Citigroup Inc.’s $301 billion of federal asset guarantees, extended by the U.S. last year to help save the bank from collapse, will be audited to calculate losses and determine whether taxpayers got a fair deal.
Neil Barofsky, inspector general of the U.S. Treasury Department’s $700 billion Troubled Asset Relief Program, agreed in an Aug. 3 letter to audit the program after a request by U.S. Representative Alan Grayson. Barofsky will examine why the guarantees were given, how they were structured and whether the bank’s risk controls are adequate to prevent government losses.
Isn't this some welcome news? Citigroup is one of the most underwater TARP recipients. They have received $45 Billion in TARP funds, and this letter is discussing another additional deal, where with almost no conditions, the Federal Reserve, FDIC and Treasury guaranteed about $306 Billion in Citigroup assets.
I would suggest reading Congressman Grayson's letter and then Special Inspector Barofsky's response. Both letters go into some detail on what the audit would entail as well as significant discrepancies in examining balance sheets after the fact.