* TARP watchdog says U.S. taxpayer could be affected
* Audits into role of BlackRock in TARP may expand
WASHINGTON, April 20 The special inspector
general for the government's bailout program said he would
probe whether securities sold by Goldman Sachs Group Inc (GS.N)
led to losses at AIG and if the American taxpayer was a victim
Goldman Sachs was charged last week with fraud by the U.S.
Securities and Exchange Commission over its marketing of a
subprime mortgage product.
The SEC's charges concern Abacus, a synthetic
collateralized debt obligation that hinged on the performance
of subprime residential mortgage-backed securities, and which
the regulator said Goldman structured and marketed.
According to the SEC, Goldman did not tell investors "vital
information" about Abacus, including that Paulson & Co was
involved in choosing which securities would be part of the
portfolio Paulson was separately betting against.
There are seven deals similar to Abacus for which AIG wrote
credit default swaps, according to Neil Barofsky, the special
inspector general for the Troubled Asset Relief Program.
American International Group Inc, or AIG, is the insurance
behemoth largely owned by U.S. taxpayers after its government
bailout last year.
Barofsky said he is in touch with the SEC and will possibly
coordinate with the Department of Justice "to see if there are
cases of fraud and if AIG and as a result, the American
taxpayers, were victims of similar types of fraud."
Barofsky made the comments in response to questions from
the ranking Republican on the Senate Finance Committee, Charles
Grassley, at a hearing examining the TARP.
Separately, but also in response to questions, Barofsky
said he is considering a broader audit of the role of BlackRock
Inc (BLK.N) in TARP.
"We are doing a number of audits that touch on Blackrock's
role. And it is an extensive role throughout this financial
crisis," Barofsky said.
For example, current audits, including one on Citigroup
Inc's (C.N) asset guarantee program, touch on Blackrock, he
"We are considering doing a more overarching audit report on
their role throughout the financial crisis."
(Editing by Padraic Cassidy)