The inspector general overseeing the Troubled Asset Relief Program has launched six audits, looking into such matters as executive compensation at companies that got taxpayer capital and the role of external influences in awarding bailout money.
Neil M. Barofsky, the inspector general for TARP, announced the audits in a quarterly report to Congress last week. The office is one of a number of oversight bodies charged with ensuring that the $700 billion dedicated to the program is spent properly.
The six audits trace areas of growing public concern about the bailout. One of them, for instance, examines how TARP recipients are handling the question of executive compensation.
TARP rules limit the tax deductibility of executive compensation to $500,000 per employee, and impose restrictions on incentive compensation and "golden parachute'' payments for departing executives. These restrictions have been controversial and even prompted some banks to return the money rather than submit to them.
The inspector general's office also is investigating the handling of bonuses at American International Group Inc. After the federal government spent $152 billion bailing out the insurance giant, it announced that it was obligated to pay up to $1.2 billion in bonuses to its executives, some of whom were in the derivatives department that led to the company's near-collapse.
Critics also have raised questions about the effect of external influence on the awarding of bailout money, including pressure put on Treasury by members of Congress and certain industry officials. The inspector general's office said it was conducting an audit on that matter as well.
"This audit seeks to determine what procedures are in place to avoid undue outside influence on the process, whether there are any indications of any undue influence, and what actions might be needed to strengthen existing processes to avoid such undue influences in the future," the report said.
The two other audits under way concern an examination of how TARP recipients are spending the money, and a close look at the Treasury's decisions to bail out the first nine institutions to qualify for the program.
That audit, the inspector general's office said, evolved out of an examination of the review and approval process leading up to the decision early in the program to bail out Bank of America Corp. and support the bank's purchase of Merrill Lynch & Co.
Neil M. Barofsky, the inspector general for TARP, announced the audits in a quarterly report to Congress last week. The office is one of a number of oversight bodies charged with ensuring that the $700 billion dedicated to the program is spent properly.
The six audits trace areas of growing public concern about the bailout. One of them, for instance, examines how TARP recipients are handling the question of executive compensation.
TARP rules limit the tax deductibility of executive compensation to $500,000 per employee, and impose restrictions on incentive compensation and "golden parachute'' payments for departing executives. These restrictions have been controversial and even prompted some banks to return the money rather than submit to them.
The inspector general's office also is investigating the handling of bonuses at American International Group Inc. After the federal government spent $152 billion bailing out the insurance giant, it announced that it was obligated to pay up to $1.2 billion in bonuses to its executives, some of whom were in the derivatives department that led to the company's near-collapse.
Critics also have raised questions about the effect of external influence on the awarding of bailout money, including pressure put on Treasury by members of Congress and certain industry officials. The inspector general's office said it was conducting an audit on that matter as well.
"This audit seeks to determine what procedures are in place to avoid undue outside influence on the process, whether there are any indications of any undue influence, and what actions might be needed to strengthen existing processes to avoid such undue influences in the future," the report said.
The two other audits under way concern an examination of how TARP recipients are spending the money, and a close look at the Treasury's decisions to bail out the first nine institutions to qualify for the program.
That audit, the inspector general's office said, evolved out of an examination of the review and approval process leading up to the decision early in the program to bail out Bank of America Corp. and support the bank's purchase of Merrill Lynch & Co.
published April 28, 2009, 0 Comments
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