Sanford takes aim at bailouts
Governor urges letters to Congress, says taxpayers are being 'gamed'
By Yvonne Wenger
The Post and Courier
Tuesday, November 11, 2008
COLUMBIA — Gov. Mark Sanford urged residents Monday to make their voices heard before Congress makes any more decisions about how to deal with the ailing economy.
Sanford said that ordinary taxpayers are being hoodwinked and that he believes using more government money to push the nation out of a financial mess is a big mistake.
"The federal government, and by extension taxpayers, are being gamed. I think it's dangerous over the long run the way that taxpayers are being sapped, and this dynamic is playing out in South Carolina," Sanford wrote in a letter Friday to U.S. Treasury Secretary Henry Paulson to alert him to unintended consequences in South Carolina.
In his statements Monday, Sanford cited two specific incidents that bothered him:
-- A retirement date for the CEO of a major bank headquartered in South Carolina that was moved up two months to allow Mack Whittle to collect an $18 million package, a move that would allow the company to also apply for money from the $700 billion federal bailout. Had Whittle, the chairman, president and chief executive officer of The South Financial Group Inc., retired when initially expected, many surmised that he couldn't collect the "golden parachute" while the company sought federal aid, Sanford said.
The company, which owns Carolina First Bank, told The Associated Press in a statement Monday that Whittle had reached an agreement with the board to step down before the U.S. Treasury announced its buyout plans Sept. 2.
The board had no right to limit Whittle's long-standing agreement with the company, where he worked for 20 years and was its only chief executive officer, newly elected board Chairman John C.B. Smith said in the statement.
"Although Governor Sanford made no attempt to discuss these matters with TSFG prior to his press conference, we would welcome the opportunity to discuss this matter with the governor," Smith said.
In September, the company announced Whittle, who founded it in 1986 with one office in Greenville, would retire by year's end. He left at the end of October.
-- Board members of several community banks are applying for bailout money, despite good credit and strong balance sheets, for competitive purposes, according to the Governor's Office.
Sanford said residents need to write or call their congressmen and senators to alert them to their viewpoints to make sure they aren't drowned out by special interests.
"I think a lot of people feel betrayed by the system," Sanford said.
Homeowners and borrowers who play by the rules could be forgotten as Washington erodes the principles of consequences for bad financial decisions by considering yet another bailout plan, Sanford said.
Leadership on Capitol Hill is floating ideas for potentially spending another $100 billion on a stimulus package centered on infrastructure improvements and job creation in addition to money that could be set aside to rescue the automotive industry.
Sanford said the government injected $2.3 trillion into the economy this year and adding another $100 billion won't solve the problem. Congress would either have to borrow more money from places such as China, raise national debt or start printing more money.
"The by-product of this sort of thing gets real scary, real fast," Sanford said. He delivered similar remarks before the U.S. House Ways and Means Committee on Oct. 29.
First District U.S. Rep. Henry Brown, who represents much of Charleston, reacted to Sanford's comments.
"During these times of economic uncertainty, many continue to point fingers, and while there is plenty of blame to be placed, we need to begin focusing on the true causes of our economic downturn and ensure that taxpayers do not fall victim in the process," Brown, a Republican, said in a statement.
The country needs to enact tax relief and viable energy solutions that are focused on easing the financial strains of working families and small businesses, Brown said.
U.S. Rep. and House Majority Whip Jim Clyburn wrote in a statement: "We have an economic crisis, a housing crisis, an energy crisis, a health care crisis, and the list goes on and on. Governor Sanford's reaction may be to stick his head in the sand and ignore the problem, but I believe that action is required. ... I fully support another economic recovery package that will create jobs."
Sanford letter and reaction
Text of Gov. Mark Sanford's letter
to Treasury Secretary Henry Paulson
Text of Gov. Mark Sanford press release
on the buyouts
Statement from House Majority Whip James E. Clyburn
in reaction to Gov. Sanford
Congressman Henry Brown's reaction
to the Governor's remarks