Spreading Scandal: The TARP Inspector-General Neil Barofsky

Obama Administration efforts to block the TARP Inspector-General from doing his job date back to at least January 30, when Senator Grassley sent a letter complaining:

It is my understanding that at this time, OMB is requiring SIGTARP to post a proposed letter of inquiry to TARP recipients for 15 days, wait for comments, and then justify to OMB that it has taken into account the public comments in redrafting the inquiry letter. This is unacceptable.

On June 17 Grassley sent a letter with an IG memo attached which is about the refusal of the Secretary of the Treasury to turn over documents to the IG, on the specious grounds that (a) the IG is not in the Treasury, and the documents are covered by attorney-client privilege, and (b) the IG is under the authority of the Secretary of the Treasury, who can shut down any investigating he doesn't like.

Specifically, my office received information that there was a dispute over certain Treasury documents that were being withheld from SIGTARP auditors on a specious claim of attorney-client privilege. It is my further understanding that this disagreement then escalated into broader questions about whether SIGTARP is subject to your direct supervision and direction, which may have been referred outside Treasury for an independent legal opinion.