(image by Bill Black)
Reprinted from New Economic Perspectives
In my first article on Timothy Geithner's book entitled "Stress Test" I exposed the revealing and disgusting nature of his bizarre ad hominem attack on Neil Barofsky, the Special Inspector General for the Troubled Assets Relief Program (SIGTARP) for the great sin of providing his law enforcement officers (LEOs) with side arms and protective vests -- an action any responsible leader of SIGTARP would make a priority. In this second article I discuss very briefly his other two ad hominem attacks on Barofsky and his staff.
Geithner Damns Barofsky for Lack of Expertise
This attack constitutes further proof of our family rule that it is impossible to compete with unintentional self-parody. Geithner complains:
"Barofsky's desire to prevent perfidy was untainted by financial knowledge or experience."
The following passage is taken from Barofsky's (out of date) speaker's bio:
"Prosecutorial Background. Prior to assuming his role as SIGTARP, Neil Barofskywas a federal prosecutor and the assistant United States attorney for the southern district of New York City. In that role he tried more than a dozen criminal cases and conducted myriad arguments. During his time as a prosecutor, he founded a new prosecutorial group devoted to the investigation and prosecution of mortgage-fraud-related crimes and acted as its senior trial counsel.
Barofsky was also a member of the Securities and Commodities Fraud Unit, where he prosecuted white collar crimes, including the accounting fraud case that led to the convictions of the top officers at Refco Inc. For his work on this case, Barofskywas awarded the Attorney General's John Marshall Award and the Executive Office of the United States Attorneys' Director's Award. Finally, he led the multi-jurisdictional international investigation that resulted in the indictment of the top 50 leaders of the Revolutionary Armed Forces of Colombia (FARC) on narcotics charges, a case described by the then attorney general as the largest narcotics indictment filed in U.S. history, as FARC controlled more than half of the world's cocaine production.
Professorship, Educational Background, and More. Currently, Barofsky is an adjunct professor and senior fellow at the Center on the Administration of Criminal Law and the Mitchell Jacobson Leadership Program on Law and Business. He is also the senior contributing editor for Bloomberg TV."
Barofsky is now a partner with Jenner & Block, one of the most preeminent defense firms for elite white-collar crime defendants.
Geithner's claim that Barofsky had no "financial knowledge or experience" takes about five seconds of search time to falsify. SIGTARP's successes under Barofsky's leadership and the quality of SIGTARP's reports also expose Geithner's claims as false. Virtually all the elite bankers convicted after the crisis were convicted due to SIGTARP's investigations -- often over Geithner's obstruction. It is not Barofsky's fault that the Treasury did not push and DOJ did not prosecute the Taylor, Bean mortgage banking executives who sought to defraud TARP for their far greater and more destructive decade of fraudulent mortgage origination and sales. SIGTARP only has jurisdiction over efforts to defraud TARP. The Taylor, Bean prosecutions for the effort to defraud SIGTARP constitute the only prosecution of the controlling officers of a large lender for fraud by the Department of Justice. Read Barofsky's book to see his description of the enormous efforts it took to get DOJ to bring even the TARP-related case that Barofsky's investigators handed over to DOJ on a silver platter.
Geithner's financial expertise was demonstrated for all to see in his role as President of the Federal Reserve Bank of New York where he could not figure out that something the industry called a "liar's loan" that had a publicly reported fraud incidence of 90% should be banned by the Fed under its HOEPA authority and ignored the appraisers' repeated warnings of the epidemic of appraisal fraud led by lenders for five years. In fairness to Geithner, I must concede that he never demonstrated a "desire to prevent perfidy." Of course, that is a testament to his character failure. He made even wealthier the senior officers who became wealthy by leading the most destructive financial frauds in history. His lack of knowledge or care about elite financial frauds demonstrates that he "was untainted by [relevant] financial knowledge or experience." It is revealing that Geithner thinks he's insulted Barofsky by describing him as devoted to attempting to prevent further frauds by the bankers whose frauds drove the crisis.
Geithner's other ad hominem attack on Barofsky
Geithner claims that Barofsky "assumed our motives were self-evidently sinister"." Sadly for Geithner's efforts to reinvent history, SIGTARP's reports are written and available to the public for review. Note that Geithner quotes nothing specific in support of his three ad hominem attacks on Barofsky. Despite his years of preparation for settling scores with the inspector general he so detests, the thousands of pages of SIGTARP reports he could quote, and the many hundreds of pages of testimony Barofsky gave before Congress Geithner cannot find a single phrase demonstrating that SIGTARP treated Treasury's motives as "self-evidently sinister," he cannot find a single example of Barofsky making a statement that demonstrates that he lacked financial knowledge or experience," and, of course, Geithner cannot produce any basis for criticizing Barofsky for providing for the safety of his staff in the same manner as the Secret Service and the FBI do for their law enforcement officers who investigate white-collar crime.
Geithner's got nothing -- so he follows the old legal joke of pounding the table when the facts and the law are both against him. What we can infer from all this is that Barofsky touched a very sensitive nerve and that Geithner is not only thin-skinned but petulant -- and bad at it. We knew that Geithner had nothing when he decided to rely on ad hominem attacks on Barofsky, but Geithner demonstrates that he isn't even competent at slinging dirt at those that dare to do their job and critique the programs he administers.