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GAO-12-984R 1 (2012-09-18)

handle is hein.gao/gaobacgni0001 and id is 1 raw text is: k GAO Accountbility *Integrity * Reliability United States Government Accountability Office Washington, DC 20548 September 18, 2012 Congressional Addressees Subject: Treasury Continues to Implement Its Oversight System for Addressing TARP Conflicts of Interest The Emergency Economic Stabilization Act of 2008 (EESA) initially authorized $700 billion to assist financial institutions and markets, businesses, homeowners, and consumers through the Troubled Asset Relief Program (TARP).1 The $700 billion ceiling was never reached, and in July 2010 the Dodd-Frank Wall Street Reform and Consumer Protection Act reduced the amount to $475 billion.2 The program was intended to address the greatest threat the financial markets and economy had faced since the Great Depression. The Department of the Treasury (Treasury) established the Office of Financial Stability (OFS) to carry out TARP activities, which included injecting capital into key financial institutions, providing assistance to the automobile industry, and offering incentives to lenders for modifying residential mortgages, among other activities. Since the inception of TARP in October 2008, Treasury has continued to rely on private sector sources to support TARP administration and operations. Through June 2012, Treasury has obligated over $900 million on contracts and financial agency agreements with private sector entities. 3 Treasury's reliance on private sector entities to implement TARP underscores the importance of addressing and managing conflicts of interest that may arise with entities seeking or performing work under TARP.4 A key focus for the program is identifying possible conflicts of interest (personal and organizational) involving private sector entities and mitigating those conflicts. As required by EESA, we have provided oversight of TARP activities since they began in 2008.s This report assesses the extent to which Treasury has (1) established policies and processes regarding conflicts of interest, and (2) implemented its policies and processes for addressing potential conflicts. To address the first objective, we analyzed TARP conflicts of 1EESA, Pub. L. No. 110-343, 122 Stat. 3765 (codified at 12 U.S.C. §§ 5201-5261). 2Pub. L. No. 111-203, § 1302(1)(A) (2010). 3EESA authorizes Treasury to use financial institutions as financial agents of the federal government to perform duties needed to carry out TARP. 4Employees of Treasury's contractors and financial agents are not subject to conflict of interest laws and regulations that govern the conduct of government employees. The Federal Acquisition Regulation requires contractors to promptly disclose credible evidence of fraud and conflicts of interest to the appropriate inspector ? eneral and contracting officer. 73 Fed. Reg. 67064 (Nov. 12, 2008) (codified at 48 C.F.R. § 52.203-13(b)(3)). We have issued a TARP report at least every 60 days as required by EESA in Section 116 (codified at 12 U.S.C. § 5226). GAO-12-984R

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