TARP Fear: Hundred-Billion-Dollar Fraud?

Just in from a Capitol Hill reporter — one more thing to worry about…

The top watchdog for the financial rescue plan warns today that there could be "hundreds of billions of dollars in taxpayer money lost to fraud" as the government spends trillions in taxpayer funds to pull the nation out of its current crisis. "We stand on the precipice of the largest infusion of government funds over the shortest period of time in our nation’s history," Neil Barofsky, Special Inspector General for the Troubled Asset Relief Program, says in prepared testimony for today’s hearing before the House Financial Services Subcommittee on Oversight and Investigations. "History teaches us that an outlay of so much money in such a short period of time will inevitably draw those seeking to profit criminally."

Barofsky points to hurricane relief, Iraq reconstruction, and the savings and loan bailout as past examples. "If, by percentage terms, some of those estimates of fraud in those programs apply to the TARP programs, we are looking at the potential exposure of tens if not hundreds of billions of dollars in taxpayer money lost to fraud," he warns. "We must be vigilant."