Special Inspector General for TARP 

Program Summary by Budget Activity 

Dollars in Thousands FY 2019 FY 2020 FY 2021 FY 2020 to FY 2021 

Budget Activity Operating Plan Enacted Request $ Change % Change 

Investigations $19,550 $18,920 $15,050 ($3,870) -20.45% 

Audit $3,450 $3,080 $2,450 ($630) -20.45% 

Subtotal, Organization Title $23,000 $22,000 $17,500 ($4,500) -20.50% 

Unobligated Balances Brought Forward $16,912 $14,642 $14,000 ($642) -4.40% 

Total Program Operating Level $39,912 $36,642 $31,500 ($4,500) -14.00% 

Direct FTE 96 85 80 (5) -5.88% 

Total Full-time Equivalents (FTE) 96 85 80 (5) -5.88% 

Summary 

The FY 2021 Budget proposes $17,500,000, a 20 percent reduction from the FY 2020 level. 

The proposed Budget is intended to fund the Congressionally mandated independent oversight of 

TARP through SIGTARP criminal investigations and audits. TARP spending continues because 

TARP foreclosure prevention programs, the Making Home Affordable (MHA) and the Hardest 

Hit Fund (HHF) programs continue. Banks, mortgage servicers, state agencies, thousands of 

contractors and other recipients have already received over $30 billion via these programs. 

SIGTARP’s investigations and audits stop fraud, waste, and abuse of the $30 billion spent, and 

recover lost dollars for the Government and other victims. The more than $3.5 billion in future 

TARP spending will add to SIGTARP’s existing and planned investigations and audits. 

SIGTARP’s activities and goals of justice, impact, innovation, and stewardship support and 

complement Treasury’s FY 2018 – 2022 Strategic Plan goals: (1) boost U.S. economic growth 

by investigating anti-competitive practices; (2) promote financial stability; (3) enhance national 

security by investigating money laundering; (4) transform government-wide financial 

stewardship; and (5) achieve operational excellence. All of SIGTARP’s work aligns with 

Treasury’s strategic goal to promote financial stability given that Treasury designed all TARP 

programs with the goal of promoting financial stability. Fraud, waste, and abuse erodes that 

goal. All of SIGTARP’s planned work for FY 2021 aligns with Treasury’s Strategic Plan goal 

(4) “Transform Government-wide Financial Stewardship” by winding down sun setting 

programs responsibility and funding the government at the least cost over time. Fraud, waste, 

and abuse are costly for taxpayers. SIGTARP’s efficiency and high return on investment also 

aligns with Treasury’s strategic goal to achieve operational excellence. 

Special Inspector General’s Comments 

Pursuant to section 6(f)(3)(E) of the Inspector General Act of 1978, as amended, as applied 

through the Emergency Economic Stabilization Act of 2008, I have concluded that the President’s 

FY 2021 Budget request of $17.5 million would substantially inhibit the Special Inspector 

General from performing the duties of the office. I independently proposed an appropriation of 

$19 million (an additional $1.5 million) for FY 2021, as the level needed to support SIGTARP’s 

Congressionally mandated mission to conduct oversight of TARP, while also reflecting an 

orderly and responsible step down towards TARP’s sunset of March 2024. I respectfully request 
that Congress consider this level, which is a 14 percent reduction from the FY 2020 enacted 

level; a 17 percent reduction from the FY 2019 enacted level; a 44 percent reduction from the 

FY 2018 enacted level; and a 54 percent reduction from the FY 2017 enacted level. 

The President’s Budget request would substantially inhibit our oversight because it will require a 

larger reduction in staffing and mission support levels than I have determined is necessary to 

fulfill the mission. The President’s Budget request is a 49 percent reduction from the FY 2018 

enacted level even though the same TARP programs are open as in FY 2018 with significant 

activity, spending more than $1 billion each year – spending that should be accompanied by 

SIGTARP’s oversight. 

In FY 2019 alone, TARP programs had significant operations and spent more than $1.7 billion. 

Of this amount, Treasury paid $1.12 billion in TARP dollars to 74 financial institutions in MHA, 

including, for example, $290 million to Ocwen Financial, $155 million to SPS, $132 million to 

Wells Fargo, $101 million to JP Morgan Chase, $59 million to Bank of America, $129 million to 

Nationstar, $19 million to Citigroup, and $5 million to CIT Bank. 

