Neil Barofsky sat down with Bloomberg reporter Richard Teitelbaum recently giving a wide-ranging interview on his time as the Special Inspector General (SIG) over what has become the $700 billion “hydra-headed beast encompassing 13 financial aid plans” known as the Troubled Asset Relief Program or TARP for short. The piece gives a good bit of insight into Barofsky’s past as a federal prosecutor including his time as a one time kidnap target of the FARC, a Columbian NARCO terrorist organization we previously explored in connection with the politically connected ownership of Republic Insurance in the Lindner family. Here are a few excerpts of the article where we also find out Treasury Secretary Tim Geithner is now in the crosshairs beginning with Barofsky’s office space at Treasury:

The space assigned to him as head of the Office of the Special Inspector General for the Troubled Asset Relief Program, or SIGTARP, was shoehorned into the basement, three floors below U.S. Treasury Secretary Henry Paulson’s offices.

“They eventually discovered a broken sewer main beneath the floor,” says Barofsky, 40, adding that he doesn’t think any slight was intended by relegating him to the malodorous quarters. Still, he says with a smile, “I wasn’t given the prime real estate in Treasury.”

I get the idea the SIGTARP folks were not feeling the love at Treasury and for good reason as they represented the fly in the ointment for moneyfest underway at the Fed and Treasury and their specially invited guests Goldman Sachs and Goldman’s bitch AIG:

The TARP watchdog has also criticized Treasury Secretary Timothy F. Geithner in reports and in congressional testimony for his handling of the process by which insurance giant American International Group Inc. was saved from insolvency in 2008, when Geithner was head of the Federal Reserve Bank of New York.

The secrecy that enveloped the deal was unwarranted, Barofsky says, adding that his probe of an alleged New York Fed coverup in the AIG case could result in criminal or civil charges.

In Senate Finance Committee testimony on April 20, Barofsky said SIGTARP would investigate seven AIG-linked mortgage-related securities similar to Abacus 2007-AC1, the instrument underwritten by Goldman Sachs Group Inc. that is at the center of a U.S. Securities and Exchange Commission lawsuit filed against the investment bank on April 16.

And of course we should all remember Louisiana Insurance Commish Jim “Jimbo the Clown” Donelon waxing nonsensical last July at Commissioner Chaney’s Insurance forum how property and casualty insurers under state regulation did just fine from a solvency standpoint vis a vie the financial crisis. Aside from the obvious failure of AIG we learn a bit more about insolvent property and casualty insurer Hartford Financial Services Group, a company with a penchant for pumping up pricing via sham reinsurance transactions as we continue:

In a December report, Barofsky showed how insurance giants Hartford Financial Services Group Inc. and Lincoln National Corp. bought tiny thrifts — one with just $7 million in assets — to qualify for the TARP Capital Protection Program, which is designed to encourage bank lending. Hartford and Lincoln used the more than $4.3 billion in TARP funds they received almost entirely to finance insurance operations, according to the report.

“Treasury didn’t have to approve that,” Barofsky says.

Allison wrote SIGTARP that buying troubled assets from insurance companies was part of TARP.

Janet Tavakoli, founder of Chicago-based Tavakoli Structured Finance Inc., says Barofsky hasn’t been aggressive enough. She says SIGTARP should be running criminal probes of the bankers who underwrote and managed the collateralized debt obligations that were at the center of the financial meltdown.

CDOs are bundles of mortgage-backed bonds and other debt sold to investors.

Tavakoli says the CDO managers sometimes replaced relatively high-quality securities with new ones that were more likely to default.

The entire article is well worth the read. As a bonus we’ve found some old clips of Timmy on the news giving his side of the story. Am I the only person that is having a hard time understanding what the boy is saying?

[youtube=http://www.youtube.com/watch?v=IiZ4C3k0Z4U]

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