American taxpayers are unlikely to recover all of the $700 billion the government has spent bailing out the nation's banks, automakers and insurers, according to the inspector general overseeing the effort.
In addition, the Treasury Department has failed to live up its promises of openness and transparency about how it allocates funds under the Troubled Asset Relief Program.
"TARP largely remains a program in which taxpayers are not being told what most of the TARP recipients are doing with their money and will not be told the full details of how their money is being invested," Neil M. Barofsky, the special inspector general for the TARP program, said in remarks prepared for testimony before Congress.
Although banks have returned approximately $70 billion out of the more than $200 billion they have so far received, many of the other programs under the TARP umbrella are unlikely to see much return at all, Barofksy said. Chief among them are the efforts to save the domestic automobile industry and modify home mortgages, both of which required large cash outlays with little potential upside.
Barofsky also charged the Treasury Department with failing to act on his earlier recommendations about transparency. In previous testimony, he had suggested that the department keep closer tabs on communications between regulators and members of congress seeking special bailout attention for constituent banks. He also had said that Treasury was not doing enough to make sure that bailout funds were being used to lend money into communities rather than support generic business activities.
In April, he said his office had opened six investigations into bailout-related issues, including involving external influence on the awarding of bailout money and the use of bailout money to pay executive bonuses.
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