As more TARP dollars are spent in MHA and HHF, SIGTARP’s investigations and audits over 

that spending increases. Every TARP dollar spent is another dollar potentially subject to fraud, 

waste and abuse, increasing the need for investigations and audits. Treasury has already paid 

more than $20 billion in MHA. Additionally, through FY 2024, Treasury is obligated or 

committed to pay $2.8 billion to banks and non-bank mortgage servicers in MHA to modify 

these residential mortgages. For example, Treasury is obligated or committed to pay in the future 

$675 million to Ocwen Financial, $359 million to Wells Fargo, $218 million to JP Morgan 

Chase, $152 million to Bank of America, $338 million to Select Portfolio Servicing, $340 

million to Nationstar, $69 million to CitiMortgage, and $22 million to CIT Bank/One West 

Bank. In the Hardest Hit Fund, 19 state agencies have received more than $9 billion in TARP 

funds from Treasury, and have another nearly $800 million in state agency bank accounts ready 

to be spent through December 2021. 

When left unchecked, fraud, waste, and abuse in these programs can have a devastating impact 

on those the program are intended to help. HAMP continues today with nearly 800,000 people 

in all 50 states receiving mortgage modifications to make their payments affordable and 

sustainable. The billions of TARP dollars that Treasury will pay financial institutions in the 

future are not automatic, but instead require the banks and other servicers to comply with the law 

and rules of the program for those homeowners – decisions and actions that require oversight and 

law enforcement. 

There are 40 HHF programs still open to applicants, plus open programs that continue to spend 

TARP dollars related to existing homeowners, many of which are unemployed or 

underemployed, and other participants. This year, there were more TARP-funded demolitions of 

blighted houses than any other year, and 58 percent of all new first-time homebuyers receiving 

HHF down payment assistance occurred in the last year. Just this past year, more than 29,000 

new borrowers came into the program. State agencies told SIGTARP that they expect an 

additional 8,000 demolitions in the future. After those discussions, Treasury approved an 
additional 450 demolitions in Ohio. These programs have important goals for communities, 

goals that would be hurt by fraud, waste, and abuse. 

SIGTARP has demonstrated that it is a solid investment for taxpayers, as SIGTARP’s work has 

led to cumulative recoveries for the government and other victims of $11 billion – a 31 time 

cumulative return on investment (ROI) from our annual budgets. 

This ranks SIGTARP as having the third highest ROI out of 18 OIGs reviewed by the Brookings 

Institution Center for Effective Public Management in its analysis of how cutting the budget of 

positive-revenue OIGs costs the government money and contributes to the federal deficit.1

 

We appreciate Congress’s strong Congressional support for our budget each year. In FY 2019: 

 $900 million was recovered as a result of SIGTARP’s law enforcement work, 

representing a 39 times annual return on investment from our $23 million budget. 

 SIGTARP investigations resulted in criminal charges against 13 defendants, four arrests, 

criminal convictions of 18 defendants, courts sentencing 28 defendants to prison, federal 

enforcement activity against three corporations/organizations, and 26 referrals to prosecutors. 

 SIGTARP auditors questioned more than $848,000 in costs, including more than $411,000 

that state agencies in HHF spent on travel and conference costs that violated Federal cost 

regulations, some of which also constituted waste. For example: 

 The North Carolina agency spent $130,000 on annual housing counselor conferences 

including paying $2,500 to a guest speaker who lectured on “Motivation by Chocolate.” 

Also, before homeowners received a single dollar from HHF, housing counselors were 

treated to an evening reception featuring a carved beef station staffed by a uniform chef, 

cake bites and strawberry shortcake martinis. 

 After the Ohio agency decided to close the HHF program to new homeowner 

applications, it deviated from past practices to hold housing counselor conferences at 

zoos. 

 Two top Florida officials charged TARP more than a dozen conferences each, often at 

luxury hotels, beaches and other resort destinations, despite the fact that the state agency 

was one of the most underperforming state agencies in HHF, providing assistance to only 

20 percent of applicants, the lowest of any state. 

 Officials from some state agencies attending an annual meeting with Treasury in 

Washington, D.C. charged TARP for luxury hotels, while other state agencies attending 

the same meeting stayed at hotels at or near the GSA rate. Two senior Ohio agency 

officials stayed at the W hotel paying $315-$423 per night, while a junior Ohio official 

on the same trip stayed at a hotel with the rate of $170 per night. 

