Monday, December 22, 2008

All Recipient Banks Can't Account for Billions of Bailout Money

In the rush to push through the "emergency" bailout for financials, dim-bulb or crooked Treasury Secretary Henry Paulson forgot to ask how the money was going to be spent. Congress passed the spending without knowing either.

The answers highlight the secrecy surrounding the Troubled Assets Relief Program, which earmarked $700 billion — about the size of the Netherlands' economy — to help rescue the financial industry. The Treasury Department has been using the money to buy stock in U.S. banks, hoping that the sudden inflow of cash will get banks to start lending money.

There has been no accounting of how banks spend that money. Lawmakers summoned bank executives to Capitol Hill last month and implored them to lend the money — not to hoard it or spend it on corporate bonuses, junkets or to buy other banks. But there is no process in place to make sure that's happening and there are no consequences for banks who don't comply.

"It is entirely appropriate for the American people to know how their taxpayer dollars are being spent in private industry," said Elizabeth Warren, the top congressional watchdog overseeing the financial bailout.

But, at least for now, there's no way for taxpayers to find that out.

Pressured by the Bush administration to approve the money quickly, Congress attached nearly no strings on the $700 billion bailout in October. And the Treasury Department, which doles out the money, never asked banks how it would be spent.

"Those are legitimate questions that should have been asked on Day One," said Rep. Scott Garrett, R-N.J., a House Financial Services Committee member who opposed the bailout as it was rushed through Congress. "Where is the money going to go to? How is it going to be spent? When are we going to get a record on it?"

Garrett, the New Jersey congressman, said the nation might never get a clear answer on where hundreds of billions of dollars went.

"A year or two ago, when we talked about spending $100 million for a bridge to nowhere, that was considered a scandal," he said.

You have to think Paulson is dirty. Like a con-artist who implores you to hurry up and buy now or you'll lose the opportunity, he managed to appropriate $350 billion without accounting for it. Unbelievable.

Well we know where $1.6 billion went:

The 116 banks that so far have received taxpayer dollars to boost them through the economic crisis gave their top tier of executives nearly $1.6 billion in salaries, bonuses and other benefits in 2007, an Associated Press analysis found.

That amount, spread among the 600 highest paid bank executives, would cover the bailout money given to 53 of the banks that have shared the $188 billion that Washington has doled out in rescue packages so far.

1 comment:

  1. Thank god they got their bonuses. I was worried! These bankers are very peculiar types... they need way more than 500K/year to be motivated. It takes alot of high-paid talent to fuck shit up as bad as they did. Myself I don't get out of bed unless there's a million dollar Soc Sec check to pick up.
    BTW- Anyone remember season one of the Sopranos when Tony's trying to hang with the Wall Street crowd and they joke about ethics in the boardroom?