Special Inspector General for the Troubled Asset Relief Program Act of 2009

Madam Speaker, a good bill is, in fact, not necessarily the democratic process at work. I am disappointed that the majority chose to forego oversight committee responsibilities on this TARP IG.

In an exchange of letters with the chairman, whom I respect a great deal, we have failed to reconcile that. Although this piece of legislation arrived in the House on February 9, it never got a hearing or a markup in the committee of primary jurisdiction on all of the IGs. This is not a bad piece of legislation, Madam Speaker. It could be better. It would be better if the majority did not choose to, in their own words, say that there was not time to consider these other items. Madam Speaker, something cannot arrive from the Senate on February 9 and yet have to be passed on March 25 because there was no time. We have had far greater time than we had to do it wrong in the TARP. The speakers on both sides of the aisle have made the very valid point that ``ready, shoot aim'' was the mistake of the TARP.

I don't believe that this will be an impossible situation. What I do believe is that the democratic process here in the House has been violated once again. Perfectly good, by their own statement, amendments were suggested by the Republican minority on the Financial Services Committee. Yet they were rejected, not based on their merit but based on that it would have taken more time. They would have had to send it back to the Senate. The Senate would have had to have a deliberative process.

Madam Speaker, we are not allowed here in the House to speak ill of the Senate--of the other body--or of the President and the Vice President, but I think we certainly can speak that, if we can be told there is not time to get it right, the Senate should be asked, couldn't they, in fact, be given the time--a day or two or three--to look at amendments that we have considered and that have been rejected on time. I know that is not going to happen. I know that this bill will pass either unanimously or with substantial approval, but this is yet another example of a body who has not recognized that a crisis is not an excuse to move legislation, no matter how well-intended, prematurely or as less than what it should be.

I enjoy working with the chairman of the committee. I believe he is a good man who wants to increase transparency and oversight. I believe we have missed an opportunity here today to do that little bit better that we both promised to do when we were elevated to these positions. So, Madam Speaker, I will vote for this bill. I will vote for this bill because it is more good than bad, but it could have been better.

Madam Speaker, I am disappointed that the Majority has unilaterally elected to forgo Oversight and Government Reform Committee consideration of this legislation, which will affect the billions of dollars disbursed under the troubled asset relief program (TARP). Despite the Majority's pledge of openness and transparency, they have chosen to discharge this legislation from our Committee and deny the Members of our Committee, and the citizens they represent, a voice in this important legislation.

The TARP suffers from a serious lack of transparency and accountability. As of February 6th of this year, the Treasury Department has committed $300 billion in taxpayer funds to our nation's financial institutions in the form of preferred shares and warrants, loans and insurance against losses. While the Treasury Department currently monitors aggregate monthly levels of some banking activities, it does not require any recipient of TARP funds to disclose the details of any individual transaction that the recipient would not have entered into but for the receipt of TARP money. In other words, we do not know whether $300 billion of taxpayer money has changed anyone's behavior. As a result, neither the Treasury Department, nor Congress, nor the general public truly knows the outcome achieved by the injection of taxpayer funds.

Given the magnitude of the TARP program and the critical importance of focused oversight of this program, avoiding consideration of this legislation in an open, bipartisan process, goes against our shared desire to bring transparency to this massive expenditure of taxpayer funds.

The House received this legislation on February 9, 2009. Since that time, the Oversight Committee has had the benefit of hearings, testimony, policy developments, and institutional action, all of which could improve this legislation. For example, at our hearing on March 11, ``Peeling Back the TARP: Exposing Treasury's Failure to Monitor the Ways Financial Institutions are Using Taxpayer Funds Provided under the Troubled Assets Relief Program'', Special Inspector General Barofsky agreed with the need for greater transparency in the TARP program, and Democrats and Republicans had suggestions that could have improved this bill.

