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View Full Version : Political Interference Seen in Bank Bailout Decisions - WSJ




Lucille
01-22-2009, 03:01 PM
Breaking News SHOCKER!!!!

Political Interference Seen in Bank Bailout Decisions (http://online.wsj.com/article/SB123258284337504295.html)


Troubled OneUnited Bank in Boston didn't look much like a candidate for aid from the Treasury Department's bank bailout fund last fall.

The Treasury had said it would give money only to healthy banks, to jump-start lending. But OneUnited had seen most of its capital evaporate. Moreover, it was under attack from its regulators for allegations of poor lending practices and executive-pay abuses, including owning a Porsche for its executives' use.

Nonetheless, in December OneUnited got a $12 million injection from the Treasury's Troubled Asset Relief Program, or TARP. One apparent factor: the intercession of Rep. Barney Frank, the powerful head of the House Financial Services Committee.

Mr. Frank, by his own account, wrote into the TARP bill a provision specifically aimed at helping this particular home-state bank. And later, he acknowledges, he spoke to regulators urging that OneUnited be considered for a cash injection.

[...]

"It's totally arbitrary," says South Carolina Gov. Mark Sanford. "If you've got the right lobbyist and the right representative connected to Washington or the right ties to Washington, you get the golden tap on the shoulder," says Gov. Sanford, a Republican.

Our ruling class is just begging us to revolt.

We need to put together a list of grievances, or rather "declare the causes which impel us to the separation."


When in the Course of human events it becomes necessary for one people to dissolve the political bands which have connected them with another and to assume among the powers of the earth, the separate and equal station to which the Laws of Nature and of Nature's God entitle them, a decent respect to the opinions of mankind requires that they should declare the causes which impel them to the separation.

We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness. — That to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed, — That whenever any Form of Government becomes destructive of these ends, it is the Right of the People to alter or to abolish it, and to institute new Government, laying its foundation on such principles and organizing its powers in such form, as to them shall seem most likely to effect their Safety and Happiness. Prudence, indeed, will dictate that Governments long established should not be changed for light and transient causes; and accordingly all experience hath shewn that mankind are more disposed to suffer, while evils are sufferable than to right themselves by abolishing the forms to which they are accustomed. But when a long train of abuses and usurpations, pursuing invariably the same Object evinces a design to reduce them under absolute Despotism, it is their right, it is their duty, to throw off such Government, and to provide new Guards for their future security.

Lucille
01-23-2009, 10:11 AM
More from Volokh (http://volokh.com/posts/1232722936.shtml):



Many of the large American companies that received billions of taxpayer bailout dollars by pleading that they didn't have enough money to lend to customers were, at the same time, spending millions of dollars dispatching lobbyists to influence the federal government.

A Washington Times review of lobbying disclosure reports found that 18 of the top 20 recipients of federal bailout money spent a combined $12.2 million lobbying the White House, the Treasury Department, Congress and federal agencies during the last quarter of 2008.

For instance, the government bought $3.4 billion in American Express Co. stock on Jan. 9 as part of an aid package. In the last quarter of 2008, the company spent more than $1 million on federal lobbying.

The print version of the story also included a chart that listed all of the lobbying expenditures by TARP recipients, but I don't see that chart in the on-line story. General Motors spent about $6 million in lobbying funds over the last two quarters of 2008. Although that seems like a lot of money, it is a drop in bucket compared to the payback that they have received.

BB&T were notable (as is often the case) on the chart because they made no lobbying expenditures (and my impression from what I've read is that they apparently were a bank that was strong-armed into taking TARP funds even though they didn't want them).

Meanwhile, the President of Merrill Lynch has been fired from his position at Bank of America as it has been reported that he accelerated "year-end" executive bonuses to get them paid out before the B of A merger became final--and subsequent request for government TARP funds. He also spent $1.2 million to redecorate his office last year. It really does make me wonder sometimes how these guys can sleep at night.

Once the pork-barrel stimulus plan is finalized I expect we'll see a whole new interesting chart on the links between political contributions and stimulus expenditures.

Deborah K
01-23-2009, 10:17 AM
Unbelievable!

Lord Xar
01-23-2009, 10:58 AM
why is Barney Frank still employed? Why is he allowed to perpetuate this corruption?