 2 deadline for Congressional action now widely questioned. Reluctant Congressional Republicans, Geithner’s intended audience, long ago lost their faith in Treasury and view the deadline warnings as mere political spin.
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http://blogs.wsj.com/developments/2011/07/28/bailout-watchdog-says-homeowners-shortchanged/Bailout Watchdog Says Homeowners ShortchangedThe federal watchdog that oversees the Wall Street bailouts is questioning whether the Obama administration has done enough to punish mortgage companies for poor performance in its main loan-assistance program.
The watchdog’s office is officially known as the Special Inspector General for the Troubled Asset Relief Program. It has been run by Acting Special Inspector General Christy Romero since Neil Barofsky, the office’s first director, left to teach law at New York University earlier this year. Mr. Barofsky was a thorn in the Obama administration’s side, issuing strongly worded critiques of the housing programs and the 2008 bailouts in general.
In a quarterly report released Thursday, the inspector general’s office supported the Treasury Department’s decision, announced in June, to sanction mortgage servicers for poor performance in the government’s Home Affordable Modification Program. However, the report questioned whether enough companies have been punished. “Clearly, many homeowners are not getting the fair shake they deserve from some of the largest servicers in determining who gets the benefit of a HAMP mortgage modification,” the report said.
The Treasury Department in June moved to withhold millions of dollars in fees from Bank of America, Wells Fargo and J.P. Morgan Chase, saying they need to improve how they administer loan workouts.
But the inspector general’s report noted that other mortgage companies also have fared poorly under the program. The report noted that it is unclear how Treasury determined which companies received poor enough ratings to merit withholding of payments and which ones did not.
In a letter sent in response to the report, Tim Massad, assistant Treasury secretary for financial stability, said the administration has “incorporated most of (the inspector general’s) specific recommendations for these programs.”
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