The Office of the Special Inspector General for the Troubled Asset Relief Program today announced that more than $1.48 billion has already been recovered as a result of its investigations of crime and civil violations of the law related to the Troubled Asset Relief Program, as of December 31, 2014. $1.26 billion has been returned to the government, and $224 million has been returned to other victims of crime related to TARP. Additionally, as a product of a SIGTARP investigation, the government experienced a savings of $553 million in TARP funds that SIGTARP prevented from being disbursed to the now-defunct Colonial Bank.
On paper, the system worked; the fraud and criminal behavior was caught by the inspector general, prosecutors pressed charges against the criminal, and the funds were recovered.
But TARP has a terrible reputation in the minds of America’s public; the perception is that while millions of Americans endure hard times, the federal government was willing to hand over billions upon billions in taxpayer money to save wealthy bankers from the consequences of their own bad decisions.
Back in 2011 I wrote, “that financial market-saving move came at enormous political and social cost, accelerating a corrosive distrust of almost everyone even remotely associated with banks, big business, wealth, or the political system.” The fact that there’s been nearly one and a half billion dollars recovered from criminal enterprises will only add to the perception that the whole thing was a hastily executed, poorly thought-out, insufficiently overseen mess that benefited those who didn’t deserve it.
It’s not a good move for the federal government to shovel massive amounts of money out the door as quickly as possible; criminals and frauds will flock to an opportunities on that scale like rats to cheese.