For example, if given the opportunity, I would have offered an amendment to this legislation to deliver true transparency in the TARP program, by requiring all data disclosed by TARP recipients to be disclosed in a standard, consistent, and structured format. This is essential to ensure transparency and accountability for TARP funds. Without this amendment, TARP recipients will be able to continue reporting data on how they have used taxpayer money received under TARP in any data format they choose, obscuring important information.

During a hearing before the Domestic Policy Subcommittee of the House Oversight Committee, Mr. Kucinich and I pressed the SIGTARP on his ability to sift through the survey responses he has received from TARP recipients. We pointed out to him that merely relying on ``narrative responses'' in a non-standard format from banks would not deliver the kind of transparency and accountability the American people demand. Rather, we have to insist on access to the raw data in order to achieve complete transparency. Mr. Barofsky said that he doesn't have the resources to sift through such data. I agree. However, putting the data in a standardized and machine-readable format would allow investors, regulators, and the public to use innovative technology solutions to sift through these mountains of data.

In addition, I would have offered an amendment to this legislation that would increase the SIGTARP's hiring flexibility so that he would have sufficient latitude to hire the qualified experts he needs. These changes would have enabled SIGTARP to more effectively executive its responsibilities in oversight of the program. Unfortunately, due to the Majority's stifling of debate on this legislation, we will not have the chance to discuss these important ideas.

One conclusion we have learned from the rush to legislate on the TARP, the stimulus bill, appropriations bills, and various bailouts, is that citizens want expedient, but well considered, solutions before we act. Unfortunately, yet again, it appears that transparency, oversight, and Member participation have taken a back seat to political expediency.

Madam Speaker, I move to suspend the rules and pass the Senate bill (S. 383) to amend the Emergency Economic Stabilization Act of 2008 (division A of Public Law 110-343) to provide the Special Inspector General with additional authorities and responsibilities, and for other purposes.

Madam Speaker, I ask unanimous consent that all Members have 5 legislative days in which to revise and extend their remarks on this legislation and to insert extraneous material.

Madam Speaker, I yield myself as much time as I may consume.

We are in a deep and painful economic downturn, the likes of which we haven't seen in decades. Just last month our economy lost over 650,000 jobs for the third straight month, bringing the total number of jobs lost since December 2007 to 4.4 million. That's more than 1\1/2\ times the entire population of my home State of Kansas.

But something we should remember, Madam Speaker, is our financial sector must be stabilized and confidence restored before we see any economic recovery.

My constituents, like most Americans, are anxious and frustrated, and they deserve the strongest oversight and accountability of how their taxpayer dollars are spent.

When Congress enacted the Emergency Economic Stabilization Act last October, the new law not only created the Troubled Assets Relief Program, or TARP, we made sure to include strong oversight protections for United States taxpayers, such as the creation of the Special Inspector General for TARP or SIGTARP.

Last month, Mr. Neal Barofsky, the newly appointed SIGTARP, testified before the House Financial Services Oversight and Investigation Subcommittee. He said that after adding up all the Federal programs utilizing TARP funds, the total amount of money potentially at risk was approximately $2.875 trillion.

Mr. Barofsky went on to say, ``We stand on the precipice of the largest infusion of government funds over the shortest period of time in our Nation's history. 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. We are looking at the potential exposure of tens if not hundreds of billions of dollars in taxpayer money lost to fraud. We must be vigilant.''

As chairman of the Oversight and Investigations Subcommittee, I couldn't agree more. We must be vigilant to protect the United States taxpayers.

I worked with my friend, Ranking Member Judy Biggert, as well as Congressmen Steve Driehaus and Eric Paulsen, and we introduced H.R. 1341, a companion bill to the Senate bill, S. 383 we are considering today. The Senate has already unanimously approved this bill twice. Most recently, Senator Claire McCaskill introduced this legislation last month, and the Senate approved the bill the same day. This bipartisan legislation equips the SIGTARP with the tools he needs by, No. 1, making clear the SIGTARP has the audit and investigative authority over any taxes taken by the TARP program; No. 2, giving the SIGTARP the authority to hire auditors and staff quickly by granting him temporary hiring authority; No. 3, requiring the Treasury Secretary to explain why any SIGTARP recommendation is not implemented; and, No. 4, mandating that the SIGTARP issue a report no later than September analyzing how TARP funds have been spent to date.

