Desperately Seeking Oversight

We are pleased that the President has finally decided on his pick for Special Inspector General to oversee the bailout--now that half the money is already out the door, with little transparency and not much oversight.

We don't know much about Neil Barofsky yet, but we are impressed that his background includes prosecutorial experience in both securities fraud and mortgage fraud, in the hard-charging U.S. Attorney's office for the Southern District of New York, i.e., Manhattan--long regarded as one of the most elite prosecutors' offices in the country.  (In fact, at Main Justice in D.C., its nickname has long been “the Sovereign District of New York,” for its go-it-alone attitude.)  But we think that kind of knowledge and background will be critical for his new gig.

As the Washington Post reported on Thursday, there is political squabbling on Capitol Hill as to which committee will have jurisdiction for Barofsky’s confirmation – Finance or Banking.  We take no position on that question; we just want him confirmed quickly.  The Finance Committee has scheduled a hearing for Monday.  Of course, vetting a candidate thoroughly over the course of a weekend is not really possible.  In the best of all possible worlds, the nominee for such an important position would be subjected to lengthy and thorough scrutiny.  But we just don’t have that time available.

In the meantime, we call on both Congress and the administration to ensure greater transparency in their dealings with the bailout package, the Troubled Asset Relief Program, or TARP.  Funny enough, the program already seems to have morphed from dealing with troubled assets to buying stock in banks.  But the original legislation only gives the new SIGTARP the authority to oversee aid to those original “troubled assets.”  We urge Congress in the lame duck session due to begin next week to consider amending the legislation to make clear that Mr. Barofsky will have authority to poke into any and every use to which those $700 billion are put.

Secondly, we want to see the legislation amended so that Barofsky can quickly hire the staff he needs without having to follow the usual civil service rules.  His is a “special” IG appointment, like that of the SIGIR looking into Iraq reconstruction, and he needs the flexibility to be able to staff up quickly and get working A.S.A.P.

-- Beverley Lumpkin