A House subcommittee looking into the federal bailout of AIG heard testimony from a number of high ranking officials on January 27, including the current Treasury Secretary and his predecessor. But much of the media attention was garnered by Neil Barofsky '95, the special inspector general of the Troubled Asset Relief Program. That’s because Barofsky, a former federal prosecutor in New York, has tenaciously investigated whether the Treasury Department and Federal Reserve mismanaged the massive taxpayer rescue of financial services firms at the end of 2008. The New York Times noted that “he is setting off fireworks on Capitol Hill as he quietly and methodically pieces together the most complete historical record yet of the financial bailout.” 

Previously, Barofsky has accused former Treasury secretary Henry Paulson Jr. of misleading the public about the stability of the country’s major banks during the financial crisis. And at the January 27 hearing, he was critical of how the Fed negotiated with AIG’s counterparties. He also said he was investigating whether Fed officials failed to disclose key documents during his office’s audit of the bailout program. “The American people deserve better,” he said in the written version of his testimony.

Posted January 27, 2010