 SIGTARP has open investigations into financial institutions participating in MHA and 

receiving TARP dollars. SIGTARP has referred some of these investigations to the 

Department of Justice, and SIGTARP continues to work these cases with the U.S. 

Department of Justice (DOJ). 

 SIGTARP continued to obtain convictions and sentencings of defendants who defrauded 

nearly 30,000 homeowners with false promises of entry into HAMP, including some who 

claimed affiliation with the government, and preyed on the elderly, and other vulnerable 

 

1

 Hudak, J. Wallack, G. (2015). Brookings Institution Center for Effective Public Management, Website: 

https://www.brookings.edu/wp-content/uploads/2016/06/CEPMHudakWallackOIG.pdf. 
Americans. Already, 93 of these scammers were sentenced to prison as a result of 

SIGTARP’s investigations. 

 SIGTARP’s investigations resulted in the conviction and prison sentencing of the Detroit city 

official in charge of contracts for HHF’s blight demolition program, the conviction for 

bribery of an official from one of the largest demolition contractors in the HHF program in 

Detroit, and the indictment of a land bank official in the HHF program in Ohio on one count 

of conspiracy to commit bribery and honest services fraud, three counts of honest services 

wire fraud and one count of bribery. 

 SIGTARP’s investigations resulted in DOJ resolving a false claim act action against the sole 

contractor in HHF blight demolition in Fort Wayne, Indiana for filling the demolition sites 

with construction debris rather than clean fill dirt, and falsely billing the HHF program as if it 

had used clean fill dirt. 

 SIGTARP’s investigations have also resulted in criminal charges and arrests this year for 

homeowners defrauding HHF. 

 SIGTARP’s audits have focused on the costly and harmful risks of asbestos and lead 

exposure, illegal dumping, and contaminated dirt. 

 SIGTARP’s recent audit warned Treasury about a lack of fraud controls that led to more than 

$437,000 in payments to California homeowners who lost eligibility but continued receiving 

TARP payments for years. 

 

SIGTARP is grateful for the support of Congress. We will continue to deliver investigative and 

audit results, and a high return on investment. In every year since FY 2016, recoveries from 

SIGTARP’s work have far exceeded our annual appropriations. Investing in SIGTARP is one of 

the most effective and efficient ways to protect the government. The Government will receive 

far more than our budget in recovered dollars lost to fraud, in addition to cost savings. Our work 

ensures that TARP dollars are used as Congress intended, and that the Government does not pay 

more for TARP than is necessary. 
Budget Highlights 

Dollars in Thousands 

 FTE Amount 

FY 2020 Enacted 85 $22,000 

Changes to Base: 

Maintaining Current Levels (MCLs): 0 $510 

Pay Annualization (2020 3.1% average pay raise) 0 $117 

Pay Raise (1.0% average pay raise) 0 $115 

FERS Contribution Increase 0 $141 

Non-Pay 0 $137 

Subtotal Changes to Base 0 $510 

FY 2021 Current Services 85 $22,510 

Program Changes: 

Program Decreases (5) ($5,010) 

Staff Reduction (5) ($344) 

Efficiency Savings 0 ($946) 

Realignment from Annual to No-Year 0 ($3,720) 

FY 2021 President's Budget Request 80 $17,500 

Budget Adjustments 

Budget Increases and Decreases Description 

Maintaining Current Levels (MCLs).............................................+$510,000 / +0 FTE 

Pay Annualization (2020 3.1% average pay raise) +$117,000 / +0 FTE 

Funds are requested for annualization of the January 2020 3.1% average pay-raise. 

Pay Raise (1.0% average pay raise) +$115,000 / +0 FTE 

Funds are requested for a 1.0% average pay-raise for January 2021. 

FERS Contribution Increase +$141,000 / +0 FTE 

Funds are requested for the Federal Employee Retirement System (FERS) contribution rates 

effective FY 2021. 

Non-Pay +$137,000 / +0 FTE 

Funds are requested for non-labor expenses such as travel, contracts, rent, supplies, 

and equipment. 

Program Decreases..................................................................-$5,010,000 / -5 FTE 

Staff Reduction -$344,000 / -5 FTE 

Reduction in SIGTARP staff levels to 80 FTE. 

Efficiency Savings -$946,000/ -0 FTE 

SIGTARP will seek to reduce non-personnel costs. 

