[Congressional Record Volume 154, Number 177 (Thursday, November 20, 2008)]
[Senate]
[Pages S10744-S10745]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Ms. SNOWE:
  S. 18. A bill to improve the authority of the Special Inspector 
General charged with overseeing the Troubled Asset Relief Program, and 
for other purposes; to the Committee on Banking, Housing, and Urban 
Affairs.
  Ms. SNOWE. Mr. President, with the size and complexity of the 
Treasury Department's efforts to administer the Troubled Asset Relief 
Program, TARP, which is unprecedented in recent U.S. history, it is 
essential to have a Special Inspector General, IG, who is focused 
exclusively on conducting effective oversight. When Congress passed the 
Emergency Economic Stabilization Act, I was proud to join Senator 
Baucus, as well as 31 of my other colleagues, to insist that the 
legislation direct the Treasury Secretary to appoint a Special IG as 
soon as possible. Notably, we tasked the Special IG with ensuring 
program transparency by collecting data on the Treasury's actions and 
reporting regularly to Congress. One might say that the Special IG is 
the cop on the beat dedicated to protecting taxpayers' interests.
  Many would argue that the Treasury's current authority is almost 
completely unrestrained. There is a saying about what absolute power 
does to people and organizations, namely that absolute power corrupts 
absolutely. We must not allow unrestrained power to corrupt the 
Treasury Department's authority or mission. It is essential that proper 
oversight exists so that the Treasury Department is held accountable 
for how it expends taxpayer dollars.
  A strong IG is even more critical now that the Treasury Department is 
directly injecting capital into banks, as well as potentially aiding 
other entities that provide consumer credit. The oversight requirements 
originally designed by Congress to scrutinize the purchase of toxic 
assets do not accurately or adequately describe the Treasury's equity 
investments and, therefore, do not provide the strong taxpayer 
protections Congress requires.
  With the Treasury Department changing the plan day-by-day, there is 
growing market uncertainty about how best to address the economic 
crisis. The Treasury needs to inspire confidence. It must not follow 
Wall Street's example and play fast and loose on the public's dime. The 
bottom line is we must ensure the government respects the public's 
money more than Wall Street ever did. That will be the Special 
Inspector General's job. It is imperative then that the Special IG be 
adequately equipped with authority and resources to carry out this 
mission.
  On Monday, the Finance Committee held a hearing to consider the 
nomination of Neil Barofsky to be the Special IG for TARP. Mr. Barofsky 
has had a distinguished career as a Federal prosecutor investigating 
white-collar crimes, but regardless of how impressive his resume might 
be, he cannot succeed at his job if his hands are tied with inadequate 
authority and resources. At this hearing, I noted a number of concerns 
that I have with the authority, or lack thereof, given to the Special 
IG, and for this reason, I rise today, to offer legislation, the 
Troubled Asset Relief Program Inspector General Improvement Act, that 
will give the Special IG the teeth that he needs to provide the 
oversight that taxpayers deserve with their precious tax dollars at 
stake.
  Time is of the essence with the Treasury already having committed 
$290 billion without the Special IG's oversight. We cannot afford any 
further delay in the office of the Special IG becoming operational. 
Accordingly, because the Emergency Economic Stabilization Act (EESA) 
did not specify the timing the Treasury Department must observe to 
transfer $50 million to the Special IG to set up his office, my 
legislation would direct the Treasury Secretary to provide the TARP IG 
with $50 million within three days after he is confirmed by the Senate. 
In addition, because the TARP IG must hire personnel to get up and 
running, my bill includes a proposal to waive applicable civil service 
rules that could delay that process. I am concerned that without this 
change, it may be summer before the TARP IG's office is sufficiently 
staffed to discharge its responsibilities.

