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
UN Chief Warns of Israel's Syria Invasion and Land Seizures
United Nations Secretary-General António Guterres stressed the "urgent need" for Israel to "de-escalate violence on all fronts."
Dec 12, 2024
United Nations Secretary-General António Guterres said Thursday that he is "deeply concerned" by Israel's "recent and extensive violations of Syria's sovereignty and territorial integrity," including a ground invasion and airstrikes carried out by the Israel Defense Forces in the war-torn Mideastern nation.
Guterres "is particularly concerned over the hundreds of Israeli airstrikes on several locations in Syria" and has stressed the "urgent need to de-escalate violence on all fronts throughout the country," said U.N. spokesperson Stephane Dujarric.
Israel claims its invasion and bombardment of Syria—which come as the United States and Turkey have also violated Syrian sovereignty with air and ground attacks—are meant to create a security buffer along the countries' shared border in the wake of last week's fall of former Syrian President Bashar al-Assad and amid the IDF's ongoing assault on Gaza, which has killed or wounded more than 162,000 Palestinians and is the subject of an International Court of Justice genocide case.
While Israel argues that its invasion of Syria does not violate a 1974 armistice agreement between the two countries because the Assad dynasty no longer rules the neighboring nation, Dujarric said Guterres maintains that Israel must uphold its obligations under the deal, "including by ending all unauthorized presence in the area of separation and refraining from any action that would undermine the cease-fire and stability in Golan."
Israel conquered the western two-thirds of the Golan Heights in 1967 and has illegally occupied it ever since, annexing the seized lands in 1981.
Other countries including France, Russia, and Saudi Arabia have criticized Israel's invasion, while the United States defended the move.
"The Syrian army abandoned its positions in the area... which potentially creates a vacuum that could have been filled by terrorist organizations," U.S. State Department spokesperson Matthew Miller said at a press briefing earlier this week. "Israel has said that these actions are temporary to defend its borders. These are not permanent actions... We support all sides upholding the 1974 disengagement agreement."
Keep ReadingShow Less
Sanders Says 'Political Movement,' Not Murder, Is the Path to Medicare for All
"Killing people is not the way we're going to reform our healthcare system," he said. "The way we're going to reform our healthcare system is having people come together."
Dec 12, 2024
Addressing the assassination of UnitedHealthcare CEO Brian Thompson and conversations it has sparked about the country's for-profit system, longtime Medicare for All advocate Sen. Bernie Sanders on Wednesday condemned the murder and stressed that getting to universal coverage will require a movement challenging corporate money in politics.
"Look, when we talk about the healthcare crisis, in my view, and I think the view of a majority of Americans, the current system is broken, it is dysfunctional, it is cruel, and it is wildly inefficient—far too expensive," said Sanders (I-Vt.), whose position is backed up by various polls.
"The reason we have not joined virtually every other major country on Earth in guaranteeing healthcare to all people as a human right is the political power and financial power of the insurance industry and drug companies," he told Jacobin. "It will take a political revolution in this country to get Congress to say, 'You know what, we're here to represent ordinary people, to provide quality care to ordinary people as a human right,' and not to worry about the profits of insurance and drug companies."
Asked about Thompson's alleged killer—26-year-old Luigi Mangione, whose reported manifesto railed against the nation's expensive healthcare system and low life expectancy—Sanders said: "You don't kill people. It's abhorrent. I condemn it wholeheartedly. It was a terrible act. But what it did show online is that many, many people are furious at the health insurance companies who make huge profits denying them and their families the healthcare that they desperately need."
"What you're seeing, the outpouring of anger at the insurance companies, is a reflection of how people feel about the current healthcare system."
"What you're seeing, the outpouring of anger at the insurance companies, is a reflection of how people feel about the current healthcare system," he continued, noting the tens of thousands of Americans who die each year because they can't get to a doctor.
"Killing people is not the way we're going to reform our healthcare system," Sanders added. "The way we're going to reform our healthcare system is having people come together and understanding that it is the right of every American to be able to walk into a doctor's office when they need to and not have to take out their wallet."
"The way we're going to bring about the kind of fundamental changes we need in healthcare is, in fact, by a political movement which understands the government has got to represent all of us, not just the 1%," the senator told Jacobin.
The 83-year-old Vermonter, who was just reelected to what he says is likely his last six-year term, is an Independent but caucuses with Democrats and sought their presidential nomination in 2016 and 2020. He has urged the Democratic Party to recognize why some working-class voters have abandoned it since Republicans won the White House and both chambers of Congress last month. A refusal to take on insurance and drug companies and overhaul the healthcare system, he argues, is one reason.
