American taxpayers could end up spending as much as $23.7 trillion in bailing out the financial system, but the U.S. government isn't disclosing with enough transparency how the money is being spent nor how the investment is performing.
That is the conclusion drawn by Neil Barofsky, the special inspector general of the Troubled Asset Relief Program (TARP), who is set to testify Tuesday before the House Oversight and Government Reform Committee.
Barofsky's post was created in fall by President Bush to "conduct, supervise, and coordinate audits and investigations," into how government funds were being used and to "prevent fraud, waste and abuse."
Barofsky is most critical of the U.S. Treasury in a quarterly report to Congress, set for release today. He says Treasury has refused to provide him information on the financial performance of taxpayers' investments.
The department, he says, has "repeatedly failed to adopt recommendations" that "are essential to providing basic transparency."
Republican lawmakers are seizing on the report as a sign that the administration is falling short of its promise of providing what Treasury Secretary Timothy Geithner said would be "unprecedented transparency."
Rep. Darrell Issa, R-Calif., ranking member of the House Oversight Committee, said Treasury "contradicts the promises made" and should be held accountable.
"I don't know how you can justify hiding from the American people how their tax dollars are being spent," he says.
In his report, Barofsky also criticizes the Federal Reserve, which administers the government's Term Asset-Backed Securities Loan Facility (TALF) that is aimed at making more credit available in the financial markets. The Fed has bought billions of dollars of securities backed by credit cards, car loans and student loans to ensure that consumers and businesses continue to get much-needed credit.
However, he says, both the Fed and Treasury have not adopted his recommendation of disclosing "the identity of any borrowers that fail to repay a TALF loan."
The Federal Reserve and Treasury didn't respond to requests for comment.