October, 28 2008, 09:39am EDT
Kucinich Continues Investigation of Bail-Out Bonuses
Requests Full Committee Resources to Be Used
WASHINGTON
Congressman Dennis Kucinich, Chairman of the Subcommittee on Domestic Policy is pressing his efforts to head off an avalanche of Wall Street bailout bonuses. Recent reports indicate bonuses and other compensation packages paid by financially troubled firms receiving government assistance could reach into the tens of billions of dollars.
Today he released a letter sent to Congressman Henry Waxman, Chairman of the Committee on Oversight and Government Reform, asking that the Full Committee move quickly to investigate how bailout funds are being spent by the financial service companies participating in Treasury's capital purchase program.
"It would be an affront to taxpayers and shareholders alike if Wall Street executives cashed in on the bailout. We must prevent the diverted directly or indirectly of bailout funds to bonuses and exorbitant compensation packages," he said.
Congressman Kucinich, an opponent to the bailout, has been a leader in calling for stringent oversight on money spent through the bailout program. He asked for the leadership of the Full Committee to ensure that the resources necessary to investigate are available. The Subcommittee will remain a key part of the investigation.
Congressman Kucinich recommended that the Full Committee begin by requesting specific information from each of the 11 companies participating in the Treasury's Capital Purchase Program (Bank of America, Citigroup, J.P. Morgan Chase, Wells Fargo, Morgan Stanley, Goldman Sachs, Merrill Lynch, Bank of New York Mellon, State Street, City National, and Key Bank). The information requested would include compensation data since 2003, descriptions of 'claw back' policies, an itemized list of funds received from government sources, A list of every party who has purchased more than $50 million of impaired assets in the past 24 months, and a description of each organizations risk management procedures.
"I believe that the American taxpayers who have provided this subsidy have legitimate concerns about how those companies will use those funds, what happened to require them to need those funds, and what they will be doing differently in the future to ensure that they will not need more assistance," wrote Kucinich in the letter.
The full text of the letter follows:
October 27, 2008
Henry A. Waxman, Chairman
Oversight and Government Reform Committee
2157 Rayburn HOB
Washington, DC 20515
Dear Henry:
I am writing to ask that the Full Committee move quickly to conduct oversight on the use of Federal monies by financial service companies participating in the Treasury's Capital Purchase program. As you know, Treasury has set aside $250 billion for buying preferred equity in a number of national and regional financial institutions with funds authorized by the Emergency Economic Stabilization Act of 2008, passed recently by Congress.
While the ostensible purpose of these purchases is to increase lending by these institutions, it is not a requirement. Indeed, these companies are arguably free to spend these funds, or existing funds freed by the federal cash infusion, for any purpose, including payment of bonuses and extravagant compensation earned during the period preceding the bailout.
I believe that the American taxpayers who have provided this subsidy have legitimate concerns about how those companies will use those funds, what happened to require them to need those funds, and what they will be doing differently in the future to ensure that they will not need more assistance. Furthermore, this matter requires the urgent attention of the Committee, since the recipients of the federal monies can be expected to commit those funds immediately.
In view of the urgent nature of this matter, I will commit the resources of my subcommittee to follow the lead of the Full Committee in this investigation and assist in any way requested. I suggest that the Committee begin by requesting the following information from each of the 11 companies participating in Treasury's Capital Purchase program (Bank of America; Citigroup; J.P. Morgan Chase; Wells Fargo; Morgan Stanley; Goldman, Sachs; Merrill Lynch; Bank of New York Mellon; State Street; City National, and Key Bank):
1. A breakdown of the total annual compensation paid since 2003 through the present, including plans to pay compensation and bonuses in the near future for performance prior to the capital purchase; to each employee whose total annual income exceeded $500,000. They should be asked to name the top five executives and break down their compensation packages. (They should include executive level employees who are no longer employed by the company). They should be asked to aggregate figures for the remaining individuals receiving over $500,000, by placing them into the following groups: over $1,000,000, between $750,000 and $999,999, and between $500,000 and $749,999. Total annual compensation should mean: salary, bonus, other compensation, the value of restricted stock awards, long-term incentive payouts and the value of stock option awards in the fiscal year. Other compensation includes perquisites and other personal benefits; amounts accrued pursuant to a termination or change in control plan; annual company contributions to vested and unvested pension plans; the dollar value of any insurance premiums paid by the company with respect to life insurance for the benefit of an employee; gross-ups or other reimbursements for taxes; and discounted securities purchases.