  Notably, EESA requires the TARP to address deficiencies that the 
Comptroller General identifies, or to certify to the appropriate 
committees of Congress that no action is necessary, but it places no 
similar requirement on the TARP regarding audit findings by the Special 
IG. My bill would place the same requirements on the TARP to address 
recommendations by the Special IG as are required by the findings of 
the Comptroller General.
  Additionally, now that the Treasury Department has changed course and 
decided to inject capital directly into financial institutions rather 
than purchase toxic and illiquid assets as originally contemplated, 
Congress must be sure that the Special IG has the authority to fully 
investigate any other type of transaction undertaken by TARP. Although 
many contend that the underlying statute provides the Special IG with 
the ability to investigate equity injections, with Treasury Secretary 
Paulson hinting that TARP may be expanded to benefit credit card, 
student loan, and car loan companies, and with the possibility that the 
incoming administration might enlarge the program further still in ways 
that we are not fully able to anticipate, it is imperative that the 
Special IG have the ability to conduct oversight over whatever way 
funds are ultimately expended. My legislation mandates that the Special 
IG can go wherever necessary to protect taxpayers.
  Last but not least, as there is tremendous concern in many quarters 
that financial institutions will use the $250 billion in equity 
injections they have been allocated pursuant to TARP to either purchase 
their weaker competitors or simply pay dividends to shareholders, I 
believe it is absolutely critical that the public understand exactly 
how these funds are being committed. Although I hope the funds will be 
used to promote lending, which is so critical to restoring economic 
growth and job creation, we must be sure that such lending occurs. 
Accordingly, my bill would require the TARP IG to prepare by July 1, 
2009, an analysis for Congress of what exactly banks did with the $250 
billion they have received.
  Finally, Mr. President, I would be remiss not to acknowledge similar 
legislation introduced yesterday by my colleagues Senators McCaskill, 
Grassley, Collins, and Lieberman. Although their legislation would 
speed the hiring process to allow the TARP IG to quickly begin 
operations, as well as allow the IG to investigate any initiative 
created as part of the program, it would not make some of the other 
changes I believe are absolutely vital. All that said, I hope that we 
can work together on a consensus, bipartisan package that can 
expeditiously clear the Senate.
  Mr. Prsident, I ask unanimous consent that the text of the bill be 
printed in the Record.
  There being no objection, the text of the bill was ordered to be 
printed in the Record, as follows:

                                 S. 18

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Troubled Asset Relief 
     Program Inspector General Improvement Act''.

     SEC. 2. FUNDING OF THE OFFICE OF THE SPECIAL INSPECTOR 
                   GENERAL.

       Section 121(g)(1) of the Emergency Economic Stabilization 
     Act of 2008 (division A of Public Law 110-343) is amended by 
     inserting before the period at the end the following: ``,

[[Page S10745]]

     not later than 3 days after the date on which the nomination 
     of the Special Inspector General is first confirmed by the 
     Senate''.

     SEC. 3. OBLIGATION TO RESPOND TO AUDITS.

       Section 121 of the Emergency Economic Stabilization Act of 
     2008 (division A of Public Law 110-343) is amended--
       (1) by redesignating subsections (f), (g), and (h) as 
     subsections (g), (h), and (i), respectively; and
       (2) by inserting after subsection (e) the following:
       ``(f) Corrective Responses to Audit Problems.--The 
     Secretary shall--
       ``(1) take action to address deficiencies identified by the 
     Special Inspector General or other auditor engaged by the 
     TARP; or
       ``(2) certify to appropriate committees of Congress that no 
     action is necessary or appropriate.''.

     SEC. 4. ADDITIONAL OVERSIGHT MECHANISMS.

       Section 121(c)(1) of the Emergency Economic Stabilization 
     Act of 2008 (division A of Public Law 110-343) is amended by 
     striking ``purchase, management'' and all that follows 
     through ``including'' and inserting ``activities of the 
     Secretary in the expenditure or obligation of funds under 
     this title, including''.

     SEC. 5. REPORTING REQUIREMENT.

       Section 121(g) of the Emergency Economic Stabilization Act 
     of 2008 (division A of Public Law 110-343), as so designated 
     by this Act, is amended--
       (1) by redesignating paragraphs (2) and (3) as paragraphs 
     (3) and (4), respectively; and
       (2) by inserting after paragraph (1) the following:
       ``(2) Not later than July 1, 2009, the Special Inspector 
     General shall submit to the Committee on Banking, Housing, 
     and Urban Affairs of the Senate and the Committee on 
     Financial Services of the House of Representatives a report 
     analyzing the use of any funds received by a financial 
     institution under the TARP.''.

     SEC. 6. PERSONNEL AUTHORITIES.

       Section 121(e)(1) of the Emergency Economic Stabilization 
     Act of 2008 (division A of Public Law 110-343) is amended--
       (1) by inserting ``(A)'' after ``(1)''; and
       (2) by adding at the end the following:
       ``(B)(i) Subject to clause (ii), the Special Inspector 
     General may exercise the employment authorities of 
     subsections (b) through (i) of section 3161 of title 5, 
     United States Code (without regard to subsection (a) of that 
     section).
       ``(ii) In exercising the employment authorities under 
     subsection (b) of section 3161 of title 5, United States 
     Code, (as provided under clause (i)) the Special Inspector 
     General may not make any appointment on or after the date 
     occurring 1 year after the date of the first confirmation of 
     a nomination for the Special Inspector General.''.
                                 ______