Kucinich exposes disastrous use of TARP funds Kucinich opened with
Posted by: "ranger"
Tue Jun 30, 2009 10:51 pm (PDT)
Kucinich opened with this salvo, "When the American people find that
their tax dollars, which were supposed to be used to get us out of this
financial crisis, instead are being used to ship jobs and investments
overseas, there will be outrage." His comments are contained in the
subcommittee's report released on March 9, 2009. The subcommittee's
report accused banks of spending Troubled Asset Relief Program (TARP)
money on "questionable transactions" and criticized the Treasury
Department for inadequately supervising them.
Questioning the propriety of Treasury's scheme, the subcommittee zeroed
in on an $8 billion Citigroup Inc. loan to Dubai, a $7 billion Bank of
America investment in China Construction Bank Corp., and a $1 billion
investment in India by J.P. Morgan. The three financial institutions got
a total of $120 billion in tax dollars through the bailout program.
Although not illegal, Kucinich questioned the wisdom of transactions
that direct money to foreign governments rather than the domestic
"How does a multibillion financing deal to Dubai ease the liquidity
crisis in the United States of America? The report took shots at other
spendthrift gimmickry of banks, "What about other kinds of uses of TARP
funds: corporate spending on lavish parties, the continuation of
contractual agreements to pay for naming rights on professional sports
stadiums, corporate sporting event sponsorships?"
Kucinich bulls-eyed "significant shortcomings in Treasury ?s oversight
in dispersing money through TARP." The committee report asserted that
the department hasn't questioned any TARP recipient about its use of the
money. "In spite of broad investigative and audit authority, Treasury
has chosen not to request detailed and comprehensive information from
TARP recipients about the use of funds. As a result, Treasury has
limited ability to detect or prevent waste and abuse."
The report also put Goldman Sachs's $2 billion repurchase of its own
stock in December in its cross hairs. The repurchase caused Goldman
Sachs share value to increase almost 20%. That was a significant
financial benefit for senior executives, who own large amounts of
company stock. Congressional investigators are looking at whether this
insider deal was an inappropriate way to enrich those top employees
despite a public clamor for strict limits on executive compensation.
"This is a textbook definition of a taxpayer's nightmare."