Early Show transcript:
Professor ELIZABETH WARREN (Chair, TARP Congressional oversight Panel): Good morning.
CHEN: Your panel estimates Treasury overpaid by $78 billion. How could they have overpaid so much?
Prof. WARREN: Well, they're trying to push money into banks and the question the oversight panel was asking is, `are you getting an equivalent amount back?' And so that's what this was about. Now there could be lots of policy reasons that Treasury might decide that it wanted this money to be in the banks. But our question is the one we put to Secretary Paulson, and that is, are you putting it in and getting back assets that are worth equivalent value?' He told us yes; our independent investigation said no.
CHEN: So are you saying he was lying?
Prof. WARREN: Well, I'm telling you he told us yes and our independent investigation said no.
CHEN: Can you--I'm sorry, go ahead.
Prof. WARREN: It didn't happen. I'm sorry. It didn't happen.
CHEN: Can you see any reason why Treasury would pay more for investments than they appear to have been worth at the time?
Prof. WARREN: Well, when--under these circumstances, when Treasury pays more, effectively they're subsidizing the banks. It's like giving a gift to the banks in order to help prop the banks up. And so if Treasury wants to subsidize the banks, that may actually be a good policy, it may not be a good policy. The panel doesn't go there. Our real point is, if we're going to subsidize, then we need to call it subsidization and we need to have that good old-fashioned debate about whether that's the right way to spend our money here. You don't get to call it one thing and sell the American people on it by calling it that thing and actually have it be something very different.
CHEN: Let me ask you this. Do you see any grounds for a criminal prosecution here?
Prof. WARREN: No, this isn't about criminal prosecution at this point. This is about how Treasury is conducting its business. It's about how Secretary Paulson said he--that he thought the right way to spend this money is to inject it into banks. We can talk about whether that's the right way to go, but describing it one way, telling the American people one thing about it and doing something very different.