Source:
WSJ
DECEMBER 11, 2008
... In a hearing Wednesday, members of the House Financial Services Committee questioned Treasury Assistant Secretary Neel Kashkari over his agency's handling of the Troubled Asset Relief Program, citing critical reports by the Government Accountability Office and an oversight panel appointed by Congress ...
Lawmakers faulted Treasury for what they said was its failure to address the record numbers of foreclosures that continue to weigh on financial institutions and the broader economy after TARP was implemented in October in response to a credit crisis sparked by woes in the housing market. They also criticized what they described as the agency's reluctance to ensure that banks are using billions of dollars in federal funds to lend to consumers and businesses.
"We have been sold a pig-in-a-poke and a bait-and-switch has occurred," said Rep. Virginia Brown-Waite, a Florida Republican.
Treasury has used or committed most of the money available in the first tranche of funds under TARP, with $15 billion remaining out of an original $350 billion. With financial markets still weak and the broader economy in recession, Treasury Secretary Henry Paulson has been trying to decide whether to seek access to the second half of the funds ...
Read more:
http://online.wsj.com/article/SB122891702630494623.html?mod=googlenews_wsj
Oversight Board To Treasury: What's Going On?
By Natalie Sherman - December 10, 2008, 12:16PM
A four-person oversight panel for the Treasury's $700 billion bailout released a bewildered preliminary report this morning looking into how Treasury is spending its billions of dollars of taxpayer money.
U.S. stocks have declined 40 percent this year, 12 of the nation's largest financial institutions are teetering on the brink of bankruptcy, and 171 banks are on the Treasury's "problem list." Since Congress approved the bailout in October, the Treasury has allocated some $335 billion, but some of the most fundamental questions about where that money went remain unanswered.
"It is unclear" the report -- written by a panel led by Harvard Law professor and bankruptcy expert Elizabeth Warren -- says at one point, and it continues that way for some time, wondering "What is Treasury's Strategy?" "Is the Strategy Working?" What Have Financial Institutions Done with the Taxpayers' Money?" ...
http://tpmmuckraker.talkingpointsmemo.com/2008/12/oversight_board_to_treasury_whats_going_on.phpBANK BAILOUT
Committee takes Treasury to task over bailout spending
By Peter Whoriskey, Howard Schneider
THE WASHINGTON POST
Thursday, December 11, 2008
In its first report, the Congressional Oversight Panel for Economic Stabilization posed a series of questions about how banks have used the money from the federal government, whether the public is getting a fair return and what Treasury is doing to help families.
The questions, some of them implicitly criticizing the program, were released at a hearing of the House Financial Services Committee.
"These are the tough questions that people all over the country are asking," said Elizabeth Warren, chair of the panel and a law professor at Harvard University. "They are tough. This is $700 billion we are talking about."
Some Democrats in Congress have said that the Troubled Asset Relief Program addresses the needs of financial institutions but ignores ordinary Americans ...
http://www.statesman.com/business/content/business/stories/other/12/11/1211bankbailout.htmlBailout Overseer: We're Still Trying To Get Office Space
By Natalie Sherman - December 10, 2008, 4:55PM
Elizabeth Warren, the Harvard Law professor who chairs the Congressional Oversight Panel, which is monitoring the Treasury's spending of the bailout money, appeared this afternoon before a House commmitee to testify about the report -- better characterized as a set of questions -- the panel released this morning.
And from what Warren said, it doesn't appear that oversight of the billions of dollars at stake is being treated by either Treasury or Congress as a top priority.
Warren told the committee that the panel's four members had met for the first time just two weeks ago, and were still "struggling" to find office space. She added that all the members of the panel are serving part-time.
