* Barofsky to leave as bailout inspector general March 30
* Pursued fraud among TARP recipients, criticized Treasury
(Adds statement from spokeswoman, details on fraud cases)
By David Lawder
WASHINGTON, Feb 14 The top government auditor
for bailouts of U.S. financial firms and automakers on Monday
resigned his position as the $700 billion Troubled Asset Relief
Program winds down.
Neil Barofsky, 40, will leave as TARP Special Inspector
General on March 30, in part, to spend more time with his
family, a spokeswoman said. He has spent more than two years
policing the bailout program.
In a resignation letter to President Barack Obama, Barofsky
wrote that he had accomplished the goals he set for the office
and that it "has truly been an honor to serve, particularly
during such a critical time."
The spokeswoman said that Barofsky, who previously headed
the mortgage fraud unit at the U.S. Attorney's office in
Manhattan, would take some time to consider employment
Barofsky's deputy, Christy Romero, will head the operation
until Obama nominates a permanent replacement for Barofsky.
Barofsky was nominated as TARP's first special inspector
general in November 2008 by then-President George W. Bush just
after the $700 billion bailout program was launched by Congress
during the depths of the financial crisis.
Since then, he has pursued fraud in the program and
criticized its shortcomings, building an organization of more
than 140 auditors, investigators, attorneys and other staff.
The staffing of regional offices in New York, San Francisco,
Los Angeles and Atlanta continues.
Authority for new spending programs under TARP ended last
October and the Treasury is working on winding down its
investments in financial firms and automakers. A new Obama
administration estimate forecasts that TARP will ultimately
cost about $28.12 billion.
A companion bailout watchdog body, the Congressional
Oversight Panel, will end in April.
FRAUD CASES RISING
SIGTARP's mission will continue until the last dollar has
been repaid -- likely several more years. Barofsky told Reuters
in September that evidence of fraud involving TARP recipient
banks was on the rise and he had more than 120 open
investigations, some with amounts exceeding $550 million.
His most celebrated case involved preventing the
disbursement of $553 million to a bank that was involved in a
fraud scheme to obtain TARP funds.
U.S. Representative Darrell Issa, the chairman of the House
Committee on Oversight and Government Reform, praised Barofsky
for his dedication but said SIGTARP's work was far from
"It is imperative that the next IG pick up immediately
where Barofsky left off," Issa, a sharp critic of the
Treasury's handling of TARP, said in a statement.
Barofsky said in his letter that he believes SIGTARP has
met its goals to build a robust enforcement agency to ensure
transparency in TARP's operation and provide effective
oversight to minimize waste, fraud and abuse.
In addition to policing TARP, Barofsky has been critical of
the program's inability to meet its goals to preserve home
ownership and to reduce moral hazard in the financial sector.
"Important parts of TARP continue to struggle: more than
150 TARP recipient banks have missed their regular dividend
payments, and the Home Affordable Modification program has so
far fallen short" of legislative mandates, Barofsky wrote.
"Indeed, with more than $150 billion in TARP funds
outstanding and close to $60 billion still available to be
spent, robust and effective oversight of TARP remains vitally
However, his warning in 2009 that the total potential cost
of government bailouts could reach $23.7 trillion never came
true, and he recently conceded that the Treasury will likely
earn a profit on its most controversial programs.
(Reporting by David Lawder, Editing by Kenneth Barry)