Inspector General Christy Romero has released her report on the state of TARP, the Troubled Asset Relief Program. Taxpayers are still owed $133 BILLION of the $700 BILLION allocated, of which only $414 BILLION was spent. The fraud in TARP was rampant. The list below will not be the end of fraud reporting. Interesting thing about Christy Romero is that she worked as “counsel” to now-SEC head Mary Schapiro during the Bernie Madoff Ponzi scheme scandal. Madoff’s son worked for for Schapiro, and it seems she ignored whistleblowers whistling loudly.
Jan. 2011: “As of December 31, 2010, SIGTARP had 142 ongoing criminal and civil investigations…”
Jan. 2012: “As of December 31, 2011, SIGTARP had more than 150 ongoing criminal and civil investigations…”
Jan. 2011: There were “criminal convictions of 13 defendants for fraud”
Jan. 2012: There were “criminal convictions of 31 defendants, of whom 22 have been sentenced to prison (others are awaiting sentencing)”
Jan. 2011: SIGTARP reported “civil or criminal actions against 45 individuals to date, including 22 senior officers (Chief Executive Officers, owners, founders, or senior executives)”
Jan. 2012: SIGTARP reported “criminal actions against 61 individuals, including 45 senior officers (CEOs, owners, founders, or senior executives) of their organizations)”
Jan. 2011: There were 12 “civil cases naming…corporate entities as defendants”
Jan. 2012: There were 18 “civil cases naming…corporate or other legal entities as defendants…” (The Blaze)
Add the above and coming legal costs to the $133BILLION owed taxpayers. Is it possible any of those charged with fraud will be forced to pay their own legal bills? Wouldn’t that be history-making?
Romero reports that we will not recoup a portion of TARP funds (SIGTARP Report).
Some programs were designed as a Government subsidy with no return to taxpayers. Treasury has already written off or realized losses of $12 billion and Treasury predicts losses on other TARP investments.
Government programs, including TARP, to ‘fix’ the mortgage crisis will go on for years, with a coming cost to taxpayers of an estimated $50B. From past experience, you can double that.
Still owing TARP funds to you and me, selected from 458 institutions:
AIG: Owes about $50B. US Government owns 1.5B shares of AIG stock. Selling it at $28.73/per share will settle the debt. Friday’s close was $27.17. Flooding the market with AIG shares will take the share price lower, according to Fox News’ Gerry Willis.
GM: $25B (GM is feeling so good about their sales of vehicles in China that they have resumed charitable (?) giving – an opera house and an African American museum. Nothing to the stockholders who lost everything when they the company went into bankruptcy. Then there’s todays Super Bowl ad at about $3.5M per airing).
Banks still owing (see Gerry Willis link above):
Ally Financial, once GM’s GMAC: We hold a 74% stake after giving them $17B. Ally is not publicly traded.
This doesn’t even include Chrysler or Fannie and Freddie.
Bottom line – Bank of America and the other big banks may have paid back the bailout with interest, but TARP is far from being over.
The 371 banks that still owe money include Regions Financial Corp., which owes $3.5 billion; Zions Bancorporation, $1.4 billion; Synovus Financial Corp., $967.9 million; Popular Inc., $935 million; First Bancorp of San Juan, Puerto Rico, $400 million; and M&T Bank Corp., $381.5 million.
You can find more unfinished business in bank shutdowns. The FDIC swooped in and closed four banks last Friday night. Two of Friday’s victims are in Tennessee, where the last bank failure took place in 2002. The others are in Florida and Minnesota.
That makes seven banks for the month of January, an annual pace of 84. Close to last year’s total of 92, but lagging 2010’s peak of 157.
There is one notable increase: the FDIC’s “loss ratio.” Of the 92 bank failures last year, FDIC losses totaled 20% of the failed banks’ assets. So far this year, it’s 32.9%, nearing TARP territory.
Upon release of Romero’s report, the announcement came that Romero is replacing IG Neal Barofsky as TARP Special Inspector General. Romero was counsel to SEC Chairwoman Mary Schapiro, who let Bernie Madoff work his swindle in spite of whistleblowers, and worked a terrific deal for her own transparency in Dodd-Frank.
[my previous post]…the financial reform bill [Dodd-Frank] exempts the SEC from transparency. Perhaps even bigger news is that the corrupt DOJ is also exempt. The bottom line, no transparency at either agency. Is this how we will fund the creeping lawlessness at the DOJ? Mary Shapiro, SEC head, and Eric Holder are free to ignore whistleblowers again, and hide whatever needs to be hidden. Did the Republican senators on the Senate Banking, Housing and Urban Affairs Committee know the DOJ and the SEC were exempt?
Madoff’s son also worked for Schapiro.
Romero served as an attorney in the SEC Division of Enforcement investigating financial fraud, insider trading, abusive short selling by hedge funds, market manipulation, and violations of foreign bribery laws from December 2007 through August 2009. Madoff pleaded guilty to scamming billions from investors in a Ponzi scheme in March 2009. Neal Barofsky left his position in March 2012 to take a position as adjunct professor at New York University Law School.