"Well, that raises the question of whether this can really be taken seriously," said Rep. Melvin Watt (D-NC), echoing fears about the strength of the oversight mechanisms are in place ...
http://tpmmuckraker.talkingpointsmemo.com/2008/12/bailout_overseer_were_still_trying_to_get_office_space.phpHensarling demurs on bailout report
11:12 PM CST on Wednesday, December 10, 2008
By DAVE MICHAELS / The Dallas Morning News
dmichaels@dallasnews.com
WASHINGTON – Rep. Jeb Hensarling of Dallas, the lone Republican on the congressional panel overseeing the government's $700 billion financial rescue fund, suggested Wednesday the effort was "not serious" and signaled he might withdraw from the group.
Mr. Hensarling stopped short of saying he would quit, but his comments fleshed out some of the partisan struggles behind the committee's work.
Elizabeth Warren, the panel's chairwoman, told the House Financial Services Committee on Wednesday that bailout panel members would investigate how banks are spending the money they have received from the program, known as the Troubled Asset Relief Program, and whether it was helping the "real economy."
The mission of the four-member panel was outlined in a report it issued Wednesday, which Mr. Hensarling voted against. In an interview after the hearing, Ms. Warren appeared to be surprised by Mr. Hensarling's opposition – in part because "he never objected to a single word in the draft," she said ...
http://www.dallasnews.com/sharedcontent/dws/bus/stories/121108dnbusbailoutpanel.3d1b0f7.html (Congressional Oversight Panel for Economic Stabilization)
Anger, doubt aired in financial bailout hearing
By JIM KUHNHENN – 6 hours ago
WASHINGTON (AP) ... Neel Kashkari, director of the Treasury office that oversees the bailout program, told lawmakers that Paulson has made no determination about whether to request the remaining money. He said the Treasury Department is keeping President-elect Barack Obama's economic team informed of developments ...
At least two lawmakers quizzed Kashkari about retention payments made to top executives by troubled insurer AIG. The company has received billions of dollars in government help, including $40 billion from the Troubled Asset Relief Program. In a recent letter to Rep. Elijah E. Cummings, D-Md., AIG CEO Edward M. Liddy said 168 employees were scheduled to receive retention payments ranging from $92,500 to $4 million.
"Is $3 million a year bonus, a $3 million bonus, is that excessive to a company owned 80 percent by the United States government and as to which over $125 billion of taxpayers' money has been invested?" Rep. Donald Manzullo, R-Ill., said.
"It is excessive for a failing institution, yes," Kashkari replied. But he said he was not familiar enough with the AIG payments to determine whether they met Treasury compensation standards ...
http://www.google.com/hostednews/ap/article/ALeqM5guZZD6JB1VTosJf63ts4fBaRDSawD95053R00Lawmakers rap Treasury on bailout plan
Wed Dec 10, 2008 10:23pm EST
... In early October, Congress authorized the Treasury to use $700 billion of taxpayer money to buy soured assets from banks to ease a financial panic. But a week later, the Treasury backed away from that plan, saying it would instead try to strengthen the financial system by buying shares in the banks.
"We gave them money for one thing and then they used it for another," said Rep. David Scott, a member of the House of Representatives Financial Services Committee, during a hearing that stretched over five hours and turned contentious at times as lawmakers questioned officials' sensitivity to the needs of average Americans ...
Rep. Maxine Waters, a California Democrat who had supported the $700 billion program, pressed Kashkari for actions that would throw troubled homeowners a lifeline.
"Please don't come here and ask for another penny because if you do, I'm going to work 24 hours a day with the same people I worked with to support you to make sure that they do not support giving you another dime," she said ...
http://www.reuters.com/article/newsOne/idUSTRE4B874820081211Congress slams Treasury Dept handling of financial bailout
2 hours ago
WASHINGTON (AFP) ... the worse barb came from one of Kashkari's fellow Republican Party members.
"We don't have confidence in your answers," said representative Donald Manzullo.
