Americans always knew the Troubled Asset Relief Program (TARP) was going to be expensive. But the program's special inspector general, Neil Barofsky, thinks the U.S. government has bitten off more than it bargained for: on July 20, his office released a report estimating the $700 billion effort to shore up the nation's wobbly banking system could end up costing taxpayers as much as $23.7 trillion, due to estimates for programs offered by the FDIC, federal money for Fannie Mae, Freddie Mac and other institutions on top of $7.4 trillion in TARP and other Treasury aid. A spokesperson for the Treasury Department quickly called the numbers flawed, making this the latest in the back and forth between Barofsky's oversight office which currently has 35 ongoing criminal and civil investigations of suspected accounting, securities and mortgage fraud and the Treasury Department over the handling of TARP disbursements.
Originally from Philadelphia and raised in Miami, Barofsky was the youngest of three children; his father, Stephen, called Barofsky's two older sisters "tough" on their little brother early training for what a former colleague called his "sharp and sometimes withering wit."
Earned two simultaneous bachelor's degrees from the University of Pennsylvania one in economics from its Wharton School of Business. Earned a law degree with highest honors at New York University in 1995.
Barofsky worked as a lawyer in private practice until taking a pay cut and joining the U.S. District Attorney's office (Southern District of New York) in 2000 where he prosecuted some of the world's most notorious drug traffickers, including some 50 ranking members of FARC, the Colombian guerrilla group. Eventually he headed the mortgage-fraud group that investigated everything from retail mortgage fraud to securities fraud.
Reportedly made Phillip Bennett, former chairman of financial-services company Refco, cry during his 2008 trial for fraud. Bennett was sentenced to 16 years in prison for cheating investors out of $2.4 billion.
Tapped as TARP special inspector general by President George W. Bush in November 2008, even though he is reportedly a Democrat.
Barofsky, 39, was married in January of this year. Although he's a Miami native, he is a die-hard Yankees fan who holds season tickets.
"You don't need an entirely corrupt institution to pull one of these schemes off. You only need a few corrupt managers whose compensation may be tied to the performance of these assets in order to effectively pull off a collusion or a kickback scheme."
Upon the announcement that his office had initiated 20 criminal probes into possible securities fraud, tax violations, insider trading and other crimes relating to TARP-funded companies. (Los Angeles Times, April 21, 2009)
"It's not trillions of dollars going out the door without anyone keeping tabs on it."
In an April 2009 interview, noting that his goal as special inspector general was to inform the public that the government bailout programs were not a "black hole." (CNNMoney.com, April 21, 2009)
"TARP has evolved into a program of unprecedented scope, scale and complexity."
In prepared remarks at a hearing before the House Committee on Oversight and Government Reform. He estimated that U.S. taxpayers may eventually have to pay as much as $23.7 trillion for TARP. (Bloomberg.com, July 20, 2009)
"You should congratulate the country. He does his homework and his prosecutions speak for themselves."
Stephen Barofsky, Neil's father, after President Bush appointed Neil as the special inspector general. (New York Daily News, November 15, 2008)
"He can take on the FARC. I'm sure he can handle a few Wall Street bankers while making sure that the taxpayer money is being spent wisely and legally."
Democratic Senator Charles E. Schumer of New York on Barofsky's confirmation. (Politico.com, December 10, 2008)
"Cursed with a pronounced five-o'clock shadow, Barofsky bears a resemblance to Richard Nixon or, as some unkind souls suggest, Mr. Bean. But any resemblance to Nixon is superficial; by reputation at least, Barofsky is as honest as Nixon was dishonest. As for comparisons with Mr. Bean, Barofsky is certainly no fool."
Blogger Tom Cordle on Barofsky's appearance. (The Open Salon blog, April 27, 2009)