Sanders—one of the few members of Congress who regularly talks about Medicare for All—isn't alone in suggesting that unsympathetic responses to Thompson's murder can be explained by a privatized healthcare system that fails so many people.
In addition to highlighting Sanders' interview on social media, Congressman Ro Khanna (D-Calif.) pointed out to Business Insider on Wednesday that "you've got thousands of people that are sharing their stories of frustration" in the wake of Thompson's death.
Khanna—a co-sponsor of the Medicare for All Act, led in the House of Representatives by Congressional Progressive Caucus Chair Pramila Jayapal (D-Wash.)—made the case that you can recognize those stories without accepting the assassination.
"You condemn the murder of an insurance executive who was a father of two kids," he said. "At the same time, you say there's obviously an outpouring behavior of people whose claims are being denied, and we need to reform the system."
Two other Medicare for All advocates, Reps. Maxwell Frost (D-Fla.) and Alexandria Ocasio-Cortez (D-N.Y.), also made clear to Business Insider that they oppose Thompson's murder but understand some of the responses to it.
"Of course, we don't want to see the chaos that vigilantism presents," said Ocasio-Cortez. "We also don't want to see the extreme suffering that millions of Americans confront when your life changes overnight from a horrific diagnosis, and people are led to just some of the worst, not just health events, but the worst financial events of their and their family's lives."
Sen. Elizabeth Warren (D-Mass.)—a co-sponsor of Sanders' Medicare for All Act—similarly toldHuffPost in a Tuesday interview, "The visceral response from people across this country who feel cheated, ripped off, and threatened by the vile practices of their insurance companies should be a warning to everyone in the healthcare system."
"Violence is never the answer, but people can be pushed only so far," she continued. "This is a warning that if you push people hard enough, they lose faith in the ability of their government to make change, lose faith in the ability of the people who are providing the healthcare to make change, and start to take matters into their own hands in ways that will ultimately be a threat to everyone."
After facing some criticism for those comments, Warren added Wednesday: "Violence is never the answer. Period... I should have been much clearer that there is never a justification for murder."
Keep ReadingShow Less
Reports Target Israeli Army for 'Unprecedented Massacre' of Gaza Journalists
"In Gaza, the scale of the tragedy is incomprehensible," wrote Thibaut Bruttin, director general of Reporters Without Borders.
Dec 12, 2024
Reports released this week from two organizations that advocate for journalists underscore just how deadly Gaza has become for media workers.
Reporters Without Borders' (RSF) 2024 roundup, which was published Thursday, found that at least 54 journalists were killed on the job or in connection with their work this year, and 18 of them were killed by Israeli armed forces (16 in Palestine, and two in Lebanon).
The organization has also filed four complaints with the International Criminal Court "for war crimes committed by the Israeli army against journalists," according to the roundup, which includes stats from January 1 through December 1.
"In Gaza, the scale of the tragedy is incomprehensible," wrote Thibaut Bruttin, director general of RSF, in the introduction to the report. Since October 2023, 145 journalists have been killed in Gaza, "including at least 35 who were very likely targeted or killed while working."
Bruttin added that "many of these reporters were clearly identifiable as journalists and protected by this status, yet they were shot or killed in Israeli strikes that blatantly disregarded international law. This was compounded by a deliberate media blackout and a block on foreign journalists entering the strip."
When counting the number of journalists killed by the Israeli army since October 2023 in both Gaza and Lebanon, the tally comes to 155—"an unprecedented massacre," according to the roundup.
Multiple journalists were also killed in Pakistan, Bangladesh, Mexico, Sudan, Myanmar, Colombia, and Ukraine, according to the report, and hundreds more were detained and are now behind bars in countries including Israel, China, and Russia.
Meanwhile, in a statement released Thursday, the International Federation of Journalists (IFJ) announced that at least 139 Palestinian journalists and media workers have been killed since the war in Gaza began in 2023, and in a statement released Wednesday, IFJ announced that 104 journalists had perished worldwide this year (which includes deaths from January 1 through December 10). IFJ's number for all of 2024 appears to be higher than RSF because RSF is only counting deaths that occurred "on the job or in connection with their work."
IFJ lists out each of the slain journalists in its 139 count, which includes the journalist Hamza Al-Dahdouh, the son of Al Jazeera's Gaza bureau chief, Wael Al-Dahdouh, who was killed with journalist Mustafa Thuraya when Israeli forces targeted their car while they were in northern Rafah in January 2024.
Keep ReadingShow Less
Most Popular