Bailout watchdog to step down after 2 years

The government’s independent watchdog for the $700 billion Wall Street bailout program is stepping down after more than two years on the job.

Neil Barofsky, who has received bipartisan praise for overseeing a department that led to the conviction of 14 people for fraud and the recovery of than $150 million in taxpayer money, told President Obama on Monday he will resign as special inspector general for the Troubled Asset Relief Program (SIGTARP) on March 30. He cited a desire to spend more time his wife and young child.

“I am very pleased to report that SIGTARP has had a truly remarkable positive impact for an office of such a small size and recent creation,” wrote Mr. Barofsky in his resignation letter to Mr. Obama. “… I believe that it is the right time for me to step down and pursue other opportunities.”

The special inspector general’s office was created as part of the Bush administration’s $700 billion bailout program, which Congress enacted in the autumn of 2008 as an emergency stopgap to stabilize the nation’s economy in the midst of the worst financial crisis since the 1930s.

Because so much money was doled out so quickly to banks, credit card companies and other financial institutions — with limited oversight and conditions — the potential for fraud was huge. Mr. Barofsky’s office was charged with safeguarding this unprecedented use of taxpayer money.

Mr. Barofsky, who was appointed by Mr. Bush in late 2008, is the only person to hold the position. The office, which employs at least 140 auditors, investigators, attorneys and other professionals, is currently conducting more than 140 investigations and 10 audits.

Mr. Barofsky, 40, earned a reputation as a calm, nonpartisan investigator and won the respect of Capitol Hill lawmakers in both parties.

House Oversight and Government Reform Committee Chairman Darrell Issa, California Republican, said that “no one has been more dedicated to protecting the American people’s tax dollars from waste, fraud and abuse than Neil Barofsky.”

Rep. Elijah E. Cummings, the committee’s top Democrat, said the special inspector general has done “incredible work” and will be missed.

“The TARP program was successful in averting an catastrophic economic collapse and, in part, because of the constant and aggressive work of SIGTARP,” the Maryland lawmaker said.

While many financial institutions have paid back their TARP loans, more than $150 billion in taxpayer funds remain outstanding, with about $60 billion still available to be spent.

Deputy Special Inspector General Christy Romero will serve as interim head of the watchdog office until the president appoints — and the Senate confirms — a successor.

Prior to serving as TARP watchdog, Mr. Barofsky fashioned a successful legal career. As a prosecutor for the U.S. Attorney’s Office for the Southern District of New York, he led an investigation that resulted in the indictment of the top 50 leaders of the Revolutionary Armed Forces of Colombia — better known by its Spanish acronym, FARC — on narcotics charges. The case was described as the largest narcotics indictment filed in U.S. history at the time.