TARP Watchdog: Treasury Uses Fuzzy-Math to Mislead the American People on AIG Returns
WASHINGTON D.C. – The Special Inspector General of the Troubled Asset Relief Program (SIGTARP) Neil Barofsky, released a report today raising new questions surrounding the accuracy and methodology of projections (Retrospective) recently released by the Treasury Department suggesting that taxpayers might profit from the taxpayer-funded bailout of AIG.
“It is nothing short of a betrayal of public trust for the Treasury Department to deliberately manipulate data in a transparent attempt to mislead the American people,” said Rep. Darrell Issa (R-CA), the Ranking Member of the House Committee on Oversight and Government Reform. “This Administration is institutionalizing a culture that ignores the American people’s right to know and their call for more transparency in government. For the sake of consistency and honesty, the Treasury Department should immediately publish new numbers using the previous methodology.”
Specifically, the report found:
- “Treasury’s projections are subject to a degree of uncertainty,” the report reads. “The Retrospective, however, abandoned the published Methodology…[Treasury] did not disclose that this methodology differed from that used previously…would not and could not be used in Treasury’s fiscal year 2010 TARP financial statements…fails to meet basic transparency standards…
- “This conduct has left Treasury vulnerable to charges that is has manipulated its methodology for calculating losses to present two different numbers depending on its audience: one designed for release in early October as part of a multifaceted publicity campaign touting the positive aspects of TARP and emphasizing the reduction in anticipated losses, and one, audited by the Government Accountability Office (“GAO”), for release in November as part of a larger audited financial statement. Here again, Treasury’s unfortunate insensitivity to the values of transparency has led it to engage in conduct that risks further damaging public trust in Government.
- “Compounding this potential harm was the comparison made during the rollout of the Retrospective of the lowered projected losses with older estimates. This leaves Treasury vulnerable to additional criticism for making what some might characterize as an apples-to-oranges comparison, disclosing the change in the relative amounts of losses, but not accompanying change in methodology used to calculate those losses.”