Watchdog: Taxpayers still owed $132.9B from bailout

Posted: January 27, 2012

WASHINGTON - A government watchdog says that U.S. taxpayers are still owed $132.9 billion that companies haven't repaid from the financial bailout, and that some of it will never be recovered.

The bailout begun at the height of the financial crisis in September 2008 will continue for years, according to a report issued Thursday by Christy Romero, acting special inspector general for the $700 billion bailout. Some bailout programs, such as the effort to help homeowners avoid foreclosure by reducing mortgage payments, will last up to 2017, costing the government an additional $51 billion or so.

The gyrating stock market has slowed the Treasury Department's efforts to sell off its stakes in 458 bailed-out companies, the report said. Those companies include insurer American International Group Inc., General Motors Co., and Ally Financial Inc.

If Treasury plans to sell its stock in those three companies at or above the price where taxpayers would break even on their investment - $28.73 a share for AIG, $53.98 for GM - it may have to wait a long time for the market to rebound to that level, the report said. AIG closed Thursday at $25.14, and GM ended at $24.72. Ally isn't publicly traded.

Getting out of the 458 companies will be challenging for the government as the market remains volatile and banks struggle to keep afloat in the tough economy, the report said.

Congress authorized $700 billion for the bailout of financial companies and automakers, and $413.4 billion was paid out. So far, the government has recovered about $318 billion. The bailout is officially called the Troubled Asset Relief Program, or TARP.

"TARP is not over," Romero said in a statement. She said her office would maintain its commitment to protect taxpayers for the duration of the program.

Treasury spokesman Matt Anderson said the department "has made substantial progress winding down TARP and has already recovered more than 77 percent of the funds disbursed for the program through repayments and other income."

"We'll continue to balance the important goals of exiting our investments as soon as practicable and maximizing value for taxpayers," Anderson said.

The government has withdrawn its investments in four of the companies that received the most aid: Bank of America Corp., Citigroup Inc., Chrysler Group L.L.C., and Chrysler Financial, the automaker's former lending arm.

On Wednesday, Treasury announced it had sold the final batch of securities under its $368 million Small Business Administration loan program under TARP.

In Romero's quarterly report to Congress, she said her office had uncovered and prevented fraud related to TARP. Investigations by her office resulted in criminal charges against 10 people and three convictions in the quarter ended Dec. 31, the report said. Altogether, the investigations have resulted in criminal charges against 61 people.


What They Owe

Companies that owed the most in U.S. bailout funds as of Dec. 31 include:

American International Group Inc., New York, $50 billion.

General Motors Co., Detroit, $25.4 billion.

Ally Financial Inc., former finance arm of GM, Detroit, $11.9 billion.

Regions Financial Corp., Birmingham, Ala., $3.5 billion.

Zions Bancorporation, Salt Lake City, $1.4 billion.

Synovus Financial Corp., Columbus, Ga., $967.9 million.

Popular Inc., Hato Rey, Puerto Rico, $935 million.

First Bancorp, San Juan, Puerto Rico, $400 million.

M&T Bank Corp., Buffalo, N.Y., $381.5 million.

Sterling Financial Corp., Spokane, Wash., $303 million.

Citizens Republic Bancorp Inc., Flint, Mich., $300 million.

First Banks Inc., Clayton, Mo., $295.4 million.

SOURCE: Associated Press; Office of the Special Inspector General for the Troubled Asset Relief Program.

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