"On the basis of your answers, I think you should step down," he added.
http://www.google.com/hostednews/afp/article/ALeqM5g6bpYUSLGYHM9v7h5WoUlYODNBNwTreasury Undersecretary defends bailout
Wednesday, December 10, 2008 | 4:22 PM
... The Treasury Department has received preferred stock and warrants to buy additional shares in return for the $150 billion it has invested so far in 52 banks, including Bank of America Corp., Citigroup Inc. and JPMorgan Chase & Co. Inc.
But an Associated Press analysis Thursday showed that the warrants to purchase about 1.2 billion additional shares in those banks have so far lost about one-third of their value.
"We're not day traders, and we're not looking for a return tomorrow," Kashkari said. "Over time, we believe the taxpayers will be protected and have a return on their investment" ...
The department's oversight of the money has come under increasing criticism from Democrats in Congress, particularly in the wake of a critical report by the Government Accountability Office earlier this week ...
http://abclocal.go.com/kgo/story?section=news/politics&id=6549414Transition Concerns
POSTED: 02:10 PM ET, 12/10/2008 by Chris Matthews
The GAO issued their first official report today on the Treasury Department's $700 billion bailout plan, offering nine actions the Treasury should take to address "a number of critical issues."
This was the first of the GAO's reports on TARP to be given every 60 days, as mandated by the program. Earlier this month, the GAO released an initial report on the program that underscored its lack of oversight.
Today's report on the Troubled Asset Relief Program (TARP) addressed many of the same concerns as the initial one, including the fact that the Treasury has yet to formalize a system of oversight. Among the GAO's chief concerns:
Determining how will ensure that CPP is achieving its intended goals and monitoring compliance with limitations on executive compensation, dividend payments, and stock repurchases. Moreover, it has yet to formalize transition planning efforts given the upcoming shift to a new administration or to establish an effective management structure and an essential system of internal controls. In our report, we recommended that Treasury take nine actions to help ensure the program's integrity, accountability, and transparency ...
http://voices.washingtonpost.com/washingtonpostinvestigations/2008/12/gao_issues_tarp_report.html?nav=rss_blog (GAO via WaPo)
Follow the Money? Treasury Doesn’t Wanna
by Paul Kiel, ProPublica - December 10, 2008 4:16 pm EST
... The Treasury Department certainly doesn’t have much of an idea about how that money’s being spent ...
Today, Neel Kashkari, the Treasury official supervising the TARP, testified before Congress. And as before, he rejected the idea of tracking the money. “Each financial institution’s circumstances are different, making comparisons challenging at best, and it is difficult to track where individual dollars flow through an organization,“ he explained in his opening statement ...
http://www.propublica.org/article/follow-the-money-treasury-doesnt-wanna-1210Oversight Board Raises Questions About Treasury Financial Bailout
By Phil Mattingly, CQ Staff
... “I wonder whether or Mr. Kashkari, back when they were still working for Goldman Sachs, ever agreed to a deal in which billions of dollars changed hands based on a two-page application without asking what the money was going to be used for and whether it was going to be paid back,” said Spencer Bachus of Alabama, the Finance Committee’s ranking Republican.
http://www.cqpolitics.com/wmspage.cfm?docID=news-000002995572Is Treasury doing enough to monitor banks, help trouble homeowners?
By DIANA B. HENRIQUES, New York Times
Last update: December 10, 2008 - 8:31 PM
... Lawmakers focused on a warning in a report last week from the Government Accountability Office, represented at the hearing by Gene Dodaro, the acting comptroller-general. In that report, Dodaro's office found that the Treasury does not have the tools in place to ensure that banks that are receiving federal money are lending it to consumers and small businesses.
"The anecdotal evidence is still overwhelming that there are people who think they are good borrowers who can't get loans," Frank said ...
http://www.startribune.com/nation/35937744.html?elr=KArksLckD8EQDUoaEyqyP4O:DW3ckUiD3aPc:_Yyc:aULPQL7PQLanchO7DiUssTreasury rapped for no bailout specifics
December 11, 2008
"This was supposed to help keep people in their homes, make it possible for the American people to make large purchases like automobiles that could boost our ailing economy," Rep. Bill Pascrell, D-N.J., said during the House Financial Services Committee. "Sadly, that does not seem to be occurring."
