Tag Archives: Neil M. Barofsky

Prepared Remarks of Former Special Inspector General for the Troubled Asset Relief Program (“SIGTARP”) Neil M. Barofsky Before the U.S. Senate Committee on Homeland Security and Governmental Affairs (Part IV of IV)

by Neil M. Barofsky

These remarks have been edited for length and are being published in four parts. The following post is Part IV of Neil M. Barofsky’s prepared remarks, which were delivered on July 28, 2020. For Part I of this post, click here. For part II, click here. For Part III click here. 

With so much public money at stake, it is critical that Congress do what it can to ensure that government aid is not being stolen, wasted, or given to political cronies.  It is just as critical, as already noted, that taxpayers are aware of how and to whom their money is being distributed.  In the CARES Act, Congress demanded comprehensive oversight to guard government aid, and provided what was described as overlapping and redundant oversight entities to ensure full coverage.  It also included some conflicts of interest provisions intended to prevent government officials and their families from benefitting from certain programs.

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Prepared Remarks of Former Special Inspector General for the Troubled Asset Relief Program (“SIGTARP”) Neil M. Barofsky Before the U.S. Senate Committee on Homeland Security and Governmental Affairs (Part III of IV)

by Neil M. Barofsky

These remarks have been edited for length and are being published in four parts. The following post is Part III of Neil M. Barofsky’s prepared remarks, which were delivered on July 28, 2020. For Part I of this post, click here. For part II, click here. 

I will now turn to the various Federal Reserve programs I previously detailed.  For the first two of the Federal Reserve’s key CARES Act facilities mentioned above—the Main Street Program and the Municipal Liquidity Facility—lending is still largely non-existent several months after they were announced, even after the Federal Reserve made repeated attempts to expand eligibility for the programs.  This is, in part, because these facilities were intended by Treasury and the Federal Reserve as a backstop for eligible entities, which by design are intended to become most attractive to borrowers should the debt markets for such entities seize up again.  And it is undeniable that the mere announcement of the Federal Reserve’s programs had the intended effect, helping to restore liquidity to these markets.  But it is a question for Congress as to whether this is enough, and whether these funds should be distributed more immediately to a broader set of struggling entities, on more generous terms.  This would certainly get more money into the economy more quickly, but would also significantly increase the risk of losses, as well as the possibility of depleting funds should the debt markets take a significant turn for the worse. 

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Prepared Remarks of Former Special Inspector General for the Troubled Asset Relief Program (“SIGTARP”) Neil M. Barofsky Before the U.S. Senate Committee on Homeland Security and Governmental Affairs (Part II of IV)

by Neil M. Barofsky

These remarks have been edited for length and are being published in four parts. The following post is Part II of Neil M. Barofsky’s prepared remarks, which were delivered on July 28, 2020. For Part I of this post, click here.

My testimony concerning the effectiveness of the CARES Act will focus on the lending programs administered by the SBA, Treasury, and the Federal Reserve, with specific attention on the most active of these programs, the PPP.  First, there is no question that the PPP has had a significant and positive impact on millions of small businesses, with a recent study by the Federal Reserve and others estimating that it helped preserve more than 2.3 million jobs.[1]  But by no means should there be a declaration of mission accomplished.  Chiefly, there has been a significant lack of transparency by Treasury and the SBA in the program that makes it difficult to fully assess its integrity, fairness (particularly to traditionally underbanked businesses), or overall effectiveness.  In order to fully assess the program, additional measures will be needed to increase transparency and oversight.  In addition, available information suggests that meaningful sums may have been lost or misdirected because the program design elevated the risk of fraud and misuse by borrowers.

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Prepared Remarks of Former Special Inspector General for the Troubled Asset Relief Program (“SIGTARP”) Neil M. Barofsky Before the U.S. Senate Committee on Homeland Security and Governmental Affairs

by Neil M. Barofsky

These remarks have been edited for length and are being published in four parts. The following post is Part I of Neil M. Barofsky’s prepared remarks, which were delivered on July 28, 2020.

As the former Special Inspector General of the Troubled Asset Relief Program (“SIGTARP”), I established and supervised the audit division that monitored the financial assistance provided to companies and individuals as part of the historic TARP program.  I also provided real-time advice and oversight as the U.S. Department of Treasury (“Treasury”) developed and implemented the programs that are serving as the model for much of what it is using in response to the current crisis.  I regularly reported to Congress on that work.

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