2. A description of any policies in place that dictate the circumstances in which the company will seek to recoup, "clawback", compensation paid to employees in the event of a significant restatement of financial results or significant extraordinary write-off. If the company has entered into indemnification agreements or purchased insurance on behalf of certain employees to shield them from personal losses resulting from clawback obligations, they should be asked to explain the terms of such agreements or policies; limits, if any, on the amount that may be reimbursed to the company on behalf of the employment; the applicable standard of conduct that will override the agreement or insurance; and each individual who is covered by such agreements or insurance.
3. An itemized list of all government funds they have received since January 1, 2007 through Treasury programs. the anticipated benefit they expect to recognize as a result of the tax change enacted in Section 301 of the Emergency Economic Stabilization Act of 2008, participation in any Federal Reserve liquidity facility created after January 1, 2008, interest payments they have received from the Federal Reserve, and loans they have received to purchase assets from pooled investment vehicles under their control.
4. A list of the types of collateral they have pledged to each of these facilities and the value they received in exchange, if their institution has accessed any of the primary dealer credit facilities. They should indicate the aggregate value they have received each month in exchange for each type of collateral including treasury securities, agency securities, AAA-rated mortgage-backed, AAA-rated asset-backed securities, investment grade corporate securities, investment grade municipal securities, investment grade mortgage-backed securities, and investment grade asset-backed securities.
5. A list of every party who has purchased more than $50 million of impaired assets from their organization in the past 24 months and any financing they have provided.
6. An explanation of why the institutions participating in the Capital Purchase program need government aid. They should describe their business strategy going forward and how it differs from the strategy that has made it necessary for them to accept government aid.
7. A description of the organization's risk management procedures before they received government aid and the improvements they have made in light of the consequences to their organization of the financial crisis.
This would be a logical extension of the recent oversight conducted by the Full Committee on executive compensation and key actors in the financial crisis.
Sincerely,
Dennis J. Kucinich
Chairman
Domestic Policy Subcommittee
Enclosure
cc: Darrell Issa
Ranking Minority Member
Dennis Kucinich is an American politician. A U.S. Representative from Ohio from 1997 to 2013, he was also a candidate for the Democratic nomination for president of the United States in 2004 and 2008.
LATEST NEWS
Joe Lieberman, Iraq War Cheerleader and Killer of Public Option, Dead at 82
"Joe Lieberman's legacy will live on as your medical debt."
Mar 27, 2024
While current and former officials across the U.S. political spectrum shared praise for and fond memories of former Sen. Joe Lieberman in response to news of his death on Wednesday, critics highlighted how some of his key positions led to the deaths of many others.
Lieberman's family said the 82-year-old died at NewYork-Presbyterian Hospital after a fall at his home in the Bronx. He served in the Connecticut Senate, as the state's attorney general, and in the U.S. Senate—initially as a Democrat and eventually as an Independent. He was also Democratic former Vice President Al Gore's running mate in the 2000 presidential election.
"Up until the very end, Joe Lieberman enjoyed the high-quality, government-financed healthcare that he worked diligently to deny the rest of us. That's his legacy," said Melanie D'Arrigo, executive director of the Campaign for New York Health, which advocates for universal, single-payer healthcare.
As Warren Gunnels, majority staff director for Senate Health, Education, Labor, and Pensions Committee Chair Bernie Sanders (I-Vt.),
explained, "Joe Lieberman led the effort to ensure the Affordable Care Act did not include a public option or a reduction in the Medicare eligibility age to 55."
Noting that Lieberman also lied about the presence of weapons of mass destruction (WMDs) in Iraq—which was used to justify the 2003 U.S. invasion—Gunnels asked, "How many people unnecessarily died as a result?"
He was far from alone in highlighting the two defining positions.
The Lever's David Sirota declared, "RIP Joe Lieberman, Iraq War cheerleader who led the fight to make sure Medicare was not extended to millions of Americans who desperately needed the kind of healthcare coverage he enjoyed in the Senate."
