Congress' Treatment of "Paulson and Perps" During This GOP Economic Catastrophe Is Reprehensible
This is enough to make regular hardworking Americans' blood boil. Congress allowed Lurch aka Hank Paulson and his corrupt crew to dole out $700 billion plus to the Wall Street perpetrators of this financial catastrophe.
Congress had no supervision or oversight in place, no demands that those in Wall St. top management resign. It didn't even attach a basic requirement of those crooks receiving money: make loans!
So, because of the possible deliberate stupidity of the millionaires on Capitol Hill, the Wall Street crooks are getting hundreds of billions of taxpayers' money and using it for management compensation and buying other companies in a monopolistic purchasing frenzy that well may be against anti-monopoly regulations....lining their pockets but no loan making.
This should make regular Americans angry.
From Zachary Roth at TPM Muckraker: "It looks like the limits on executive compensation that Democrats in Congress fought to include in the bailout bill aren't a top priority for Treasury.
"In other words, Treasury officials aren't even on the same page with each other about how to enforce the limits -- and some think it can be left to the banks, fox-henhouse concerns be damned."
And this: "Here's a bit more detail, from page 25 of the GAO report, on what seems like the Treasury's utter aversion to requiring banks to offer any information whatsoever on what they're doing with the billions of dollars of taxpayer money they're getting.
"So it seems to come down to this: the banks won't say what they're doing with the money, and Treasury is too polite to ask."
And this: "The authors of the GAO report don't appear impressed by Treasury's efforts to avoid conflicts of interest -- one of the prime concerns raised by some observers, given the number of top Treasury officials who used to work for companies receiving money under the bailout program."
And this: "The GAO report makes clear that the urgency of the crisis has meant that oversight procedures have taken a backseat. It concludes in part:
Because TARP is relatively new, and because the crisis makes immediate action imperative, Treasury is operating on a number of fronts concurrently. It is setting up programs and establishing oversight policies and procedures at the same time. As a result, we are seeing some lag in administrative efforts -- for example, internal controls -- as the programs proceed.
...Treasury has not yet set up policies and procedures to help ensure that [Capital Purchase Program] funds are being used as intended.
"And it recommends that those procedures be set up as soon as practicable.
The report is now available online (pdf)."
And this: "Check out this nugget from page 15 of the GAO report on how Treasury is spending the bailout money:
[Treasury's Office of Financial Stability] has not yet determined if it will impose reporting requirements on the participating financial institutions that could enable OFS to monitor, to some extent, how the financial institutions are using capital infusions.
"In other words, Treasury may not force banks even to tell the department how the banks using the billions of dollars they're getting. It's a no-strings-attached deal, it would seem."
And this: "A just-released report by the Government Accountability Office on how the Treasury Department is using the $700 billion allocated to it by Congress for the financial bailout reaches some discouraging conclusions.
It finds that:
Treasury has yet to address a number of critical issues, including determining how it will ensure that CPP is achieving its intended goals and monitoring compliance with limitations on executive compensation and dividend payments. Moreover, further actions are needed to formalize transition planning efforts and establish an effective management structure and an essential system of internal control.
"We're looking through the report here at TPMmuckraker and will bring you more detail as we find it..."
Meanwhile this is how some Republican senators continue to be obstuctionist during this economic crisis.
From TPMMuckraker: "Here's an interesting nugget in Congress's response to the financial crisis that hasn't received as much attention as it deserves.
"Earlier this month, the Bush administration nominated Neil Barofsky, a federal prosecutor, to be the Treasury Department's special inspector general on the bailout program. That's a crucial post, given the astronomical sums at issue, the broad authority that Treasury has been given to distribute them, the concerns that have been raised about possible conflicts of interest, and the general urgency of our efforts to prevent an economic collapse.
"So you'd think Congress would be doing everything it could to get Barofsky confirmed right away. You'd be wrong.
"Last week, Sen. Chris Dodd, the Connecticut Democrat who chairs the banking committee, issued a little-noticed statement saying that although the nomination "was cleared by members of the Senate Banking Committee, the leadership of the Senate Committee on Homeland Security and Governmental Affairs, and all Democratic Senators," it was "blocked on the floor by at least one Republican member." (itals ours.)
Senate rules allow any senator to anonymously block a vote on confirmation to any federal post, for any reason.
More about the deliberately incompetent and corrupt Paulson from Paul Kiel at ProPublica.
"In the past two and a half months since Treasury Department Secretary Hank Paulson first proposed TARP, the massive program to buy troubled mortgage assets, Paulson has reversed course a number of times.
"Testifying to Congress, Paulson initially rejected the idea of buying equity stakes in the country's banks. Then weeks later his department decided to do just that, eventually junking his original idea.
"The lurching evolution of the government's response is a symptom of a lack of a coherent strategy, says Elizabeth Warren, the chair of the new congressional panel set up to oversee the bailout. In an interview with the New York Times, Warren promises to do what should have been done first: get Treasury to explain "what it's doing and what it plans to do -- and whether either of those are likely to address what's going wrong."
"Those questions were never asked, Warren says, because lawmakers, like the public, were "stunned" by the sudden onset of the financial crisis. And she indicates that one of the main reasons that Treasury officials have been inconsistent in their response is that they're underplaying the root cause of the crisis. Warren, an expert on consumer bankruptcy and professor at Harvard Law School, says Treasury is overlooking the little guy:
Meetings with Treasury officials so far have made her question whether they understand that "household financial health is profoundly tied to the economic health of the nation," she said. "You cannot repair this economy if you can't repair those families, and I'm not sure the people directing the bailout see that as their job."..."Any effective policy has to start with the households," she said. "Years of flat wages, low savings and high debt have left America's households extremely vulnerable."
"Warren promises the congressional panel's first report next Wednesday, which she says will lay out "the central questions that Treasury should be addressing as it spends the taxpayers' money." She says that another report, one with recommendations for reforms to the financial regulatory structure, will be ready by Barack Obama's inauguration."
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