I have never understood why Tim Geithner did not work a lot harder to make people like Neil Barofsky and Elizabeth Warren happier. And now Neil is serving the dish cold:
Mark Gongloff: Timothy Geithner Peppered TARP Inspector General Barofsky With F-Bombs: "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."… 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….
"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.
I would note that when I talk to Wall Street banker types, they are even angrier at Geithner than Barofsky is...