TARP watchdog to resign on March 30

by Peter Schroeder - 02/14/11 4:45 PM ET

The head of the watchdog overseeing the federal government’s bailout programs will resign on March 30.

In a letter to President Obama sent Monday, Neil Barofsky, the Treasury Department’s special inspector general for the Troubled Asset Relief Program (SIGTARP), credited his office’s oversight with helping the program beat almost all expectations in terms of its cost to the government.

“Thanks in no small part to the dedication of the talented professionals at SIGTARP, TARP stands in a far better and more transparent place today than anyone could have reasonably hoped in December 2008,” he wrote. “The anticipated financial costs, while still significant, have fallen dramatically from early projections.”

The TARP, repeatedly labeled a $700 billion boondoggle, is now expected to cost just $25 billion, according to the Congressional Budget Office.

In 2009, Barofsky estimated the total cost to the federal government for its financial rescue efforts could exceed $23 trillion, if the dozens of programs created to combat the financial crisis and recession reached their maximum capacity.

Barofsky said it had been “an honor and a privilege to serve,” but that the time was right to resign and pursue other opportunities.

After learning of his planned exit, House Oversight Committee Chairman Darrell Issa (R-Calif.) praised Barofsky for his “extraordinary commitment to public service.”

“The passage of TARP signaled a pivotal moment at a time of great uncertainty and no one has been more dedicated to protecting the American people’s tax-dollars from waste, fraud and abuse than Neil Barofsky,” he said.

Barofsky has served as the sole special inspector general since the position was created at the end of 2008, alongside TARP. As part of his responsibilities, he delivered quarterly reports to Congress about the successes and failings of the various programs under TARP.

Nominated in November 2008 by then-President George W. Bush, with the backing of Obama’s presidential transition team, Barofsky was unanimously confirmed by the Senate in December of that year.

In his letter, Barofsky details the achievements of SIGTARP, which grew from a staff of two to “perhaps the finest collection of white-collar criminal investigators ever assembled.”

SIGTARP’s investigations have led to 14 convictions for fraud, more than $550 million in prevented fraud losses, and more than $150 million recovered. The office has more than 140 investigations still ongoing, meaning it is “poised to broaden its impact even further and to bring scores of additional defendants to justice for their attempts to take criminal advantages of the nation’s financial crisis,” he wrote.

Deputy Special Inspector General Christy Romero will continue SIGTARP’s work in Barofsky’s absence, according to his letter.

This post updated at 1:01 pm, 1:35 pm.