Obama’s TARP Regulator: “Offered the Bullet or the Bribe, the Gold or the Lead” (+video)

In an extraordinary interview with Bill Moyers, TARP regulator and former federal prosecutor Neil Barofsky made some startling accusations. He not only accused the Obama Administration of attempting to bribe him into silence, but he also stated that he was threatened with harm if he didn’t cooperate.

The heat was on Mr. Barofsky because of his “relentless” criticism of Treasury Secretary Tim Geithner and other officials. As the top TARP regulator, he attempted to keep the program independent, a struggle that earned him powerful enemies. He is a lifelong Democrat and was an Obama donor in 2008.

His criticism of the Obama Administration has intensified since his resignation last year. During his interview with Moyers, he agreed that the words “incestuous orgy” were not too strong to describe the relationship between Obama Administration officials and the Wall Street figures they were regulating:


BILL MOYERS: I thought, at the time, this was an incestuous orgy going on there, between inside players at Washington and inside players at Wall Street. Is that too strong?

NEIL BAROFSKY: It’s probably not too strong. It’s the fact that their ideology matches up. And look, one of the reasons why their ideology matches up is they all come from the same small handful of institutions. And the people I was dealing with on a daily basis came from the same financial institutions that helped cause the financial crisis and were the most generous recipients of bailouts, Goldman Sachs, Bear Sterns, which, of course, had been adopted by J.P. Morgan Chase. Goldman Sachs, Goldman Sachs, it seemed like every time I turned around, I bumped into someone from Goldman Sachs.

Mr. Barofsky also claimed that he was told to “keep [his] tone down . . . point blank by [the] Assistant Secretary of the Treasury.” He said the conversation continued:

And he said to me, he said, “Neil, you’re a smart guy. You’re a young guy. You’re a talented guy. You got your whole future in front of you. You’ve got a young family that’s starting out. But you’re doing yourself real harm. And the reason why you’re doing yourself real harm is the harsh tone that I had towards the government as well as to Wall Street, based on what I was seeing down in Washington.” And he told me that if I wanted to get a job out on the Street afterwards, it was going to really be hard for me.

Mr. Barofsky responded that

I wasn’t really interested in that. And he said, “Well, maybe a judgeship. Maybe an appointment from the Obama administration for a federal judgeship.” And I said, “Well, again, that would be great. But I don’t really think that’s going to happen with my criticisms.” And he said it didn’t have to be that way. “If all you do is soften your tone, be a little bit more upbeat, all this stuff can happen for you.”

And that’s what I meant by playing ball. I was essentially told, play ball, soften your tone, and all of these good things can happen to you. But if you stay harsh that was going to cause me real harm in those words.

You’ve got to give Bill Moyers credit for where he headed next:

BILL MOYERS: What happens to a political society, to a democracy, when we stifle or bribe or shoot the sheriff?

NEIL BAROFSKY: When I had my incident with the assistant secretary that my deputy, who had come down from– who’s another former federal prosecutor, who did narcotics work, said to me, Kevin Puvalowski. And he said to me, “Neil, you were just offered the bullet or the bribe, the gold or the lead.”

And what he was referring to was a society just like that, which was Colombia, back in the day when Pablo Escobar and the drug kingpins really controlled society. And what he was referring to is that basically to corrupt society Escobar would go to a magistrate or a police officer, police chief, a politician, and say, “You have two choices. You can either take this giant pile of money and do my bidding. Or you can get the lead, a bullet in your head.”

The transcript of the exchange follows. Here’s the video of the interview:

Transcript:

BILL MOYERS: At a conference a week or so ago, here in New York, you said playing ball for Wall Street has become a normal way of life, despite the panic of 2008. What does it mean, “playing ball for Wall Street”?

NEIL BAROFSKY: Well, what I saw when I was in Washington was this real pressure on myself, on other regulators to essentially keep their tone down. And I was told point blank by Assistant Secretary of the Treasury that, this is about in 2010.

And he said to me, he said, “Neil, you’re a smart guy. You’re a young guy. You’re a talented guy. You got your whole future in front of you. You’ve got a young family that’s starting out. But you’re doing yourself real harm.” And the reason why you’re doing yourself real harm is the harsh tone that I had towards the government as well as to Wall Street, based on what I was seeing down in Washington. And he told me that if I wanted to get a job out on the Street afterwards, it was going to really be hard for me.

BILL MOYERS: You mean on Wall Street?

NEIL BAROFSKY: Yes. And I explained to him that I wasn’t really interested in that. And he said, “Well, maybe a judgeship. Maybe an appointment from the Obama administration for a federal judgeship.” And I said, “Well, again, that would be great. But I don’t really think that’s going to happen with my criticisms.” And he said it didn’t have to be that way. “If all you do is soften your tone, be a little bit more upbeat, all this stuff can happen for you.”

And that’s what I meant by playing ball. I was essentially told, play ball, soften your tone, and all of these good things can happen to you. But if you stay harsh that was going to cause me real harm in those words.

BILL MOYERS: What made you able to say no to the temptation?

NEIL BAROFSKY: Well, I think part of it is the only job I ever wanted was to be a federal prosecutor.

BILL MOYERS: Send bad guys to jail?

NEIL BAROFSKY: It doesn’t get much better than that. Really interesting, complicated work, and wear the white hat. So I didn’t have those incentives that I think that were presented. And I think, look, you know, being trained in the U.S. Attorney’s Office for the Southern District of New York, I was trained to be a government employee and to take my oath of office very seriously.

But I wasn’t really interested in their reindeer games. And I felt a real obligation and sense of duty to fulfill the oath that I took in Secretary Paulson’s office on December 15th, 2008 to do the job that I was sent down there to do. But I wasn’t really tempted with a big job on Wall Street. And frankly, if it meant getting a judgeship, compromising the job that I needed to do and was supposed to do, it just wasn’t interesting to me.

But look, let me be very clear. I also have the fallback of I was a trial lawyer. I prosecuted a lot of big cases. And I knew that whatever happened, I could always go back and get a good job in New York, working at a law firm or doing legal work. So it gave me a degree of financial freedom even though I basically spent most of my career as a government employee and I didn’t have money. I didn’t necessarily need to please anyone to be able to go back and still be able to feed my family.

BILL MOYERS: What happens to a political society, to a democracy, when we stifle or bribe or shoot the sheriff?

NEIL BAROFSKY: When I had my incident with the assistant secretary that my deputy, who had come down from– who’s another former federal prosecutor, who did narcotics work, said to me, Kevin Puvalowski. And he said to me, “Neil, you were just offered the bullet or the bribe, the gold or the lead.”

And what he was referring to was a society just like that, which was Colombia, back in the day when Pablo Escobar and the drug kingpins really controlled society. And what he was referring to is that basically to corrupt society Escobar would go to a magistrate or a police officer, police chief, a politician, and say, “You have two choices. You can either take this giant pile of money and do my bidding. Or you can get the lead, a bullet in your head.”

And Kevin was joking that I just received the Washington white collar equivalent of the gold or the lead. And it was funny, at the time, but that’s kind of what happens in a society where the rewards and incentives are, again, nobody’s getting shot in the head thank goodness. But it’s a breakdown of the system.

And in some ways, it creates this false illusion that there are people out there looking out for the interest of taxpayers, the checks and balances that are built into the system are operational, when in fact they’re not. And what you’re going to see and what we are seeing is it’ll be a breakdown of those governmental institutions. And you’ll see governments that continue to have policies that feed the interests of — and I don’t want to get clichéd, but the one percent or the .1 percent — to the detriment of everyone else.

  • Winghunter

    One big problem with the Democrats story – It wasn’t the banks idea to hand out loans to people everyone knew couldn’t afford them. (However, they went along with it.)

    Subprime Disaster: Clinton Confesses (brags) to extorting loans from
    lenders http://bit.ly/po3wDZ

    The True Origins of Financial Crisis by Peter Wallison http://bit.ly/u58b

    Reid’s Sudden Regret (‘Sorry’ he got caught stacking Financial Crisis
    Committee with liars) http://bit.ly/oRQ3Sl

    • sandraleesmith46

      The whole “crisis” was DELIBERATELY CREATED, with the intention of breaking the American economy; nothing more or less than that; as the people behind the doing are ALL GLOBALISTS who want the “one world order”!

  • GardenGnomeLF

    What the Democrat Party is doing is nothing new. There are many corrupt societies in the world’s history.

    It never happened here though. This is how societies fall.

    Fear and Hate. Obama 2012.

  • bouboulina

    The Communist invasion of the US ratcheted up to near-lethal levels with the influx into New York of the 1st wave of Russian Mafiya (that’s how they spell it). They became billionaires with their gas tax & many other scams & used their money not only for buying influence & coercing the unwilling, but also sent their red diaper brats to the best schools so as to get them onto Wall Street & other strategic positions in the US economy & government. And that’s how Wall Street became the disaster that brought us the economic crisis we’re now living in. But the Russian invasion didn’t end there. 2 more invasions occurred in intervening years, 1 during the Clinton regime when former Soviet intelligence service thugs (post-1989 displaced KGB & GRU operatives) turned their deadly talents & knowledge into criminal activities at every level, everywhere in the US, & even across the globe. The latest invasion is even worse thanks to the current outlaw regime–we even had Russian airborne troops participating in the August-September NORAD defense exercises–NORAD was devised as a joint US-Canada defense shield against–yep!–Soviet attack! Thanks to a totally corrupted US press & other compromised institutions, most of the American public has remained oblivious to the dire straits that this country & all of us have been in for quite some time now.

  • Business as usual for Obama and his administration, THEY ARE AS CORRUPT AS THEY CAN BE, AMERICANS MUST COME TOGETHER ON ELECTION DAY AND PUT A STOP TO OBAMA AND HIS ADMINISTRATION. TALK TO EVERYONE WHO WILL LISTEN AND LET THEM KNOW ABOUT OBAMA BEFORE THE ELECTION.

  • Hank

    Where there is no law, there is chaos. If we reelect these criminals, we will see the truth of that maxim.

    • reggiec

      If the people fear the government, there is tyranny. If the government fears the people there is freedom.

  • reggiec

    The origin of this type of threat was “Plata o plomo” : silver or lead.

  • Doris

    Bill Moyers is actually part of the problem with achieving an honest government in this country. The leftist press picks and chooses its stories and puts their desired spin on them. I am amazed to read this story! Things must really be bad.