SIGTARP Audit Report: Officials Deceived American Public About the Health of Nine Financial Institutions

According to a audit report made public today by The Office of the Special Inspector General for the Troubled Asset Relief Program (“SIGTARP”), “senior government officials”, appointed by the Bush Administration, deceived the American public last fall when they claimed that the nine financial institutions to first receive TARP funds were healthy.

Special Inspector General Neil Barofsky, is in charge of The Office of the Special Inspector General for the Troubled Asset Relief Program, or SIGTARP.

While announcing the initial $125 billion TARP injection to these nine financial institutions on October 14 of 2008, then Treasury Secretary Henry Paulson declared, “These are healthy institutions, and they have taken this step for the good of the U.S. economy. As these healthy institutions increase their capital base, they will be able to increase their funding to U.S. consumers and businesses.”

SIGTARP’s audit report questions Paulson’s declaration of the financial institutions’ health when it was abundantly apparent that “senior government officials had affirmative concerns about the health of at least some of these institutions.”

You can find the audit report here: Emergency Capital Injections Provided to Support the Viability of Bank of America, Other Major Banks, and the U.S. Financial System

Appendix H includes comments about the report from the Federal Reserve Board and Appendix I includes comments from the Treasury Department.

Tagged as: Bush Administration, Federal Reserve, Neil Barofsky, SIGTARP, The Office of the Special Inspector General for the Troubled Asset Relief Program, Treasury Secretary