Eyebrows were raised in June when ABC News wrote about an inquiry by the Treasury Department to the Department of Justice as to whether the Special Inspector General for TARP (SIGTARP) was under the thumb of supervised and directed by the Treasury Secretary.

The issue goes back at least until April when SIGARP Neil Barofsky wrote a letter to Treasury's General Counsel Bernard Knight in response to a notification that Knight would be seeking advice from DOJ's Office of Legal Counsel on SIGTARP's position in the Executive Branch and whether Treasury was obliged to turn over certain documents to Barofsky.

The Wall Street Journal is now reporting that Treasury has backed down in seeking a ruling that would make the SIGTARP answerable to the Treasury Secretary.

In a letter Wednesday to members of Congress, Mr. Barofsky said the Treasury had withdrawn an earlier request to the Justice Department seeking a legal opinion on how much independence the Sigtarp office enjoys. Mr. Barofsky had told lawmakers he feared that being subject to the Treasury secretary's supervision would be "a threat to our independence."

"We view such withdrawal as Treasury's acknowledgment that Sigtarp is an independent entity within Treasury, and that my office and I are not subject to the supervision of the secretary," Mr. Barofsky said in his letter to a group of lawmakers, including Sen. Charles Grassley (R., Iowa) and Rep. Darrell Issa (R., Calif.), who have pushed for his independence. "We applaud Treasury's decision to bring to a close this needless distraction," Mr. Barofsky said.

Score one for oversight!

But seriously, could TARP's top cop conduct meaningful oversight -- or even be taken seriously -- knowing that his paycheck's were being signed by Treasury Secretary Geithner? And I'm more than a little concerned that Geithner thought that sort of control over Barofsky was warranted.