Where'd the Bailout Money Go?
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Thread: Where'd the Bailout Money Go?

  1. #1

    Where'd the Bailout Money Go?

    [I]Well as Gomer Pyle used to say. Surprise, Surprise , Surprise.

    FOXNews.com - Where'd the Bailout Money Go? Shhhh, It's a Secret - Local News | News Articles | National News | US News

    Where'd the Bailout Money Go? Shhhh, It's a Secret
    Monday, December 22, 2008

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    WASHINGTON — It's something any bank would demand to know before handing out a loan: Where's the money going?

    But after receiving billions in aid from U.S. taxpayers, the nation's largest banks say they either can't track exactly how they're spending the money or they simply refuse to discuss it.

    "We've lent some of it. We've not lent some of it. We've not given any accounting of, 'Here's how we're doing it,"' said Thomas Kelly, a spokesman for JPMorgan Chase, which received $25 billion in emergency bailout money. "We have not disclosed that to the public. We're declining to."

    The Associated Press contacted 21 banks that received at least $1 billion in government money and asked four questions: How much has been spent? What was it spent on? How much is being held in savings, and what's the plan for the rest?

    None of the banks provided specific answers.

    "We're not providing dollar-in, dollar-out tracking," said Barry Koling, a spokesman for Atlanta, Georgia-based SunTrust Banks Inc., which got $3.5 billion in taxpayer dollars.

    Some banks said they simply didn't know where the money was going.

    "We manage our capital in its aggregate," said Regions Financial Corp. spokesman Tim Deighton, who said the Birmingham, Alabama-based company is not tracking how it is spending the $3.5 billion it received as part of the financial bailout.

    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, a Republican 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?"

    Nearly every bank AP questioned — including Citibank and Bank of America, two of the largest recipients of bailout money — responded with generic public relations statements explaining that the money was being used to strengthen balance sheets and continue making loans to ease the credit crisis.

    A few banks described company-specific programs, such as JPMorgan Chase's plan to lend $5 billion to nonprofit and health care companies next year. Richard Becker, senior vice president of Wisconsin-based Marshall & Ilsley Corp., said the $1.75 billion in bailout money allowed the bank to temporarily stop foreclosing on homes.

    But no bank provided even the most basic accounting for the federal money.

    "We're choosing not to disclose that," said Kevin Heine, spokesman for Bank of New York Mellon, which received about $3 billion.

    Others said the money couldn't be tracked. Bob Denham, a spokesman for North Carolina-based BB&T Corp., said the bailout money "doesn't have its own bucket." But he said taxpayer money wasn't used in the bank's recent purchase of a Florida insurance company. Asked how he could be sure, since the money wasn't being tracked, Denham said the bank would have made that deal regardless.

    Others, such as Morgan Stanley spokeswoman Carissa Ramirez, offered to discuss the matter with reporters on condition of anonymity. When AP refused, Ramirez sent an e-mail saying: "We are going to decline to comment on your story."

    Most banks wouldn't say why they were keeping the details secret.

    "We're not sharing any other details. We're just not at this time," said Wendy Walker, a spokeswoman for Dallas-based Comerica Inc., which received $2.25 billion from the government.

    Heine, the New York Mellon Corp. spokesman, said he wouldn't discuss spending details, but added: "I just would prefer if you wouldn't say that we're not going to discuss those details."

    The banks which came closest to answering the questions were those, such as U.S. Bancorp and Huntington Bancshares Inc., that only recently received the money and have yet to spend it. But neither provided anything more than a generic summary of how the money would be spent.

    Lawmakers say they want to tighten restrictions on the remaining, yet-to-be-released $350 billion block of bailout money before any more cash is handed out. Treasury Secretary Henry Paulson said the department is trying to step up its monitoring of bank spending.

    "What we've been doing here is moving, I think, with lightning speed to put necessary programs in place, to develop them, implement them, and then we need to monitor them while we're doing this," Paulson said at a recent forum in New York. "So we're building this organization as we're going."

