Bailout Watchdog Defends Independence From Treasury

By Gorman Gorman

Jun 19, 2009 5:28pm

ABCNews' Matthew Jaffe reports:

Bailout watchdog Neil Barofsky today emphasized that his office was independent from the Treasury Department and the administration's decision to seek a Justice Department ruling was "unnecessary". Barofsky, the Special Inspector General for the Troubled Asset Relief Program (SIGTARP), sent a letter to Sen. Chuck Grassley, R-Iowa, and Rep. Darrell Issa, R-Calif., about the ongoing dispute with Treasury, as both sides await a decision from DOJ's Office of Legal Counsel."We continue to believe the inquiry to OLC is unnecessary given the very clear intent of Congress regarding our independence," Barofsky wrote. "An adverse ruling from OLC could potentially have a serious impact on the independence of our agency and our ability to carry out our mandate; and we believe that Treasury's position on these issues are entirely unfounded and have little chance of persuading OLC. Of course, should Treasury take actions that would impede our ability to independently conduct audits and investigations, we would report such interference to Congress without delay." Barofsky's letter, his first comments on the situation, came after Grassley and Republican members of the House Oversight Committee, led by ranking member Issa, inquired to the watchdog about the ongoing dispute. While Barofsky did note that "to date Treasury has not withheld any documents from my office on the grounds of privilege", the Department did initially decline to provide documents on AIG's bonus program that the watchdog requested for an audit on the insurance giant, the recipient of $180 billion in bailout money. Issa today called the situation "extremely troubling". "At a time when the Treasury and Federal Reserve are exercising unprecedented powers intervening in our economy, the independence of the SIGTARP is one of the few checks and balances that remain," the California lawmaker said in a statement upon receiving the SIGTARP letter. "It is extremely troubling that in the midst of SIGTARP's investigation into bonuses received by AIG executives, the Treasury Department would seek to exert control over this independent overseer." -Matt Jaffe

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