Amidst all the debate over the stimulus package, Tom Daschle’s limos, and when the White House puppies will arrive, it’s worth keeping an eye on TARP, the Troubled Assets Relief Program that was supposed to get us out of this mess in the first place. The TARP’s genesis from three-page memo to $700 billion fund is history but not so Neel Kashkari, the 35-year-old interim Assistant Secretary of the Treasury for Financial Stability that Henry Paulson appointed to run the program. Kashkari continues to run it having been asked to stay on by the Obama team until a replacement is found. Finding a replacement for Kashkari has not been easy just as it’s been difficult to round out all the assistant secretary positions at Treasury because of Geithner’s delay in confirmation. (That was when a tax problem led to delay instead of self immolation.) I hear that diversity issues are holding up some of the appointments as well as trying to find people who are both versed in banking but are untainted by the current mess and, most importantly, are not coming directly from firms that are asking for TARP funds. We’re still reporting on the names of some of the people who may be coming in. I’m told one Wall Street executive turned the job down several times before the administration took no for an answer. Expect a new TARP head next week when Geithner unveils more comprehensive plans for repairing the financial system.
Meanwhile, at a Senate Banking committee hearing today, the program was lambasted by a Congressional watchdog. The GAO has a report saying the program is poorly run and the public has been misled about how the Treasury priced assets. More here. Neil Barofsky, the independent TARP inspector , told the committee that he wants a criminal investigation. “That’s going to be a large focus of my office,” he said.