Realignment from Annual to No-Year -$3,720,000/ -0 FTE 
SIGTARP will fund a portion of its operations from its no-year account. 

SIGTARP actively reduces costs and its footprint, while creating an appropriately sized, skilled 

and structured workforce. 

 In the last two years, SIGTARP cut its footprint by 47 percent in cost and square footage. In 

FY 2018, SIGTARP eliminated 50 percent of its headquarters annual rent expenses. In 

FY 2019, SIGTARP eliminated 100 percent of its San Francisco annual rent expense. 

 Beginning in FY 2020, SIGTARP is reducing its New York annual rent expense by 43 

percent. 

 SIGTARP reduced fleet-related expenses by 40 percent since FY 2014. 

 In FY 2021, over $3 million of the proposed budget (23 percent) will be spent on goods and 

services from the government, more that 95 percent of which will be paid to Treasury. 

 SIGTARP has eliminated management layers and is structuring the workforce in such a way 

to create maximum flexibility as the agency’s sunset approaches. 

 SIGTARP drives efficiencies through innovative processes and the use of technology, 

including through data mining. 

 SIGTARP coordinates with other law enforcement agencies and Inspectors General, 

leveraging its unique position and expertise by forming law enforcement and other 

partnerships to create operational efficiencies and realize cost savings. 
Legislative Proposals 

PPIP Funds 

The Public-Private Investment Program (PPIP) Improvement and Oversight Act of 2009 

(12 U.S.C. § 5231a) provided $15 million in no-year appropriations to SIGTARP for the purpose 

of providing oversight to PPIP and the Term Asset-Backed Securities Loan Facility. SIGTARP 

does not plan PPIP or TALF activity in FY 2020 and FY 2021. SIGTARP is requesting that 

these PPIP funds be made available to also support SIGTARP’s oversight of ongoing TARP 

programs. This proposed language is identical to that included in the FY 2018 enacted 

appropriation. 

Performance Highlights FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 

Budget Activity Performance Measure Actual Actual Actual Target Target 

Investigations 

Percentage of Cases Accepted for Consideration 

by Civil or Criminal Authorities Resulting in a 

Positive Final Outcome 

81 79 77 60 35 

Investigations 

Percentage of Cases Presented to Civil or 

Criminal Authorities within Eight Months of 

Being Opened 

80 85 75 50 25 

Investigations Percentage of Cases that are Joint Agency/Task 

Force Investigations 75 78 76 70 70 

Audit 

Number of Completed Audit Products Identifying 

Waist, Abuse, Mismanagement, Inefficiencies, or 

Referrals to Investigations Division (units) 

N/A 6 4 2 2 

Description of Performance 

In FY 2019, SIGTARP exceeded all of its targets. As a law enforcement office with 85 percent 

of its resources focused on criminal investigations, SIGTARP strives to bring justice, 

accountability, and deterrence in the fight against TARP-related crimes, including major 

financial crimes and money laundering. This past year SIGTARP continued to support 

prosecutions of defendants that SIGTARP investigated. SIGTARP’s cumulative law 

enforcement record includes 430 defendants charged with crimes, 300 of which courts have 

sentenced to prison. SIGTARP’s investigation also have led to law enforcement actions against 

24 corporations/organizations. SIGTARP achieved justice when, in FY 2019, 4 defendants were 

arrested, 13 defendants were indicted or criminally charged by information, 18 defendants were 

convicted, and courts sentenced to prison 28 defendants. SIGTARP’s rate of conviction for cases 

prosecuted by the Department of Justice is 97 percent, one of the highest in federal law 

enforcement. This is a strong indicator of investigative quality. Other measures recognize that 

as SIGTARP reduces spending and staffing, it must act with efficiency, in its investigative 

timeline, and in leveraging other law enforcement partnerships for resources. 

SIGTARP also stands as the independent watchdog for Americans, ensuring that TARP 

programs operate and spend responsibly. In FY 2019, SIGTARP auditors uncovered that state 

agencies in the Hardest Hit Fund had spent more than $411,000 on travel and conference costs 

that violated federal cost regulations. SIGTARP also uncovered more than $437,000 in HHF 

mortgage assistance to California homeowners who had lost eligibility for the program. In 

another evaluation, SIGTARP made recommendations to mitigate the risk of asbestos and lead 

exposure in the HHF blight program. SIGTARP auditors also made a referral to SIGTARP’s 

Investigations Division.