12-29-08, 9:59 am
Some $350 billion in taxpayer cash has been handed over to the biggest banks in the country without oversight or even the slightest curiosity by the US government about what has been done with the money.
A recent Associated Press investigation of some of the banks that received billions of dollars as part of the bailout revealed that most of the banks have no intention of letting anyone, especially taxpayers, know what has happened to the money.
According to the AP, a spokesperson for JPMorgan Chase, which took $25 billion from taxpayers, said, '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.' We have not disclosed that to the public. We're declining to.'
'We're choosing not to disclose that,' said the spokesperson for Bank of New York Mellon, which received about $3 billion, when asked about his banks use of the cash.
A survey of several other banks that took billions from the federal government's Troubled Assets Relief Program, or TARP, declined to tell AP what they have been doing with the money.
Other investigations have shown, however, that some of the biggest banks have continued to pay their CEOs and other top executives hundreds of thousands of dollars in salaries and even millions more in bonuses. Many of the banks have continued to pay for private corporate jets for their executives as well as expensive weekend getaways.
AIG, the massive insurance corporation, for example, spent $442,000 on a lavish corporate spa retreat just days after receiving $85 billion of taxpayer money. Some of the bailout money has gone to prop up banks in other countries.
While the Bush administration's rationale for the program was to loosen the credit markets in order to stimulate economic activity, many banks seemed to either have hoarded the money or have used it to buy up other banks, according to media reports.
For example, Bank of America, which took $15 billion in taxpayer funds, has recently increased its holdings in the China Construction Bank Corp. Meanwhile, only after a four-day sit-in by workers, the threat of a boycott by the state of Illinois, and massive political pressure, including a statement by President-elect Obama siding with the workers, at Republic Windows and Doors, a Chicago factory owned partially by the Bank of America, did the bank agree to extend credit to the factory management in order to settle back pay to laid-off workers.
In other words, instead of doing what TARP was supposed to do – loosen credit to keep people working – the Bank of America only provided a new line of credit to Republic Windows and Doors after being exposed.
The lack of accounting has angered many people. In a recent e-mail to its members, MoveOn.org circulated a national petition calling for a halt to spending additional TARP funds until banks provide a public accounting of what they have done with the money.
'Wall Street brought our economy to its knees through bad lending and complex financial instruments based on little more than air,' the MoveOn.org e-mail noted. 'Then Wall Street got took our bailout money and seems to have spent it on everything BUT getting the economy moving.'