Posted on Friday, October 29, 2010
The U.S. Treasury concealed $40 billion in likely taxpayer losses on the bailout of American International Group (AIG.N), the New York Times said, citing a report by Neil Barofsky, the special inspector general for the Troubled Asset Relief Program.
"In our view, this is a significant failure in their transparency," Barofsky said in an interview with the New York Times.
Early this month, the Treasury changed its usual valuation methods and issued a report saying that U.S. taxpayers would ultimately lose just $5 billion on the AIG investment, the paper said.
The Treasury had previously maintained a conservative estimate that it would lose $45 billion on the bailout of AIG.
However, on Monday, a Treasury official disputed Barofsky's conclusions, saying the department appropriately used different methods for different purposes, the Times said.
The official told the newspaper that the smaller loss was a projection of future events and the larger one was the result of an audit, which includes only realized gains and losses.
The Treasury will include more information about the AIG investment when it issues its own audited financial statement in November, which may likely report taxpayer losses of more than $5 billion, according to the paper.
The Treasury department and the office of the Special Inspector General for TARP could not immediately be reached for comment by Reuters outside regular U.S. business hours.
First Posted: 10-26-10 07:50 AM | Updated: 10-26-10 09:14 AM