Tuesday, April 21, 2009

Office of the Special Inspector General on PPIP

From the WSJ:

Addressing one of the Treasury's newest efforts, the watchdog said fund managers that participate in the Treasury's program to address toxic assets, the Public-Private Investment Program, could take advantage of the program at taxpayers' expense.

"The significant Government-financed leverage presents a great incentive for collusion between the buyer and seller of the asset, or the buyer and other buyers, whereby, once again, the taxpayer takes a significant loss while others profit," the office said in its quarterly report to Congress.

The Treasury should impose conflict-of-interest rules on firms participating in the program and disclose information about its beneficiaries, the report said.