President George W Bush has nominated a special inspector general for the Troubled Asset Relief Program (TARP) from the mortgage fraud group in the southern disctrict of New York in response to critics of the lack of independent oversight for the implementation of the rescue package.

The nominee, Neil Barofsky, an assistant US attorney, is the chief of the mortgage fraud group in the southern district of New York. Before that he was the lead prosecutor in the district’s securities fraud unit, Dow Jones newswire's Financial News reports.

Eric Thorson, the US Treasury Department’s inspector general, told the Washington Post on Wednesday: 'It’s a mess. I don’t think anyone understands right now how we’re going to do a proper oversight of this thing.'

Barofsky will have to be confirmed by the US Senate to take on the role, which will be to investigate the government’s use of the $700bn approved for the programme and to report on the justification behind the treasury’s purchases of equity or assets.

Further reading:

US in turnaround on $700bn rescue package

Read the Financial News story