Committee Chairman Barney Frank, D-Mass., said he was distressed that the Treasury Department hasn't used any funds so far to reduce the number of foreclosures.
"The refusal so far to use the money for that purpose has been, I think, a violation of the intent and undermines the ability to get the votes in this Congress to do things in the future," Frank said ...
Ranking Republican Sen. Spencer Bachus of Alabama noted struggling auto companies had to offer explanations and documents in seeking a loan package, which "stand in stark contrast to the lack of information we've received from Treasury or the financial institutions that have received taxpayer money under (the Troubled Asset Relief Program)" ...
http://www.themoneytimes.com/news/20081211/treasury_rapped_for_no_bailout_specifics-id-1044308.htmlNew congressional panel to probe bailout
Will look at Treasury's returns
By Neil Roland
December 10, 2008 3:54 PM ET
A new Congressional panel overseeing the $700 billion financial rescue said today it plans to investigate why the Treasury Department seems to be getting less favorable terms on its investments in banks such as Goldman Sachs than private investors like Warren Buffett.
The panel headed by Harvard Law professor Elizabeth Warren said it plans to look into how Treasury’s investments in Citigroup, Morgan Stanley and Goldman Sachs “were negotiated and determined” in light of apparently more lucrative private investments in these firms.
“Is the public receiving a fair deal?” said the first report by the panel created under the bail-out legislation signed in October. “The oversight panel believes that a critical aspect of its mission is to determine whether the United States government has received assets comparable to its expenditures.”
Among the recent private investments in banks also receiving government bail-out funds were Mitsubishi UFJ Financial Group of Japan’s $9 billion stake in Morgan Stanley; Buffett’s $5 billion investment in Goldman Sachs, and the Abu Dhabi Investment Authority’s $7.5 billion investment in Citigroup, according to the 38-page report released at a House Financial Affairs Committee hearing. Committee chairman Barney Frank (D-Mass.) said today he plans to summon the chief executives of a number of financial institutions receiving federal investments under the bail-out to testify about how the money is being used ...
http://www.financialweek.com/apps/pbcs.dll/article?AID=/20081210/REG/812109983/1036Kashkari: No Collapse Means Bailout is Working
By KELLY CURRAN and PAUL JACKSON
December 10, 2008
... In remarks delivered before the House Committee on Financial Services, Kashkari said the Treasury’s efforts are working — even if there are problems that need to be addressed. “People often ask: how do we know our program is working?” Kashkari said. “First, we did not allow the financial system to collapse. That is the most direct, important information.”
Not all legislators, however, remain convinced that the nation’s financial system would have collapsed without passing legislation that established TARP. In a 38-page document released by the TARP Congressional Oversight Panel in conjunction with the hearing Wednesday, the panel said that while TARP empowered Treasury, “with these powers goes the responsibility to explain the reasons for the uses made of them” ...
http://www.housingwire.com/2008/12/10/kashkari-no-collapse-means-bailout-is-working/US Rep Frank: Treasury to ultimately get TARP cash
Reuters, Wednesday December 10 2008
... Rep. Barney Frank, the Massachusetts Democrat who chairs the House of Representatives Financial Services Committee, has vowed to block access to the remaining cash unless the Treasury Department agrees to direct more money to help struggling homeowners.
"My own advice is, I think ultimately we should have that $350 (billion) but after there's been a a lot of conversation about how it would used," he said at a hearing on the rescue funds. "I don't think it would be to anybody's interest to force that issue before there is a consensus."
Frank said he did not expect Treasury to request the remaining money before January. (Reporting by Emily Kaiser; Editing by Leslie Adler)
http://www.guardian.co.uk/business/feedarticle/8143326
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