Treasury Department Admits Challenging Independence of TARP Inspector General

Jun 18, 2009 7:53pm

ABC News' Jake Tapper and Matt Jaffe report: Officials of the Treasury Department admitted late Thursday that they have asked the Justice Department to weigh in on how much power they have over the Special Inspector General for the $700 billion Troubled Asset Relief Program, known as SIGTARP.

The push for a legal ruling on SIGTARP's independence came after Special Inspector General Neil Barofksy had asked Treasury Department officials to hand over documents regarding a TARP recipient, a request that was denied.

Sen. Chuck Grassley, R-Iowa, in a letter to Secretary Tim Geithner earlier this week, said that he understood the denial to have been based on "a specious claim of attorney-client privilege."

In the Treasury Department's first official comments on this issue, spokesman Andrew Williams today acknowledged the request to the Justice Department.

"The request to clarify the SIGTARP’s complex legal status within the executive branch was sent to the Department of Justice only after Department of Treasury consulted with Mr. Barofsky who had no objection," Williams told ABC News.
 
In requesting the legal review, Williams said, "the Treasury Dept included Mr. Barofsky's own legal analysis of the issues along with the Department’s position."

Treasury tonight also provided an unredacted April 7 memo from Barofsky to the Department's counsel during this back-and-forth over SIGTARP's attempt to get documents.

In the letter to Geithner earlier this week, the lawmaker had written, "It is my further understanding that this disagreement then escalated into broader questions about whether SIGTARP is subject to your direct supervision and direction, which may have been referred outside Treasury for an independent legal opinion."

Along with confirming the DOJ request, Williams also said tonight that "no documents have been withheld from the SIGTARP based on the attorney-client privilege."

But Williams did not say that no documents have ever been withheld from the watchdog.  Williams did note that ultimately "all documents requested by the SIGTARP have been produced to date."

- Jake Tapper and Matt Jaffe

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