The Debt Collective said on social media that "Joe Lieberman killed so many people when he killed the public option. Not to mention all the people he killed by cheerleading every war and every lie that led to war. A truly horrible person with a shameful legacy."
Journalist Jon Schwarz pointed out that Lieberman continued to lie about the WMDs long after the claims were debunked.
FormerMSNBC host Mehdi Hasan noted that Lieberman declined an opportunity to apologize for the disastrous war, sharing a clip from his on-camera interview with the ex-senator in 2021.
And please don\u2019t give me this \u2018don\u2019t speak ill of the dead\u2019 stuff - 1) I\u2019m not speaking ill, I\u2019m stating facts, and 2) public figures are public figures, and their obits reflect their legacies and so we should be honest in our accounts of their legacies. Not offensive but honest— (@)
"We lost a giant today. I often disagreed with Joe Lieberman but he was always honorable in the way he called for American troops to murder people abroad so he could get his jollies," said Matt Stoller of the American Economic Liberties Project in a series of sarcastic social media posts.
"Joe Lieberman balanced his love of other people fighting in immoral wars with a commitment to preventing Americans from getting healthcare," Stoller added. "Even after his Senate career, he showed his strong democratic values by lobbying for Chinese telecom firms. We will miss this man."
Keep ReadingShow Less
'Enough Is Enough': Ireland Joins ICJ Genocide Case Against Israel
"What we saw on October 7 in Israel, and what we are seeing in Gaza now, represents the blatant violation of international humanitarian law on a mass scale," said one top Irish official.
Mar 27, 2024
Citing Israel's "blatant" human rights violations in Gaza, Ireland's second-highest-ranking official said Wednesday that the country will join the South Africa-led genocide case before the International Court of Justice in The Hague.
Irish Tánaiste Micheál Martin—the equivalent of a deputy prime minister in other parliamentary nations—said that Ireland decided to intervene in the case after analyzing the "legal and policy issues" pertaining to the case under review by the United Nations' top court.
"It is for the court to determine whether genocide is being committed," Martin—who also serves as Ireland's foreign and defense minister—said in a statement. "But I want to be clear in reiterating what I have said many times in the last few months; what we saw on October 7 in Israel, and what we are seeing in Gaza now, represents the blatant violation of international humanitarian law on a mass scale."
Martin continued:
The taking of hostages. The purposeful withholding of humanitarian assistance to civilians. The targeting of civilians and of civilian infrastructure. The indiscriminate use of explosive weapons in populated areas. The use of civilian objects for military purposes. The collective punishment of an entire population.
The list goes on. It has to stop. The view of the international community is clear. Enough is enough. The U.N. Security Council has demanded an immediate cease-fire, the unconditional release of hostages, and the lifting of all barriers to the provision of humanitarian assistance at scale. The European Council has echoed this call.
South Africa's case—which is supported by over 30 countries, the Arab League, African Union, and others—incisively details Israel's conduct in the war, including the killing of tens of thousands of Palestinians, mostly women and children; the wounding of tens of thousands more; the forcible displacement of 90% of the besieged enclave's 2.3 million people; and the inflicting of conditions leading to widespread starvation and disease. The filing also cited numerous genocidal statements by Israeli officials.
On January 26, the ICJ issued a preliminary ruling that Israel is plausibly committing genocide in Gaza and ordered its government and military to prevent genocidal acts. Palestinian and international human rights defenders say Israel has ignored the order.
A draft report
released this week by the U.N.'s Human Rights Council found "reasonable grounds to believe" that Israel is committing genocide in Gaza, a move that came on the same day as the U.N. Security Council passed a resolution demanding an immediate cease-fire in the ongoing war.
"The situation could not be more stark; half the population of Gaza face imminent famine and 100% of the population face acute food insecurity," said Martin. "As the U.N. secretary-general said as he inspected long lines of blocked relief trucks waiting to enter Gaza during his visit to Rafah at the weekend: 'It is time to truly flood Gaza with lifesaving aid. The choice is clear: surge or starvation.' I echo his words today."
