Demanding an End to Fed Secrecy, Sanders Questions Bonuses at Goldman Sachs and Other Big Banks

Stepping up a campaign for Federal Reserve
accountability, Sen. Bernie Sanders (I-Vt.) today questioned whether
some of more than $2.2 trillion in secret subsidies went to Goldman
Sachs and other bailed-out banks now planning to shower executives
with huge bonuses.

Sanders voiced his concern in a letter to Fed Chairman Ben Bernanke
and Treasury Secretary Timothy F. Geithner and during remarks at an
Economic Policy Institute conference.

Goldman Sachs yesterday reported that its profits surged on
second-quarter income of $3.44 billion. The turnaround came less than
a year after reckless investments by Goldman and other Wall Street
firms triggered a worldwide recession and drove many rivals out of
business.

With the good times rolling again on Wall Street, Goldman repaid its
$10 billion taxpayer bailout and now plans to dole out the biggest
bonuses in its 140-year history. The investment bank reportedly plans
to pay as much as $20 billion this year in bonuses and other
compensation, about $700,000 per employee. Goldman is one of 10 big
banks that announced plans to return bailout funds so they could evade
restrictions on executive compensation and bonuses.

"The question I have is how do we know that right after Goldman and
other banks pay back billions to the Treasury, the Federal Reserve
doesn't turn around and provide them with billions more with no
strings attached?" Sanders asked. "The answer is that we don't know.
Ben Bernanke refuses to say."

In a keynote speech at an Economic Policy Institute conference,
Sanders argued that any firm that received a taxpayer bailout through
the Troubled Asset Relief Program or the Federal Reserve should be
subject to strict limits on compensation and should not be rewarding
bonuses to senior executives.

The Senate in April approved 59 to 39 an amendment by Sanders calling
on the Fed to disclose the names of all of the institutions that
received more than $2.2 trillion in taxpayer assistance, how much each
received and what they are doing with this money. The amendment was
included in the final version of the Budget Resolution.

Sanders also is the chief sponsor of legislation to require the Fed to
name the financial institutions that have received what could total
more than $7 trillion in loans and loan guarantees. A separate Sanders
bill would require the Government Accountability Office to conduct a
comprehensive and independent audit of the Federal Reserve. It now has
13 cosponsors, including Sens. Russ Feingold (D-Wis.), John McCain
(R-Ariz), Blance Lincoln (D-Ark.) and John Barrasso (R-Wy.). Rep.
Ron Paul (R-Texas) has introduced an identical bill in the House. It
now has 261 cosponsors, including 85 Democrats.

"Chairman Bernanke and the Federal Reserve have got to understand that
this money does not belong to the Federal Reserve. It belongs to the
American people," Sanders said. "As long as the Federal Reserve is
allowed to keep the information on their loans secret, we will never
know the true financial condition of the banking system."