Further hanky panky:TARP overpayments total $78 billion
The Treasury Department paid “substantially above” market value for the financial assets purchased through the Troubled Asset Relief Program, according to the TARP oversight panel appointed by Congress.
Elizabeth Warren told the Senate Banking Committee Thursday that Treasury paid $254 billion in 2008 to financial institutions through the TARP program but received only $176 billion worth of stocks and warrants. This estimate was extrapolated from an analysis of 10 transactions, Warren said.
Congress created the TARP program to thaw frozen credit markets and shore up the U.S. banking system.
The Treasury Department has failed to explain the reasons for the overpayments, even though some of its announced policy objectives could have led it to pay more than the stocks and warrants were worth at the time, Warren said.
“Because Treasury has failed to delineate a clear reason for such an overpayment, however, the panel is unable to determine whether these objectives have been met or whether they justified the large subsidy that was created,” Warren said.http://www.bizjournals.com/pacific/stories/2009/02/02/daily55.html