Monday
Nov172008
Bailout bill oversight within sight
Although weeks have past since the Program was approved and $290 billion of the first $350 billion has already been pledged, the President has announced his nomination: Neil Barofsky, Assistant United States Attorney in the Souther District of New York. Appearing before the Senate Finance Committee, Barofsky outlined his professional background and explained how he would utilize his position to bring about proper oversight.
“This past summer, our United States Attorney asked me to supervise a newly created Mortgage Fraud Group to respond to the havoc that mortgage fraud has caused to countless homeowners and lenders in our district...we attacked at the roots of those who have contribute significantly to the current housing and financial crisis through wholesale fraud of homeowners, lenders, and investors,” said Barofsky.
“‘[It] has given me the tools to identify the markers of fraud throughout the financial industry, the necessary expertise in investigating such frauds, and the experience of establishing a plan of attack on those committing these fraud.”
Committee member Senator Charles Schumer (D-N.Y.) elaborated on Barofsky’s previous experiences.
“Mr Barofsky demonstrated great personal bravery when he investigated the Revolutionary Armed Forces of Columbia, FARC, the narco-terrorist group that controls more than half the world’s annual cocaine production. He successfully indicted the FARC’s top 50 leaders at great risk to his own personal safety,” said Schumer.
Following Congress’s initial rejection of the Troubled Assets Relief Program, the bailout bill was subjected to numerous alterations. One important change was the addition of an inspector general to provide the program with oversight.
Barofsky described how he would bring his investigative experience to the position, stating “We will need to establish an investigative arm, which I can assure this committee will tirelessly investigate and refer for prosecution any individual or entity that tries to criminally profit from the Program.
Senator Jay Rockefeller (D-W.V.) warned that banks and those high up in financial institutions have ways of “slipping things by” and essentially asked if Barofsky would be a tough enough inspector general to provide proper oversight to which Barofsky responded, “I won’t give you empty words. Instead I’ll just point to my record and what I’ve done as a prosecutor in the Southern district of New York. Whether it was attacking the FARC in the jungles of Columbia or Refco on Wall Street, all I’ve done is to go after those who violated the law. And I will take that exact same tenacity and dedication to this job as I’ve done with every prosecution I’ve worked on.”
“This past summer, our United States Attorney asked me to supervise a newly created Mortgage Fraud Group to respond to the havoc that mortgage fraud has caused to countless homeowners and lenders in our district...we attacked at the roots of those who have contribute significantly to the current housing and financial crisis through wholesale fraud of homeowners, lenders, and investors,” said Barofsky.
“‘[It] has given me the tools to identify the markers of fraud throughout the financial industry, the necessary expertise in investigating such frauds, and the experience of establishing a plan of attack on those committing these fraud.”
Committee member Senator Charles Schumer (D-N.Y.) elaborated on Barofsky’s previous experiences.
“Mr Barofsky demonstrated great personal bravery when he investigated the Revolutionary Armed Forces of Columbia, FARC, the narco-terrorist group that controls more than half the world’s annual cocaine production. He successfully indicted the FARC’s top 50 leaders at great risk to his own personal safety,” said Schumer.
Following Congress’s initial rejection of the Troubled Assets Relief Program, the bailout bill was subjected to numerous alterations. One important change was the addition of an inspector general to provide the program with oversight.
Barofsky described how he would bring his investigative experience to the position, stating “We will need to establish an investigative arm, which I can assure this committee will tirelessly investigate and refer for prosecution any individual or entity that tries to criminally profit from the Program.
Senator Jay Rockefeller (D-W.V.) warned that banks and those high up in financial institutions have ways of “slipping things by” and essentially asked if Barofsky would be a tough enough inspector general to provide proper oversight to which Barofsky responded, “I won’t give you empty words. Instead I’ll just point to my record and what I’ve done as a prosecutor in the Southern district of New York. Whether it was attacking the FARC in the jungles of Columbia or Refco on Wall Street, all I’ve done is to go after those who violated the law. And I will take that exact same tenacity and dedication to this job as I’ve done with every prosecution I’ve worked on.”
tagged 
Barofsky, TARP, bailout bill, schumer in Congress, News/Commentary
Barofsky, TARP, bailout bill, schumer in Congress, News/Commentary
Whistleblowers Welcome
Deputy Director of the FBI, John Pistole, Special Inspector General for the Troubled Assets Relief Program, the Honorable Neil Barofsky and Acting Assistant Attorney General Rita Glavin from the Criminal division testified before a full room at a Senate Judiciary Hearing today, to discuss "The Need for Increased Fraud Enforcement in the Wake of the Economic Downturn."
Chairman of the Committee, Senator Patrick Leahy (D-Vt) said: "This is not a partisan issue...we want to strengthen fraud enforcement, the Justice Department, the FBI, the Office of the Inspector General, the Department of Housing and Urban Development and even the Postal Inspection Service."
"One thing I learned as a prosecutor...you can have all the laws of the world in the books but if you don't have the resources to enforce the laws, and actually go out there after people who have broken the laws, they are meaningless."
"We do know that banks and private mortgage companies relaxed their standards for loans, proving ever riskier mortgage and less and less due diligence, it's almost like open the door and saying, 'Hey, come on in fraud is welcome'," Senator Leahy continued.
Also discussed at the hearing were the measures on how to tackle fraud now and in the future in relation to the economic crisis, catching criminal activity, and the Madoff scandal.
With regard to whistleblowers there seemed to be a unanimous agreement by the witnesses, that whistleblowers are an important tool in tackling fraud.
John Pistole said: "Anybody who has credible information, that can help either predicate or enhance investigation we look forward to working with."
Rita Glavin stated that "The Department has enjoyed tremendous success from working with whistleblowers...we have obtained essentially $10 billion in the past 10 years...the Department believes that whistleblowers, who are often insiders, can serve a vital function in our law enforcement efforts in exposing potential fraud in connection with government programs."
Neil Barofsky announced at the hearing that the TARP program encourages people to contact their hotline which can be found on their website if they have any information on fraud. TARP has hired a lawyer to follow all hotline enquiry leads. Barofsky said he would rather they went through 99 false lines of enquiry in order to avoid missing that one real piece of information.
Asked by Senator Edward Kaufman (D-Del) what were the most obvious fraud cases that TARP would move on quickly in order to attempt to get the most number of prosecutions, Neil Barofsky said: "Going after licensed professionals...focussing on exclusively the gatekeepers; the lawyers, the appraisers, the licensed mortgage brokers...making examples of those and letting their colleagues know that criminal behavior in these types of mortgage frauds is unacceptable, because they have the most to lose."