We’ve spent today hungrily consuming every single word of TARP Special Investigator Neil Barofsky’s financial crisis tell all, ‘Bailout: An Insider Account of How Washington Abandoned Main Street While Rescuing Wall Street,‘It’s a pretty compelling behind-the-scenes look at the chaos of trying to save our economy from utter ruin, and there are tons of untold stories.
We can only share a few, obviously, but here’s one we really liked — the story of how Tim Geithner tried to kill TARP oversight in one fell swoop.
Barofsky writes that the night before his team was to interview the lawyer at the Treasury handling AIG bonuses, he found out that the Treasury was working to postpone the interview. The Treasury’s argument for doing so was that they weren’t sure they would be able to protect privileged information disclosed by Treasury officials during the SIGTARP interviews unless SIGTARP was a part of the Treasury.
And by ‘a part’ of the Treasury, they meant subordinate to the Treasury — SIGTARP oversight would then not be an independent agency as originally intended. The Department of Justice was asked to rule on the matter.
Barofsky “blew a gasket” when he heard about this. If the DOJ confirmed the Treasury’s argument, the Treasury would have ultimate power over anything that SIGTARP did that could “have a significant influence on the economy or on market behaviour.” The Department of Justice was tasked with ruling on whether or not this was the case.
Barofsky sought the council of a former White House lawyer working in D.C. and it confirmed his worst fears:
“They are totally trying to f— you,” he warned, “Geithner or someone very close to him got it in his head that he can cut your balls off with this and make your life hell. You need to move fast. Before the DOJ f—s you, because they will.”
Barofsky immediately mobilized Senator Chuck Grassley (R-IA) and together they got the Treasury to back off —but it took some doing, and according BarofsKy this wasn’t the end of the Treasury’s interference.