The day began with this headline from The Washington Post: "Bailout Overseer Says Banks Misused TARP Funds."
The Post's take on the story:
Many of the banks that got federal aid to support increased lending have instead used some of the money to make investments, repay debts or buy other banks, according to a new report from the special inspector general overseeing the government's financial rescue program.
Now that report's been released, and we've put a copy here (fair warning, it's a big file and may take a little while to download).
This statement stands out in the executive summary:
TARP has become a program in which taxpayers (i) are not being told what most of the TARP recipients are doing with their money, (ii) have still not been told how much their substantial investments are worth, and (iii) will not be told the full details of how their money is being invested.
As the Post points out, "the government so far has invested more than $200 billion in more than 600 banks under a program that began in October with investments in nine of the largest banks. Some banks have started to repay the aid even as others continue to apply for it."
Today, Morning Edition guest host Linda Wertheimer spoke with Neil Barofsky, the special inspector general for the Troubled Asset Relief Program (he's the SIGTARP). Linda asked Barofsky about whether using TARP funds to buy other banks is a good use of such funds by institutions who've gotten the government aid. He said it's not a black-and-white issue:
There will be more from Linda's conversation with Barofsky on tomorrow's Morning Edition. Click here to find an NPR station near you.