It’s been a tough week for Inspectors General. News of President Obama’s firing of Gerald Walpin, an act that stinks of crony protectionism on the part of the White House, was followed by the revelation that another Inspector General were given the boot by the International Trade Commission. Then we find that the TARP watchdog, Neil M. Barofsky, was challenged by the Treasury while he was investigating those fabled AIG bonuses:
Department lawyers had sent a message to Barofsky, special inspector general for the Troubled Asset Relief Program, suggesting that lawyer-client privilege could restrict some of his inquiries.
Within a day, Barofsky was assured there would be no impediment to his audits, and all requested documents were provided to his office.
But the proximity of the department’s challenge to Barofsky’s investigation has raised concerns about the timing of the two events.
And though the matter was resolved for the AIG inquiries, it leaves open the possibility of conflict in the future as audits of the massive program multiply.
Asked why Barofsky’s legal authority was challenged by the department just as the AIG inquiry began, Treasury Department spokesman Andrew Williams said: “It is entirely a coincidence.”
Sure it was. He was looking at Treasury:
The department’s skepticism about Barofsky’s authority was first disclosed in a letter Sen. Charles E. Grassley (R-Iowa) sent Wednesday to Treasury Secretary Timothy F. Geithner asking for information about a “dispute over certain Treasury documents” that he said were being withheld on a “specious claim of attorney-client privilege.”
At the time, it was not known that Barofsky’s inquiry focused on the Treasury Department’s role in approving AIG bonuses — a fact confirmed Thursday through sources familiar with the investigation.
All’s well that ends well, right? Not exactly. Now Treasury wants to gather the independent TARP Inspector General into the White House fold:
The special inspector general charged with overseeing the $700 billion bailout of the financial sector says he has been told by the Treasury Department that the agency has legal authority over his office, a claim that could threaten its independence…
A Treasury official said the department believes that putting Barofsky’s office under the supervision of the secretary will be helpful to the agency and give it privileges the office would not otherwise have.
Senator Grassley wants answers from Timothy Geithner:
Sen. Charles E. Grassley of Iowa, the ranking Republican on the Finance Committee, sent a letter to Treasury Secretary Timothy F. Geithner this week expressing concern about “potentially serious questions this issue raises about Treasury’s respect for the [special inspector general’s] independence and authority to access documents.” He asked Geithner to explain his views by next week.
Independence isn’t what it used to be.