In a St. Partick's Day White House meeting with U.S. President Joe Biden—a staunch supporter of Israel—Irish Toaiseach (Prime Minister) Leo Varadkar, who announced earlier this month that he would soon step down, said that "the Irish people are deeply troubled about the catastrophe that's unfolding before our eyes in Gaza."
"And when I travel the world, leaders often ask me why the Irish have such empathy for the Palestinian people," he added. "And the answer is simple: We see our history in their eyes—a story of displacement, of dispossession and national identity questioned and denied, forced emigration, discrimination, and now hunger."
Keep ReadingShow Less
House Democrat Calls GOP Budget a 'Blueprint for a Dystopian Hellscape'
Rep. Don Beyer warns the plan "would see unbridled benefits flowing to a wealthy and well-connected few while tens of millions of Americans lose healthcare, housing, retirement security, and food security."
Mar 27, 2024
As Republicans on Wednesday set their sights on a key seat opening up in the U.S. House of Representatives, the chamber's senior Democrat on the congressional Joint Economic Committee put out a blistering takedown of a top GOP budget proposal for the next fiscal year.
Congressman Don Beyer (D-Va.) took aim at the 180-page "Fiscal Sanity to Save America" plan released last week by the Republican Study Committee (RSC)—which includes about 80% of GOP House members—following proposals from Democratic President Joe Biden and House Budget Committee Chair Jodey Arrington (R-Texas).
"The Republican Study Committee budget is a blueprint for a dystopian hellscape," he warned. "The vision offered by this group, which counts 4 in 5 House Republicans as members, would see unbridled benefits flowing to a wealthy and well-connected few while tens of millions of Americans lose healthcare, housing, retirement security, and food security."
RSC proposals to "dramatically weaken healthcare," Beyer noted, include turning Medicare into a voucher plan and rolling back Inflation Reduction Act (IRA) provisions that cut costs for seniors; repealing tax subsidies for the Affordable Care Act and the law's protections for people with preexisting conditions; and transforming Medicaid and the Children's Health Insurance Program into block grants to states.
As Common Dreams has reported, in addition to seeking cuts to Medicare and Social Security—while claiming to do nothing of the sort—the RSC has also launched a full-fledged assault on reproductive healthcare and rights, promoting 42 bills that would ban abortions after 15 weeks or even earlier, require unnecessary ultrasounds and 24-hour waiting periods, prohibit the use of fetal stem cells for research, and threaten access to in vitro fertilization, among other restrictions.
In addition to attacking reproductive freedom and key programs for seniors and low-income families, Beyer highlighted, the RSC wants to "weaken public health, public safety, and environmental protections," while "cutting taxes for the wealthy, by a lot."
The RSC advocates ending green tax credits from the IRA and Infrastructure Investment and Jobs Act as well as slashing money for Community Oriented Policing Services and the Bipartisan Safer Communities Act. The committee also calls for permanently lowering taxes for the ultrarich, indexing capital gains taxes to inflation, repealing the estate tax, rolling back the IRA's corporate alternative minimum tax, and eliminating funding intended to help the Internal Revenue Service catch wealthy tax cheats.
"Democrats believe there is a better way to get our fiscal house in order without betraying our values," said Beyer. "That starts with making smart investments in our people and our future while demanding that the rich and large corporations pay their fair share in taxes. The contrast between the Democratic approach and this Republican budget could not possibly be clearer."
Biden's budget blueprint—released as he prepares for an electoral rematch against former Republican President Donald Trump, who infamously cut taxes for rich people and corporations—proposes a 25% minimum tax for individuals with wealth of more than $100 million, along with ending capital income tax breaks and closing other loopholes.
Polling results released Tuesday by Morning Consult show that a majority of voters across party lines in key swing states support raising taxes on people who make more than $400,000 per year.
Biden and the divided Congress this past weekend narrowly avoided a government shutdown by passing a long-delayed spending package. Fiscal year 2025 is set to begin in October, setting up another election-year fight over funding.
In what's been
dubbed the "Great Resignation," a growing number of House Republicans have announced that they are not seeking reelection or even exited their seats early—shrinking the party's already slim majority in the lower chamber.
Keep ReadingShow Less
Most Popular