Treasury may seek to remove watchdog from small business lending program

David Cho
Washington Post

Senior Treasury officials have told the financial bailout program’s inspector general that they are considering excluding a new $30 billion small-business lending initiative from the watchdog office’s oversight.

The message, delivered at a meeting last week, sparked outrage from Republicans, who accused the Treasury of taking revenge on the watchdog for writing a series of scathing reports. Neil M. Barofsky, the special inspector general for the bailout, urged the Treasury to reconsider, arguing in a letter that the department was acting “contrary to the best interests of the taxpayer.” …

…Developing the small-business lending initiative with money from the Troubled Assets Relief Program has been a struggle for the Obama administration. The program has a stigma within the financial community, and many banks say that taking federal aid would make them look unhealthy. They also do not like the conditions that are attached to TARP funds, such as executive pay limits and the oversight from Barofsky’s office…

…The proposal, however, requires congressional approval, and the Obama administration could struggle to win Republican support if its proposal does not give Barofsky’s office oversight over the new initiative, said Rep. Darrell Issa (R-Calif.), the ranking member of the House Oversight and Government Reform Committee.

Issa called Treasury’s decision to exclude Barofsky’s office, commonly called by its acronym, SIGTARP, “disturbing” and “chilling.”…

The entire article is at the Washington Post.

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