Timothy Geithner Peppered TARP Inspector General Barofsky With F-Bombs: Book

Geithner Loses It On TARP Inspector General

"I never would have imagined that one day one of the most powerful government officials in the world would be dropping f-bombs on me."

That's Neil Barofsky's response to being on the receiving end of an epic tantrum by Treasury Secretary Timothy Geithner in the fall of 2009, after Barofsky dared to suggest that Geithner had perhaps not been the most transparent Treasury secretary in the entire history of the country.

Warning: Sailor talk ahoy!

"Neil, I have been the most fucking transparent secretary of the Treasury in this country's entire fucking history!" Geithner erupted, in an episode that had Barofsky wondering if Geithner was going to "throttle" him. At the time, Barofsky was the special inspector general in charge of oversight of the Troubled Asset Relief Program.

It's one of the juicier episodes in Barofsky's new book, "Bailout: An Inside Account of How Washington Abandoned Main Street While Rescuing Wall Street." The book recounts Barofsky's front-row view of how the Bush and Obama administrations handled the bailouts of banks, auto makers and homeowners after the financial crisis. Few players come off looking great in the book, but Geithner and his Treasury Department are cast in a particularly bad light.

Congress created Barofsky's position of special inspector general to keep tabs on how TARP money would be spent. Though a Democrat who donated to President Obama's 2008 presidential campaign, Barofsky was appointed by President George W. Bush and had a cordial relationship with then-Treasury Secretary Hank Paulson. Barofsky hoped for even better things from the Obama administration.

Instead, Geithner's treatment of Barofsky ranged from disdain to thundering rage.

In the thundering-rage episode, Barofsky met with Geithner in the fall of 2009 to express his concern that the Treasury Department had made TARP unpopular by not being fully forthcoming about how TARP was being used, including not forcing banks disclose how they were spending TARP funds.

"I said that I thought our capacity as a nation to deal with what could be a continuing financial crisis was being undermined by a loss of faith in government," Barofsky writes. "Then I said that the current loss of government credibility could be traced to Treasury's mishandling of TARP."

"Geithner got dramatic," Barofsky writes: "'Neil, you think I don't hear those criticisms? I hear them. And each one, they cut me,' he said, pausing and then making an emphatic cutting motion with one hand as he said 'like a knife.'"

After a Geithner subordinate in the room, Herb Allison, expresses personal offense at Barofsky's suggestion that Geithner has not been fully transparent, Barofsky responds:

"I am not suggesting that the secretary has failed in transparency, I am stating it. Mr. Secretary, you've failed to be sufficiently transparent, and that is one of the reasons why people are so angry. But you can still fix it."

And that's when the ticking time bomb that was Geithner erupted, says Barofsky:

"'No one has ever made the banks disclose the type of shit that I made them disclose after the stress tests. No one! And now you're saying that I haven't been fucking transparent?'"

Barofsky writes that he'd heard about Geithner's propensity for potty talk, but was still taken aback.

Barofsky writes that he responded to the meltdown with some mollifying words, but without backing down: "'Mr. Secretary, you've done some good things, to be sure,' I responded, and after a pause, I said slowly, 'but you could do so much more.'"

At that point in the meeting, Barofsky says, "Geithner looked as if he was going to get out of his chair and throttle me."

Cooler heads prevailed, and the meeting went on, but Geithner never really came fully off the boil, Barofsky writes:

"As we parried back and forth, Geithner repeatedly reached a pitch of anger, regaling me with detailed expletive-filled explanations that established my apparent idiocy. He would then calm himself down and give me a forced, almost demonic smile."

The meeting ended on a relatively cordial note, but that did not change Barofsky's assessment of the meeting: "It was the weirdest meeting of my life."

After the meeting was over, Barofsky and his deputy, Kevin Puvalowski, had a big laugh about it:

"'In all honesty, I think he was about to come out of his chair and beat the living shit out of you,' Kevin said. ... 'That was fantastic.'"

The Treasury Department was not immediately available for comment about the episode, or about the more-damning allegations of the book: that Geithner's Treasury Department repeatedly tried to undermine Barofsky's authority, ignoring his warnings about the risk of fraud in TARP programs and generally carrying water for the banking industry.

Update: Treasury spokesman Matt Anderson said, "We haven't seen the book, but we wish Mr. Barofsky well."

The Huffington Post is reading through the book and will file more posts about it shortly.

Check out some of Geithner's most memorable quotes:

Before You Go

Popular in the Community

Close

What's Hot