WASHINGTON --- Senator Chuck Grassley has asked Treasury Secretary Tim Geithner to account for the Treasury Department not implementing numerous recommendations to safeguard tax dollars dedicated to the TALF program, a federal program designed to ensure access to credit by eligible households and businesses.
Grassley said the outstanding recommendations were detailed in the recent quarterly report to Congress made by the Special Inspector General for the Troubled Asset Relief Program, or TARP. The Term Asset-Backed Securities Loan Facility, or TALF, was a second bailout program created after the original stated mission of TARP was changed less than a month after Congress passed legislation.
Last week, Grassley asked the Treasury Secretary about the failure to implement the Special Inspector General’s recommendation that the Treasury Department require TARP participants to provide information about how they’ve used TARP funds.
Grassley fought for creation of the Special Inspector General for TARP, and worked to pass legislation to expand the watchdog’s powers when the purpose of TARP was altered by the previous Treasury Secretary.
“After a little over a year, it’s pretty clear that neither the former nor the current Treasury Department has made it a priority to facilitate transparency and the accountability it helps to bring about when it comes to the massive taxpayer-sponsored bailout programs,” Grassley said. “It should be the other way around, with the Treasury Department acting as a pro-active trustee of these tax dollars.”
The text of the letter Grassley sent today follows.
November 13, 2009
The Honorable Timothy F. Geithner
Secretary
U.S. Department of the Treasury
1500 Pennsylvania Avenue, NW
Washington, DC 20220
Dear Secretary Geithner:
Recently, my staff conducted a review of the Quarterly Report to Congress dated October 21, 2009, prepared by the Office of the Special Inspector General for the Troubled Asset Relief Program (SIGTARP/OIG). One of the responsibilities of the OIG is to provide recommendations to the U.S. Department of the Treasury (Treasury). Many of these recommendations were designed to facilitate transparency, effective oversight, and to prevent fraud, waste, and abuse of taxpayer money.
As you know, the Term Asset-Backed Securities Loan Facility (TALF) program was created by the Federal Reserve to ensure that creditworthy households and businesses have access to credit. As part of its ongoing effort to protect taxpayer money released through TARP, SIGTARP has recommended that Treasury take several steps in relation to TALF. It is with great concern that I learn that many of these recommendations have not been implemented. Specifically, Treasury has not implemented the following SIGTARP recommendations:
1) Agreements with TALF participants should include acknowledgements that the participants are subject to OFS-Compliance and SIGTARP oversight;
2) Parties on whom conditions are imposed as part of TALF should establish internal controls and certify compliance with those conditions;
3) Treasury and the Federal Reserve should provide for public disclosure through SIGTARP the identity of borrowers who surrender collateral in TALF; and
4) Treasury should dispense with rating agency determinations and require security-by-security screening for each legacy Residential Mortgage-Backed Security (RMBS).
In addition, taxpayers across the United States are greatly interested in knowing how their money is being spent and whether their government is doing all it can to protect it from fraud, waste, and abuse. Accordingly, please provide me with an update on the status of these recommendations immediately. If no action has been taken, I ask that you state whether Treasury plans to implement the recommendation and, if not, why not.
I thank you in advance for your cooperation and request that you provide the requested documents and written responses by no later than December 4, 2009.
Sincerely,
Charles E. Grassley
Ranking Member
Cc: The Honorable Neil M. Barofsky
Special Inspector General
Office of the Special Inspector General
Troubled Asset Relief Program