IG for TARP Funds Says the Treasury Abdicated Its Responsibility for Oversight of AIG

bartleby the scrivener |  There.  He said it.  I feel a little better now.

"It was a failure of oversight by Treasury" that led to the spring's bonus fiasco, watchdog Neil Barofsky told the House Oversight and Government Reform Committee this morning, a failure for which he said Treasury Secretary Tim Geithner was ultimately responsible.

Treasury essentially abdicated its oversight duties of AIG's compensation structures to the Federal Reserve Bank of New York, which was "a recipe for disastrous consequences," said Barofsky...Ultimately, Geithner did not learn about the bonuses until March 10, three days before they were paid out, despite running the Treasury Department since January and, before that, the Federal Reserve Bank of New York, where officials knew about the payments last November. At that time, both parties agreed that there was no legal grounds to stop the payments, a correct determination, according to Barofsky. (ABC News)

As the article points out, AIG is due in March to pay out another $198 million in retention payments, though "pay czar" Ken Feinberg is even now negotiating for a reduction.  Feinberg's evidently due to testify before the same House panel in two weeks concerning executive compensation at seven firms that have received corporate welfare from taxpayers. (ABC News) As the panel's chair said:

"It just doesn't seem right that the people who caused this tragedy should be so richly rewarded." (ABC News)

Deb Cupples has written extensively on executive compensation at recipients of corporate welfare.  Others at this blog have also commented:

Bail-Out Watchdog & TARP Inspector Neil Barofsky Warns that We Are Now in a "Far More Dangerous Place"

Get Your Pitchforks Ready: Corporate Welfare Recipient Economy-Buster AIG Wants Federal "Compensation Czar" Kenneth Feinberg to Give His Blessing to Another Round of Giant Executive Bonuses

Colbert Hails the Triumphant Return to Wall Street of the Credit Default Swap; Takes On Capitalism's Enemy, Michael Moore

Our Unreformed Financial System

Wall Street Bailouts: Paulson had Conflicts of Interest? Say it Ain't So!

Govt. Allows Wall Street Firms to Shaft Us Taxpayers? Say it Ain't So!

Inspector General: Banks Used TARP Funds Designed to Increase Lending to Defray Expenses, Increase Investments, Buy New Assets

Worst Comeback Ever: Struggling Americans Fed Up with Giant Windfalls to Investment Bankers

Vanity Fair on AIG's Collapse

Whatever Happened to Those Banks' Toxic Assets?

Shareholding Senator Helped Bank Get TARP Funds

The Daily Show: AIG Buys a Vowel & Obama Drops a Cap on Executive Compensation's Ass by Dropping the Cap on Executive Compensation

If Govt. Can Reduce Auto Execs' s Pay, Why not Bank Execs' Pay

Krugman: Will Executive Compensation at Investment Banks Soar Back to 2007 Levels?

"Top Talent" Fleeing Regulated Banks?

Florida's Alan Grayson on His First Bill: The Pay for Performance Act ("No One Should Get Rich Off Abject Failure")

Panel Head Wants Execs Fired from Bailed-out Banks

More False Anaologies from the Right Wing: this Time re: Executive Pay Caps

Bank Execs Might Give Back TARP Money if They Can't Pay Themselves Obscenely Well

Financial Times Explains Why Giethner-Summers Plan is Basically a Sham

Sweeping Oversight Proposed re: Executive Pay & Other Things

Congressman Alan Grayson on Why AIG Went Broke ; Questioning Change to Valuation Rules ("Let's Make Inches Larger While We're at It")

House Passes a Bill to Levy a 90% Tax on Executives at Rescued Firms; Political Posturing Intensifies

AIG Scapegoats Feel Your Anger

AIG Execs Explain Why They Deserve Their Bonuses; AIG Explains Why It Has to Pay Them

Rage Against the Machine: Sen. Grassley Urges Japanese Model for AIG Execs ("Resign, or Go Commit Suicide")

Update: AIG to Give Bonuses and the Resulting Political Theatre

AIG Gets Another $30 Billion: the Real Scandal

Geithner "Plan" for the Banking Industry Provokes Sarcasm, Outrage, Despair, & Bitter PostPartisan Laughter

Obama's Executive-Pay Caps Don't Address the Root Problem

Meanwhile Obama & Dodd Scold the Bastards Who Helped Themselves to Massive Taxpayer-Funded Bonuses ("Shame!")