Gene Dodaro from GAO and Professor Elizabeth Warren from Congressional Oversight Panel testified they supported S. 383, and Mr. Barofsky testified that he ``desperately needs more hiring flexibility, the type of which is contained in S. 383.''

He said, ``Quick passage of this important and essential legislation will allow me to hire rapidly the essential personnel to meet the challenges of providing effective oversight. I believe that this bill will help provide the necessary resources for us to meet our obligation to help protect the U.S. taxpayers' investments.''

There are additional issues we should consider, such as CO's request to hire retired annuitants, and other suggestions made at our committee markup that we will continue to monitor. I will note the amendments offered were well-intended, but they did little other than give special emphasis to activities

already authorized by SIGTARP's mandate in current law or as expressed in S. 383.

Conversely, if we included those amendments it would have had the effects of substantially slowing down the bill because it would require further action by the Senate.

Most importantly, I think it's telling that not one Financial Services Committee member, Republican or Democrat, voted against this bill at the markup. And not one Senator, Republican or Democrat, voted against this bill. Protecting taxpayer money should be a nonpartisan effort, and I believe this bill keeps with that spirit.

In light of the SIGTARP's testimony and the urgency of his request, and with legitimate public outrage over the AIG bonuses and other misbehavior by TARP recipients, it's important now more than ever that we approve this bipartisan bill today so we can send it straight to the President's desk for signature.

I urge my colleagues to support S. 383, and I reserve the balance of my time.

Madam Speaker, I would like to thank Congressman Paulsen for his work as well on this legislation. I think he is exactly right. We need to pass this on a bipartisan basis.

At this time, Madam Speaker, I yield 2 minutes to the gentlelady from California, Congresswoman Speier.

I yield an additional minute to the gentlewoman.

Madam Speaker, I yield 5 minutes to the chairman of the Committee on Oversight and Government Reform, Chairman Towns of New York.

Madam Speaker, I yield 2 minutes to the gentleman from New York (Mr. Hinchey).

Madam Speaker, we have no more speakers, and we reserve the remainder of our time.

Madam Speaker, I yield myself such time as I may consume.

I want to thank Representative Paulsen for his contributions here and his work on this legislation.

Let me close by urging my colleagues to support S. 383. I don't know how anyone can argue with the fact that the United States taxpayers we represent deserve strong oversight of how their funds are used, and this bill will do just that. Support this bipartisan bill so we can equip the Special Inspector General for TARP with the staff and authority he needs to track the use of TARP funds and limit any waste, fraud and abuse in the program.

I yield back the balance of my time.

Madam Speaker, on that I demand the yeas and nays.

Madam Speaker, I yield myself as much time as I may consume.

Madam Speaker, I rise in strong support of Senate bill 383, the Special Inspector General for the Troubled Asset Relief Program Act.

It is clear that both the Bush and Obama administrations, as well as Congress, have failed to include adequate oversight of taxpayer dollars being spent through the Troubled Asset Relief Program, the TARP bill.

The lack of oversight and transparency are why one of my first votes in Congress as a freshman Member was against the release of the additional $350 billion in TARP bailout spending that companies like AIG are currently receiving.

When Congress is literally spending billions and billions of taxpayer dollars, it is critical that we have the most stringent oversight and transparency possible. The good news is that we have a chance to act on this important issue today.

