CORPORATE CRIME REPORTER
Holland
& Knight’s Christopher Myers on SIGTARP Ramp Up
23 Corporate Crime Reporter 22(11), June 1, 2009
SIGTARP.
Know what it stands for?
SIGTARP is the Special Inspector General for the Toxic Asset Relief Program.
SIGTARP’s office is in the belly of the beast – 1500 Pennsylvania Avenue, Washington, D.C.
His name: Neil Barofsky.
And he’s making waves inside the beltway and beyond.
Next month, the American Bar Association will sponsor a panel discussion titled TARP Compliance and Enforcement –
What the Legal and Financial Sectors Can Expect.
The panel will be chaired by Christopher Myers.
Myers is a partner at Holland & Knight in McLean, Virginia.
“In a report to Congress, SIGTARP put out an estimate that $3 trillion in public and private money is going to flow into various pieces of the TARP that hopefully will result in the recovery of our financial system,” Myers told Corporate Crime Reporter last week. “At the ABA White Collar Conference earlier this year, the SIGTARP spoke of estimates that as much as seven to ten percent of that money will be lost to fraud, waste and abuse.”
Myers was impressed with Barofsky speech to the ABA White Collar Institute earlier this year in San Francisco.
“He is a former Assistant U.S. Attorney from New York,” Myers said. “He’s very experienced in securities fraud and related financial crime investigations. He is now overseeing a staff that is expected to grow to 150 people. In a report to Congress at the end of April, he announced that there were currently pending 20 criminal investigations, plus six audits of various programs.” “Because of the sheer size of the TARP program, and because of public pressure and outrage over the financial system failures, and because of Congressional pressure to do something, there will be a lot of enforcement in this area,” Myers said. “SIGTARP has 20 investigations under way. He has six full audits. And he’s not fully staffed up yet. He’s got a mission.”
What kinds of prosecutions are we likely to see?
“What is being done with the money? The companies that receive money are going to be required to produce reports on what they have done with the money. There will be potential for misstatements – either accidentally or fraudulently – misstating the uses that they have made of the money. That’s one. It’s the idea of transparency. It’s a big priority of the Obama administration. What are companies saying they are doing with the money? And what are they actually doing with the money? Do they have systems in place to track what they have done with the money?”
“The other major issue will be conflicts of interest. What have they done to protect against conflicts – personal or organizational? The companies that are advising the Treasury on how to handle the money, what to do with the money – are those same companies receiving, or purchasing assets from the government as part of these programs?”
“What are they doing to prevent conflicts? That’s another big issue coming down the pike. And the regulations are not issued. But it is likely there are going to be strong conflicts of interest regulations imposed by the Treasury on these programs. Traditional bribes, kickbacks, gratuities, illegal benefits that companies receive as a result of improper payments. That’s going to be another focus.”
What do the regulations look like now?
“The money that went to the banks went with certain strings attached,” Myers said. “And the Treasury has yet to issue regulations governing the use and receipt of those monies. The companies that are participating in the purchase of trouble assets program are agreeing to be governed by regulations that will be promulgated.”
“So, you have companies signing on to a regulatory scheme that is unknown. We have some pretty good ideas about what it is going to require, but the details are not known. These companies have either signed up to abide by them or comply with them, or they are being forced to agree to comply.”
[For a complete transcript of the Interview with Chrisophter Myers, see 23 Corporate Crime Reporter 23(11), June 1, 2009, print edition only.]
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