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Chickens come home to roost!

23/03/2009

From Newsweek is this little piece:-

While a few big firms, such as Wells Fargo and JP Morgan Chase, have curtailed their campaign giving, others are quietly doling out cash to select members of Congress, particularly those who serve on committees that oversee TARP. In recent filings with the Federal Election Commission, the political action committee for Bank of America (which got $15 billion in bailout money) sent out $24,500 in the first two months of 2009, including $1,500 to House Majority Leader Steny Hoyer and another $15,000 to members of the House and Senate banking panels. Citigroup ($25 billion) dished out $29,620, including $2,500 to House GOPWhip Eric Cantor, who also got $10,000 from UBS which, while not a TARP recipient, got $5 billion in bailout funds as an AIG “counterparty.” “This certainly appears to be a case of TARP funds being recycled into campaign contributions,” says Brett Kappell, a D.C. lawyer who tracks donations.

Again from the Newsweek piece:-

The cash flow is already causing angst inside the Beltway. “The last thing I want to do is wake up one morning and see our PAC check being burned on C-Span,” said one bank lobbyist, who asked not to be identified because of the issue’s sensitivity. House Speaker Nancy Pelosi and House Financial Services chair Rep. Barney Frank both said recently they won’t take donations from TARP recipients. But House Democratic fundraisers have quietly passed the word that the party’s campaign committee will resume accepting them—but down the road, not right now. Said one fundraiser, who also requested anonymity, “These are treacherous waters.”

And from Bob Ostertag at the Huffington Post:-

Forget the bonuses at AIG. Chump change. Let’s put what Goldman Sachs has been up to in plain English. Goldman Sachs had made a lot of esoteric financial transactions with AIG. Banks were collapsing at the time, leaving their investors with huge losses. When things started looking shaky at AIG, Goldman and other investors started calling in their claims, and pushed AIG off the cliff.

Now ask yourself: with banks collapsing, why would you push the one you had put so much money in to collapse?

Answer: because you had your boys on the inside in Washington, that’s why. And your boys got a bail-out package for AIG which actually paid you more than your claims that broke the bank. What investors had demanded from AIG was collateral on debts. But they actually got with the bailout was the whole damn amount, 100 cents on the dollar.

To put it even more bluntly: if AIG had managed to not collapse and not require $180 billion in taxpayer money, Goldman Sachs would be sitting today with some very very shaky investments. But since AIG collapsed, the folks at Goldman cleaned up.

Or even more bluntly: Goldman used AIG as a funnel.

And a little later on in the same piece:-

Goldman Sachs employees gave just shy of a million dollars to the Obama campaign, ranking second in contributions. Citigroup and JPMorgan ranked sixth and seventh. Goldman Sachs gave Obama four times more than they gave McCain.

This is one big fat ugly chicken that is coming home to roost.

Now readers might like to remember that it was Obama that pulled out of taking federal funding, not McCain. It was Obama that had the massive money raising machine.

Therefore, Obama should recognise that commentators will join the dots.

Ostertag states that 55% of the Obama campaign funds came from corporates. So much for the non-tradional approach.

Change we can believe in. Yeah, right.

So we have major campaign contributors seemingly benefiting from TARP funding.

Yet did not the world change on January 20, was it not the dawn of a new era. Did not the earth move?

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3 Comments
  1. lucy permalink
    23/03/2009 18:46

    Of course it is also very very frightening that those in Citicorp and the other corporates who contributed to a political party so they would benefit from the largest government bailout that they could buy and not leaving it up to the markets to sought out. I don’t have to say that it reeks of self interest and does not bode well for the future of capitalism.

    I never actually thought that I would bring this up but years ago I to read “Atlas Shrugged” (Ayn Rand) and I am beginning to get a little freaked out in the similarities between that book and ‘real life’

    Like

  2. lucy permalink
    23/03/2009 18:30

    As well as all of the other implications, This tends to cement that the bonus payments were not put into the bailout agreement by mistake.

    Like

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