The legislation before us gives broad authority for a Special Inspector General to oversee any remaining spending of TARP funds. This bill will provide the Special Inspector General with the authority to conduct, to supervise and to coordinate an audit or any investigation of any action taken with regard to TARP funds. It also will require the Special Inspector General to submit quarterly reports to Congress, while also requiring the Secretary of the Treasury to take action, or certify that no action is necessary, when any problems or deficiencies are identified by the inspector. And of course the bill also requires that the reports on institutions who receive TARP funding be posted on the Special Inspector General's Web site within 24 hours after being submitted to Congress so the public has access to this information as well. Simply put, this bill represents a major break from the past.

Madam Speaker, the American people deserve to know when Washington is spending taxpayer dollars, and we are making every effort with this legislation to ensure that those dollars are being spent wisely. And while some of us, including me, continue to have serious concerns about the sweeping and the expanding role of government involvement in the private sector, I do believe that we can all agree today that increasing oversight of the money that's currently being spent is the right thing to do.

As a new Member, I came to Washington hoping to fix broken policies that have plagued Congress for far too long. We have the ability to make that change, and this bill is a move and a step in the right direction. It will take a bipartisan effort from Congress and the administration, but we must make it.

And along those lines, I want to thank especially the chairman of the Oversight and Investigation Subcommittee, Congressman Moore, for his leadership on this issue and bringing this effort forward in a bipartisan basis.

I also want to commend the ranking member, Ms. Judy Biggert, for her efforts and leadership as well. I appreciate their efforts to work together in a bipartisan way in crafting this legislation.

And I, of course, want to thank the committee staff for their tireless work that they have put on behind the scenes. They have been an extremely valuable resource.

So, Madam Speaker, the bill we have before us today will help us bring accountability to a program that spends hundreds and hundreds of billions of dollars of taxpayer money, and I urge my colleagues support. American taxpayers deserve no less.

Madam Speaker, I reserve the balance of my time.

Madam Speaker, I would like to now yield 5 minutes to the distinguished ranking member of the Domestic Policy Subcommittee of the Oversight and Government Reform Committee, the gentleman from California (Mr. Issa), who takes the role of being a taxpayer watchdog very seriously and works very hard at that effort.

(Mr. ISSA asked and was given permission to revise and extend his remarks.)

Madam Speaker, I would now like to yield 2 minutes to the distinguished gentleman from the 10th Congressional District from Georgia (Mr. Broun).

Madam Speaker, I yield myself as much time as I may consume.

Madam Speaker, again, I came to Washington with the goal of increasing transparency and accountability in the way that taxpayer dollars are being spent. I know many of us share that goal. Certainly, the subcommittee chairman does. Unfortunately, it is abundantly clear that the initial TARP bailout funding is being spent without proper oversight. There is no doubt.

When the Federal Government is literally spending hundreds of billions of dollars, it is critical that we have the most stringent oversight of that spending. That is our obligation to the taxpayer, especially now when our constituents are being forced to do much more with much less. They have the absolute right to know that their money-- it is their money--is being spent properly and wisely. This legislation will give additional tools to help ensure that there is proper tracking, proper accounting and proper oversight for all the spending of taxpayer dollars going forward.

As the subcommittee chairman knows, in committee, we heard testimony about the potential for additional waste, additional fraud, additional abuse. This ensures we will have protection from that. So I ask my colleagues to vote in support of this legislation.

I yield back the balance of my time.

Madam Speaker, as chairman of the Committee on Oversight and Government Reform, I rise in support of S. 383, the Special Inspector General for the Troubled Asset Relief Program Act of 2009.

It has been over 5 months since Congress approved the $700 billion rescue plan for the financial industry. During this time, the oversight committee has documented the accountability and transparency shortcomings of the program. I have asked before and I will ask again:

What did the American people get or what can they expect to get from the $700 billion rescue plan?

It is my goal to make sure that the taxpayers receive meaningful answers to these questions to make certain that the money is spent wisely and to ensure that waste, fraud and mismanagement is avoided. I am pleased to support this legislation because I have no doubt that such oversight of the TARP program will greatly benefit from these measures to strengthen the TARP Special Inspector General.

