Wonderland Wire

news that’s really fit to print

‘U.S. Bailout Plan Vulnerable to Fraud’

with one comment

21 Apr 09 | PTV

The $700 billion bailout plan could lead to more scope for fraud and poses risks for taxpayers, says the government’s bailout watchdog.


Neil Barofsky, the special inspector general for the $700 billion Troubled Asset Relief Program (TARP), said in a report that taxpayer risk was much higher than that of private parties in part of TARP known as Public-Private Investment Program (PPIP) which aims to buy troubled mortgages and securities.

“Aspects of PPIP make it inherently vulnerable to fraud, waste and abuse, including significant issues relating to conflicts of interest facing fund managers, collusion between participants and vulnerabilities to money laundering,” Barofsky said in his 250-page report to Congress on the bailout plan.

He called on the Treasury to impose strict rules to screen investors in such funds and for the disclosure of ownership stakes and all transactions in them.

The report warned that taxpayers could suffer big losses as they would be responsible for up $2.977 trillion in total TARP costs once additional Fed financing commitments and asset guarantees are added to the bailout.

Barofsky’s report did not reveal any special cases of fraud related to TARP, but said that his office has opened nearly 20 preliminary and full criminal investigations associated with the bailout program.

Advertisements

Written by Editors

21 April 2009 at 12:27 pm

One Response

Subscribe to comments with RSS.

  1. […] Posted by Editors on 24 April 2009 Peter Schiff on The Lew Rockwell Show regarding where the U.S. is heading and on CNN discussing the illegality of TARP following TARP special inspector general Neil Barofsky’s report of TARP fraud. […]


Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: