Byline: Sean Lengell, THE WASHINGTON TIMES
The auto industry, AIG and other struggling recipients of the government's $700 billion Wall Street bailout will make it extremely unlikely that taxpayers will receive a full return on their investments, says a new report by the Treasury Department's independent watchdog.
About 17 percent of Troubled Asset Relief Program (TARP) loans issued since the program began a year ago have been repaid, according to a 252-page report released Wednesday by TARP's Special Inspector General Neil Barofsky.
But with a handful of major bailout recipients battling for survival, such as General Motors, Chrysler and insurer American International Group (AIG), full recovery is far from certain, says the study, which examines the Treasury's handling of TARP for the third quarter of 2009.
GM and Chrysler, along with their financing arms, collectively received about $80 billion in TARP funds to avoid a disorderly bankruptcy of one or more auto companies.
While both automakers have emerged from bankruptcy, the report casts significant doubt the companies will be able to repay their TARP loans in full.
Treasury so far received about $465 million in dividends and approximately $206 million in interest payments on the bulk of its TARP investment with the automakers - the $77 billion Automotive Industry Financing Program (AIFP), the report says. Chrysler Financial has paid back $1.5 billion in AIFP funds.
AIG, which has received about $180 billion in TARP funds, is slowly returning to financial stability, according to the report. The company posted a profit for the second quarter of this year for the first time since 2007.
But AIG has missed three TARP dividend payments to Treasury as of Sept. 30. If the company misses a fourth payment Nov. …