Good for the TARP watchdog.
Team Obama tried to tighten his leash. He bit back. Turbo Tax Tim Geithner tucked tail.
The Treasury Department backed away from a standoff over the independence of the special government watchdog appointed to scrutinize how last year’s $700 billion financial-industry bailout is being spent.
Neil Barofsky, special inspector general for the Troubled Asset Relief Program, a position also known as Sigtarp, declared victory Wednesday in his effort to clarify that he doesn’t answer to Treasury Secretary Timothy Geithner.
Mr. Barofsky has gained a reputation for his aggressive posture and demands for information from government officials and Wall Street. The former federal prosecutor is charged with tracking the money spent to prop up the banking system during the financial crisis and to report the results of his audits directly to Congress.
In a letter Wednesday to members of Congress, Mr. Barofsky said the Treasury had withdrawn an earlier request to the Justice Department seeking a legal opinion on how much independence the Sigtarp office enjoys. Mr. Barofsky had told lawmakers he feared that being subject to the Treasury secretary’s supervision would be “a threat to our independence.”
“We view such withdrawal as Treasury’s acknowledgment that Sigtarp is an independent entity within Treasury, and that my office and I are not subject to the supervision of the secretary,” Mr. Barofsky said in his letter to a group of lawmakers, including Sen. Charles Grassley (R., Iowa) and Rep. Darrell Issa (R., Calif.), who have pushed for his independence. “We applaud Treasury’s decision to bring to a close this needless distraction,” Mr. Barofsky said.
The Treasury Department declined to explain the reason for the withdrawal of its request to the Justice Department.
In related news, here’s a round-up of bloggers/analysts unpacking the spin on TARP “profits.”