    Warren, the congressional watchdog appointed by Democrats, said her oversight panel will try to force the banks to say where they've spent the money.

    "It would take a lot of nerve not to give answers," she said.

    But Warren said she's surprised she even has to ask.

    "If the appropriate restrictions were put on the money to begin with, if the appropriate transparency was in place, then we wouldn't be in a position where you're trying to call every recipient and get the basic information that should already be in public documents," she said.

    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.
    Last edited by HK4U; 12-22-2008 at 12:41 PM.
    By faith Noah,being warned of God of things not seen as yet, moved with fear,prepared an ark to the saving of his house;by the which he condemned the world,and became heir of the righteousness which is by faith Heb.11:7

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  3. #2

    Unhappy

    This news has been brewing for a couple days. Nobody can get a straight answer. This issue Along with 6 figure bonuses for many employees other than top managers. What?
    In Part...
    Bloomberg.com: Worldwide
    Morgan Stanley Bonus Pool Rises as CEO Forgoes Pay (Update2)

    By Christine Harper

    Dec. 19 (Bloomberg) -- Morgan Stanley increased its bonus pool 18 percent to almost $10 billion following the firm's first-ever quarterly loss, saying employees in divisions that reported record results in 2007 deserved the awards.

    Total compensation, including salaries, benefits and bonuses, climbed to $16.55 billion in 2007 from $13.99 billion last year, the New York-based firm said today in a statement. Year-end bonuses, estimated at about 60 percent of the total, will jump to $9.93 billion from $8.39 billion.

    Chief Executive Officer John Mack, who received a $40 million payout in 2006, said he won't accept a bonus after the company wrote down $9.4 billion in debt securities during the quarter. Morgan Stanley, the second-biggest U.S. securities firm, boosted the percentage of revenue set aside for compensation to 59 percent from 47 percent last year to reward employees in units handling equities, investment banking and wealth management, where revenue climbed. .."



    Everybody was appalled at the Detroit 3 flying to DC on Corporate Jets, but what was said about the AIG, Morgan Stanley, or Bank of America's Jets?
    From Associated Press... In part...
    AP IMPACT: Wall Street still flying corporate jets - Yahoo! News

    AP IMPACT: Wall Street still flying corporate jets
    AP IMPACT: Automakers give up executive jets, but Wall Street firms still flying private skies
    Stevenson Jacobs, AP Business Writer
    Sunday December 21, 2008, 11:56 pm EST

    NEW YORK (AP) -- Crisscrossing the country in corporate jets may no longer fly in Detroit after car executives got a dressing down from Congress. But on Wall Street, the coveted executive perk has hardly been grounded.

    Six financial firms that received billions in bailout dollars still own and operate fleets of jets to carry executives to company events and sometimes personal trips, according to an Associated Press review.

    The jets serve as airborne offices, time-savers for executives for whom time is money -- lots of money. And some firms are cutting back, either by selling the planes or leasing them.

    Still, Wall Street's reliance of the rarified mode of travel has largely escaped the scorn poured on the Big Three automakers.

    Insurance giant American International Group Inc., which has received about $150 billion in bailout money, has one of the largest fleets among bailout recipients, with seven planes, according to a review of Federal Aviation Administration records.

    "Our aircraft are being used very sparingly right now," AIG spokesman Nicholas J. Ashooh said. "I'm not saying there's no use, but there's very minimal use."

    To cut costs, AIG sold two jets earlier this year and is selling or canceling orders for four others.

    Five other financial companies that got a combined $120 billion in government cash injections -- Citigroup Inc., Wells Fargo & Co., Bank of America Corp., JPMorgan Chase & Co. and Morgan Stanley -- all own aircraft for executive travel, according to regulatory filings earlier this year and interviews...."
    Semper Fi

  4. #3
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    Gee, who'd have thought that there would be more government waste as a result of this? Not our government?
    Any society that would give up a little liberty to gain a little security will deserve neither and lose both.

    Benjamin Franklin

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