The unbearable opacity of TARP: Government agencies can’t tell us who’s in charge


The new report to Congress from SIGTARP — the Special Inspector General for the Troubled Asset Relief Program — begins by noting that TARP has evolved into “12 separate, but often interrelated, programs involving government and private funds of up to almost $3 trillion” of an “unprecedented scope, scale, and complexity.” The report highlighted the possibilities of fraud and conflicts on interest in the bailout process and calls for better disclosure. We continue to find that even some of the most elementary details about the program — like who is actually managing distribution of the bailout money to financial institutions — is still shrouded in secrecy.

At Sunlight we’ve been contacting the agencies responsible for reviewing applications for TARP funds made by banks including the Federal Deposit Insurance Corporation, Office of Thrift Supervision and the and the Office of the Comptroller of Currency to provide us a list of people involved in deciding which bank gets how much money under TARP. In “Who’s Manning the TARP Desk”, we documented the process bank regulators follow while deciding if a bank should get bailout money, and identified the officials–all holdovers from the Bush administration–who make the final decisions on disbursing TARP funds at Treasury. But they rely on analysis that come from the FDIC, OTC and the OCC. So we contacted those agencies to find out who does those reviews.

At first the FDIC’s press spokesperson refused giving out names of the people involved, telling us, “There is no list of people that makes the decision, it’s made by the applications department.” Then they asked us to make a Freedom of Information Act request, which we did.

In answer to the FOIA, Sunlight received an email that might best be described as a hedged response. The email contained about 20 bios with a caveat: “[W]hile it is assumed that some of these persons may participate in the oversight or coordination of some of the FDIC’s activities with respect to ‘TARP,’ we have not confirmed and are not representing that all of these persons did, in fact, review, oversee or coordinate all of any of the applications about which your initial request pertains.” According to the FOIA officer, this information is not traditionally disclosed. They also noted that, under FOIA rules, they are not obligated to create lists (or documents or reports or anything else) — only to release documents that already exist. Apparently the FDIC maintains no list of people authorized to review applications from banks requesting TARP funds.

As to the series of bios that the FDIC put together for us: a handful of the employees (who may or may not have something to do with TARP) come from banking firms or have worked on Capitol Hill as staffers for committees that oversee the banking industry. Sandra Thompson, Director of FDIC’s Division of Supervision and Consumer Protection, worked with Goldman Sachs as an associate before moving to work with the FDIC. Martin Gruenberg, Vice Chairman, FDIC, served as Senior Counsel for Sen. Paul Sarbanes, D-Md., and on the staff of the Senate Committee on Banking, Housing, and Urban Affairs. Gruenberg’s work on legislation included Sarbanes-Oxley, a bill that required more corporate accountability in the wake of the Enron scandal.

The FDIC was actually more forthcoming with information than other agencies that review bank applications for TARP funds. For example, the one person I was able to contact at OTS (by no means the only person I tried to contact) agreed to speak, strictly on background, about the process and detailed information that banks have to submit, but declined to name people involved and said that most of the decisions were made by “senior management.”

Meanwhile, the composition of the TARP Investment Committee — the body at Treasury that makes final determinations on TARP funds — is changing. The Obama administration appointed Herbert M. Allison Jr. — who ran Fannie Mae for the Bush administration after the government seized the troubled institution in 2008 — to replace Neel Kashkari as assistant secretary for financial stability. Kashkari has been in that position since November 2008.

Several of our calls and e-mails to Treasury’s press offices remain unanswered and according to their Web site several of the positions in the public affairs office are still vacant. During one of my myriad attempts to get someone with the Office of Financial Stability to speak to, one of the operators said, “there’s no office yet, it’s only a Web site.” And surely enough six months after the office was set up the Web site doesn’t list any contact phone number but directs calls to Treasury’s press office.