As Special Inspector General Barofsky told our Domestic Policy Subcommittee earlier this month, more than $300 billion has already been expended. The spending program is up and running, but the office designed to oversee this spending has not yet been provided with all of the authority it needs to do this job effectively. These are his words.

We should not wait a moment longer. S. 383 provides this authority. It allows the SIGTARP to conduct oversight over all aspects of the TARP program. It also grants the SIGTARP the temporary hiring authority needed to quickly put in place the staff that the IG needs to conduct critical audits of the program. Under normal circumstances, I would not advocate any deviation from the normal civil service hiring process. I would say that is what we should follow, but these are anything but normal circumstances. These critical audits and investigation positions should be filled right away. I should note that, even with its current modest staff, the SIGTARP has demonstrated its effectiveness in overseeing the TARP program.

Last month, I wrote to Treasury Secretary Geithner, urging him to adopt the recommendations made by Mr. Barofsky in his initial report to Congress. I asked that all TARP agreements include language requiring funding recipients to provide information to the SIGTARP and other inspectors general to establish internal controls and to clarify compliance. Importantly, S. 383 would require the Treasury Secretary to report back to Congress if any recommendations made by the SIGTARP are not adopted.

I look forward to working together with Mr. Barofsky and with Secretary Geithner to ensure transparency in the TARP program. I believe this legislation is an important step in restoring our economy. It will provide greater accountability to the taxpayers who are funding the TARP program, and I urge its adoption.

Let me just say that I want to thank all who have worked on this because I think this is legislation that is very, very important, and I think this is legislation that is going to help us eliminate waste, fraud and abuse.

Thank you, Mr. Chairman, for your leadership.

I rise today in support of S. 383 to authorize the Special Inspector General to hire the essential staff needed to follow the money and provide accountability for the billions of dollars taxpayers have invested in financial institutions.

I must say, Madam Speaker, that this particular function is among the most critical in government today. Aggressive and competent oversight is absolutely necessary for any of these government programs to operate effectively.

Last year, when the House voted for the Emergency Economic Stabilization Act, I raised concerns about potential problems that could hamper TARP. Among them, conflicts of interest and a lack of transparency were the most serious. I was encouraged that leadership was committed to keep a close watch on taxpayer money. This bill honors that commitment.

Within weeks of the passage of the Stabilization Act I had an opportunity to speak with Gene Dodaro from the Government Accountability Office and Dr. Elizabeth Warren, Chair of the Congressional Oversight Panel. Their reports to Congress have been illuminating in what banks have and have not done with the TARP funds. And both of these individuals have stressed the need for competent and knowledgeable staff to provide proper oversight.

I first met Mr. Neal Barofsky, the Special Inspector General, at a hearing of the Oversight Investigation Subcommittee of the Financial Services Committee, and found his testimony and answers to questions to be frank and extremely well thought out.

Now, he may ruffle some feathers in this city that doesn't like having its feathers ruffled, but he is precisely the kind of person we need to do that job.

I was disappointed to hear that Mr. Barofsky lacked the staff he needed to oversee such a massive outlay of taxpayer money. This bill allows the Special Inspector General to hire 25 retired annuitants. These are people who are retired from Federal service but who have the know-how, who have the ability and who, frankly, will cost us less money because we are not paying for the retirement benefits. These employees are desperately needed, as the article in yesterday's Washington Post provided.

Madam Speaker, I have spoken with our subcommittee Chair, Mr. Moore, about the need to give similar hiring powers to Dr. Warren at the Congressional Oversight Panel, and soon will introduce legislation authorizing that.

We ask the American people to take a huge leap of faith with us when we pass the Emergency Economic Stabilization Act. It is imperative that we protect the taxpayers' investment by providing adequate staffing to conduct the vital oversight and accountability functions.