Gone into financial execs’ pockets, every one.
When will we ever learn?
—With apologies to Peter Seeger and Tao Rodriquez-Seeger
Thank goodness today is President’s Day, a federal holiday. That means neither the government nor financial institutions are doing what they usually do.
At the end of January, the Congressional Oversight Panel released it’s report on TARP, the Troubled Asset Relief Program. Chairman Elizabeth Warren has been vocal about the raw deal taxpayers have gotten so far. She says Treasury only got 66 cents on the dollar, giving banks and Wall Street $254 billion. Trouble is, Treasury only got $176 billion worth in stocks and warrants. According to the New York Times, “’That’s a shortfall of about $78 billion,’ [Warren] said [in Congressional testimony], adding that Mr. Paulson ‘was not entirely candid’ in his description of TARP’s bank capital injection program.”
I know it’s hard to believe former Treasury Secretary Paulson less than forthright, but it could be the economic meltdown is beyond even his comprehension. The fact remains, we have seen little value for the $350 billion in TARP funds, other than financial institution consolidations and a couple of cancelled junkets and perqs, like Citigroup’s new jet. Loans are still not flowing, jobs are still being lost, and now credit card rates are skyrocketing.
The banks say they’re using the money as intended. They claim TARP money is not being used for executive bonuses. If they were all losing money and there was not TARP bailout, how could they have paid bonuses totalling $73.88 billion? That’s about 60% of the $125 billion in TARP money received by Morgan Stanley, Wells Fargo, Goldman Sachs, Citigroup, and JP Morgan Chase. Citigroup can claim transparency, but Ms. Warren described the bailout as “an opaque process at best.”
Now, after 4 short months, TARP’s independent Special Inspector General is looking into potential fraud in at least one TARP-funded program. Neil Barofsky, the SIG, told Congress he’s “already opened several criminal investigations involving multiple jurisdictions.” Your tax dollars at work.