Holder: Justice Department Will Look Into TARP Recycling

Toward the end of a long House Judiciary Committee hearing with Attorney General Eric Holder, Rep. Brad Sherman said he'd heard enough about torture and wanted to change the subject.

"The Secretary of the Treasury has announced that whatever monies are repaid by the banks [participating in the Troubled Asset Relief Program] will then be recycled into other bailout expenditures or investments," said Sherman, "even though the statute is very clear that that money is supposed to go into the general fund of the Treasury."

The Democrat from California wanted to know: What does the Justice Department do when a another agency is clearly breaking the law?

"To the extent we in the Justice Department see...a legal deficiency that another department has, we would certainly share that view with them," Holder said. "Obviously to the extent we saw crimes occurring in other departments we would investigate them."

"I'll certainly look into the fact situations you described and we'll get back to you," he added.

Sherman's been flogging the issue of TARP recycling since Treasury Secretary Timothy Geithner said in April that the department plans to reuse $25 billion repaid by firms participating in the TARP's Capital Purchase Program. Sherman has been unable to get an explanation from the Treasury, even after he delivered a tirade from the House floor on Tuesday. And the department has offered no legal justification for the recycling in response to press inquiries (other than to flatly claim "the law says" it's okay to reuse CPP principal).

The Treasury is so unconcerned with Sherman's claims that Geithner announced on Wednesday that he had big plans to give the recycled money to small banks.

Sen. John Thune's (R-S.D.) office told the Huffington Post that the Treasury's actions are "counter to the intent of Congress," and prominent economists have mocked the Treasury's insistence that repaid principal under the CPP is exempt from the bailout bill's statement that revenue from troubled assets "shall be paid into the general fund of the Treasury for reduction of the public debt."

"It would be very interesting to know what other revenues the government has, that Treasury might assume unilateral control over under similar principles," wrote James Galbraith. "For example, why not consider that income taxes of government employees are just a return of income previously paid to civil servants? Then Treasury would not need to consult Congress on the use of that money either."

The Treasury did not immediately respond to inquiries from the Huffington Post on Friday morning.

Get HuffPost Politics On Facebook and Twitter!

Comments

[Okieborn]

How about the treasury Dept. investigating the justice dept. ?????
This baby boomer is very disappointed in both departments !!!
The American citizenry is once again on the bottom of the food chain !!!!

[finishcurve]

60 of the 2000 photos Obama doesn't want released:

http://www.smh.com.au/ftimages/2006/02/15/1139890768716.html

[naschkatze]

I could only call up 15, but what's important is where these photos were shot and identification of the perpetrators. If it is not the same place and the same people, you've got a wider story here with orders coming from somewhere above. It would prove that it wasn't just a few rotten apples.

[finishcurve]

Agreed.
I saw quite a few more from the australia soucre a couple years ago, but thought our good leaders would do their part and address it. Oh well, we shall "endevour to persevere" like the Indian in Josey Wales, said.

[naschkatze]

People vote their pocketbooks, and I'm sure going after the financial crooks is going to play well with them, more so than going after war crimes. But we the minority must keep up the pressure. Too effing bad this representative is tired of hearing about torture.

[TheFobster]

Department of Jokes

[time4change2009]

The more we learn about the corruption that has existed for the past 8 years the more we have to wonder about Building 7

[Hopeington]

I wish more people would wonder about Building 7.

[naschkatze]

I'd bet that more than 99% couldn't tell you what Building 7 is, or was.

[taricaziz]

The DOJ is still full of Bush appointees. And I'm afraid it will remain so.

[thecanadian]

Wish the DOJ Holder would hire about 100 new people and investigate none stop - get it over with. Also the FBI. Also get rid of the "moles" planted by Bush/Cheney

[SteveDenver]

Holder is tired of hearing about torture and wants to change the subject?
PRESIDENT OBAMA: This is not perseverance that deserves respect. I hope Holder changes his mind about being bored with torture. The world is watching and it would be a shame to see the headway you've made toward restoring honor abroad and at home by letting this attitude continue.

[Fenestrate]

I must be reading the article wrong. It says, "...Rep. Brad Sherman said he'd heard enough about torture...­" not Holder.

[edwcorey]

"To the extent we in the Justice Department see...a legal deficiency that another department has, we would certainly share that view with them," Holder said. "Obviously to the extent we saw crimes occurring in other departments we would investigate them."

That's right, Obama's DOJ only prosecutes crimes they see occurring in the present. If they've already occurred, they don't look into them, because they're "looking forward." Hopefully, what Satchel Paige was true: "Don't look back. Something might be gaining on you." And when it does, I hope Obama, too, will be held accountable for allowing the torture-garchs to live in opulent peace.

[Durango]

Anyone out there who is just graduating from college and can't find a job, get your butt into lawschool.

The Bush Administration is going to provide plenty of employment opportunities for young lawyers for years to come.

The scandals have not even begun to unfold.

[lightningbolt]

FINALLY! They need to start seriously investigating the greatest heist in world history.

[Coinyer101]

let the torturers go while you chase down thieves? not very good at prioritizing.

[Fotios]

Get them all. If Democrats crack down on law breakers in both parties, the Republican's will never be able to hold the moral high ground and the Country will be better off for it.

[Bronxdude]

Mr. Holder needs to look at the illegal drug tier system used by insurance companies (UnitedHealthcare) to deny pharmacy benefits and dictate medical treatment.

[Durango]

He should look into why the price of gasoline rose 15% in the past week.

[edwcorey]

He should look into why, when gasoline prices cratered, the government didn't buy it up for the strategic reserves.

[Lilith33]

Have we just become the worlds largest ATM for international banks?

[Artos]

It's very amusing to watch the Republicans constantly attacking things to do with the Stimulus Plans whether they were initiated by then President Bush or now Obama. Especially amusing to see them attacking someone like Geithner who originally worked on Wall Street or for Wall Street firms. Geithner when he was with the Corporations was one of the Republicans love interests. Republicans have always been about what is good for the Corporations and never met a quick buck they didn't like. All of a sudden they want to act like Populists and harangue guys they used to ally themselves with, such as Geithner. Paulson was also doing his best to hand out taxpayers money as though it were candy and you didn't see Republicans asking for more accountability then. They didn't even bother fighting hard to insure that the rules were more stringent. But that was then and this is now. They make with this pretense and make their demands as though they actually care about Americans and where our money goes. What changed, the fact that now they are the low boys on the totem pole is my guess.

[Republicrats]

The corp cash goes to who ever is in power dem or repub, makes no difference, just cycles....

[VJ2008]

I would like to see Paulson's actions throughout his tenure investigated. Also, investigate and get control over the FED. It is not right to have them be so powerful that they answer to NO ONE.