New TARP revelations: AIG bailout mishandled, shaky banks got loans too


While less than two weeks ago, the Congressional Oversight Panel said that it had found no "significant flaws in Treasury's implementation" of TARP bailout programs, on Tuesday, Special Inspector General Neil Barofsky (pictured) questioned why AIG counterparties were paid 100% of the values of their contracts, costing the U.S. taxpayers $62 billion, most of which may not get repaid. Also on Tuesday, the The Wall Street Journal analyzed enforcement actions filed by federal regulators and found that at least 27 troubled banks got TARP funds even though government officials knew they were in trouble. The Journal estimates this will result in another $5.1 billion in lost taxpayers' money.

These two stories point to $67.1 billion in taxpayers money spent on troubled institutions that may never get paid back. Some consider the AIG payoffs to have been "backdoor bailouts." When you consider who got the AIG payoffs, you too may wonder why the government didn't negotiate discounts. Recipients included Goldman Sachs (GS), Merrill Lynch, Deutsche Bank (DB), UBS (UBS), Barclays (BCS) and Bank of America (BAC).