Auditor wants more TARP information

The U.S. Treasury is receiving a bit of pressure from the internal watchdog that is overseeing the U.S. government's financial bailout. The special inspector, General Neil Barofsky, wants more information from the banks that received TARP funds, and he has his own bank survey to prove it can be done.

According to Barofsky's personal study, more than 80% of the banks responding to his survey said the TARP money they received was used for loans or to avoid reduced lending. Barofsky also said that fewer than a third of the 360 banks he surveyed said their lending levels would have been lower without the TARP funds.

My biggest issue with the TARP money was that there was no requirement for the banks to track the money, or to report what the money was used for -- despite assertions that the money was to be used to increase loans, one way or the other. There has to be some way to track this, and Barofsky has proven this. Of course, this is being dismissed by Assistant Treasury Secretary Herbert Allison (the top official in charge of the program for the Treasury) because, "it is not possible to say that investment of TARP dollars resulted in particular loans, investments or other activities by the recipient." The Treasury does conduct its own survey, which reported that outstanding loan balances were flat in May.

As citizens and taxpayers, we should know what the money is spent for -- but Barofsky did note that the banks did not quantify the amount of new lending or the difference in lending from the bailout funds. However, if (as Barofsky asserts) the banks budget how they would use TARP money, then why wouldn't we be able to know more? It is our right -- at least last time I checked.