When President Obama was campaigning back in 2008, one of his most solemn promises was to have a more transparent administration than his predecessor, George W. Bush. If the Treasury is any indication, however, then the administration has lost its passion for candidness. Over just the past few days, on three separate occasions the Treasury has been taken to task for its efforts to obscure the facts. Has it broken its promise?
A $40 Billion Loss for AIG?
The first, and perhaps highest profile accusation of concealing truth comes from the persistent pebble in the Treasury's shoe -- Special Inspector General for the Troubled Asset Relief Program Neil Barofsky. Remember that great news from a few weeks ago that AIG might be able to pay back all but $5 billion of its massive bailout? Mary Williams Walsh from the New York Times reports that Barofsky has a different calculation.
He says that the Treasury concealed $40 billion in likely losses for taxpayers from the AIG rescue. That's not exactly peanuts. He further asserts that the Treasury is providing incomplete information, and calls this an "failure in their transparency."
Naturally, Treasury disagrees. Spokesperson Mark Paustenbach responds:
The charge by Mr. Barofsky that our AIG valuation was done for political gain is pure nonsense. After the restructuring, Treasury will own 1.65 billion shares of the company, and those shares have a readily identifiable price on the New York Stock Exchange. Anyone capable of basic multiplication can do the math. We have been upfront from the beginning about our plan to exit taxpayers' investment in AIG in a responsible way.
So this boils down to whose estimate you think is more accurate -- Treasury's or Barofsky's. Perhaps we'll know more in November, when an auditor examines AIG's financial statements.