SIGTARP's Independence Essential to Protect Taxpayers

10/19/2009 05:12 am ET | Updated May 25, 2011

There's an old saying that farmers have about putting the foxes in charge of the henhouse. Americans tend to feel the same way about the oversight of their government. It's bad policy to compromise the checks on the federal government that are possible only through independent oversight, which is why Congress created the Office of Inspectors General (OIG) in 1978. There are now 69 different IGs overseeing everything from the Department of Agriculture to national intelligence and the Library of Congress.

As the federal government has grown in size, so has the number of Inspectors General necessary to keep an eye on the allocation of taxpayer dollars. Yet the more money that Washington spends, the greater risk there is of waste, fraud and abuse. In the midst of an unprecedented spending spree, the federal government has purchased a taxpayer interest in large financial firms, auto manufacturers and multi-national insurance corporations, all of which was made possible by a $700 billion bailout known as the Troubled Asset Relief Program (TARP).

To help oversee this massive new spending to aid failing corporations, Congress created the office of Special Inspector General for the Troubled Asset Relief Program (SIGTARP). A former Assistant U.S. Attorney from New York, Neil Barofsky, was appointed to fill the post and the Senate quickly confirmed him. SIGTARP's mission is to "advance economic stability by promoting the efficiency and effectiveness of TARP management, through transparency, through coordinated oversight, and through robust enforcement against those, whether inside or outside of government, who waste, steal or abuse TARP funds."

Since his confirmation, SIGTARP Barofsky has closely monitored taxpayer investments, including executive compensation compliance and governance structures in financial institutions receiving TARP funds. Mr. Barofsky has produced timely, thorough and accurate reports to Congress about the ongoing efforts to stabilize the nation's financial markets.

SIGTARP Barofsky has highlighted numerous failures of the Treasury Department to provide transparency and prevent the kind of fraud that undermines the American people's faith in their government. In April, however, Treasury requested a formal opinion from the Office of Legal Counsel of the Department of Justice on whether or not SIGTARP is independent of the supervision of the Treasury Secretary and the degree to which Treasury is legally bound to comply with SIGTARP document requests. Barofsky forcefully objected to this attempt to reign in the independence of his oversight efforts. Members of Congress on both sides of the aisle backed him against an attempted power-grab by the administration.

For now, it appears that Treasury has withdrawn from efforts to control SIGTARP, though history informs us that attempts to expand the reach of executive power never fully subside. With one-party rule in Washington, and without the independence of SIGTARP, the taxpaying public would hear only "trust us" from the people in Washington spending their money. Americans have no patience for wasteful government, and they are acutely aware that fewer watchful eyes result in problems that fester and grow.

No matter where Americans fall along the ideological spectrum, everyone has a reason to be concerned when federal officials who wield extraordinary power over the U.S. economy attempt to limit oversight of their own conduct. As government continues to expand at a rapid pace, Congress and the American people will need to remain vigilant and protect the independence of government watchdogs. We must also insist that our government delivers real transparency and shows measurable progress towards fulfilling the promises made by our leaders.