Posted on 06/04/2009 9:56:18 AM PDT by SeekAndFind
The Obama administration has used TARP participation by banks and other financial and private-sector companies to demand control over their business practices, noting that their voluntary acceptance of taxpayer funds allows the administration stakeholder rights. But how voluntary was the decision by banks to take the money? A new report from CNS and Judicial Watch shows that then-Treasury Secretary Henry Paulson told these institutions that if they didnt accept it voluntarily, the government would force them to take it, and that wasnt Obamas call:
Last October, then-Treasury Secretary Henry Paulson ordered nine banks that the Treasury Department described as healthy financial institutions to surrender ownership interests to the government or else face regulatory action that would force them to surrender ownership interests to the government, according to an internal Treasury Department document.
Paulsons extraordinary threat culminated in one of the most sweeping government intrusions into the free-enterprise system in the history of the United States.
Judicial Watch, a nonpartisan watchdog organization, used the Freedom of Information Act to obtain a copy of the internal Treasury Department talking points that were prepared for Paulson to use at his Oct. 13, 2008 meeting with the chief executive officers (CEOs) of the nine banks.
Did the banks have a choice? Not according to Paulsons talking points.
We dont believe it is tenable to opt out because doing so would leave you vulnerable and exposed, Paulson told the bankers, according to his talking points. If a capital infusion is not appealing, you should be aware that your regulator will require it in any circumstance.
We should point out that this action occurred under the authority of the Bush administration, if the timeline doesnt make that obvious. The nine banks that got this Paulson ultimatum did not come to the government, hat in hand, seeking taxpayer money. Paulson told them that they would take the money, and that the Bush administration would have regulators impose that condition on them by essentially misrepresenting their relative financial health.
But why? In a precursor to the Obama administrations own power grab, the Bush administration wanted to use the private sector to impose its own policies and pick its own winners. The Obama administration has merely picked up the tool left by Paulson.
These are the financial institutions that got the ultimatum:
* Citigroup
* JP Morgan
* Wells Fargo
* Merrill Lynch
* Morgan Stanley
* Goldman Sachs
* Bank of New York
* Bank of America
* State Street Bank
Some of these wanted to opt out of the TARP program earlier this year, notably Wells Fargo, Goldman Sachs, and JP Morgan. The Obama administration has thus far rebuffed those efforts, claiming that theyre not healthy enough to pay back the money. If they werent sick enough to need it in the first place, why cant they pay it back now? Simple: the Obama administration likes this tool, and doesnt want to surrender its leverage until theyre finished overhauling the American economic system to their liking.
Both Bush and Obama, Paulson and Geitner, we are screwed
More fuel to the conspiracy fodder that someone else is running this country
Now that republicans are the same as democrats, we can just vote on appearances.
Which ever guy has the best hair should win.
I bet it's George Soros LOL
I would say that big corporations are running it AND contrary to popular conservative and liberal opinions, big corporations are big government socialists and vice versa.
Remember the liberal crackpot theory that the US and Israel staged the 9/11 attacks? (to invade Iraq of course) Well some of our conservative buddies came up with ‘George Soros drove up the price of gas, then pulled all the money out of the banks Sept 2008’ (hey, both in September!!) to get Obama elected. I have heard that one floated around a bit here and by republicans.
I really don't think this is true. Frankly, Bush was an absolute idiot when it came to these economic matters. He didn't have a clue what was going on. Paulson came to him and said: "We have an emergency, and we need to do this and this by next week, or the economy will collapse and it will be too late."
That's partly speculatin, of course. But we DO know that Paulson was in constant touch with OBAMA while this was going down, before the emergency meeting at the White House. And we do know that Paulson refused to return McCain's anxious phone calls as he asked to be put into the loop.
At the White House meeting Pelosi and Reid, also in the loop, basically put Obama in charge of the meeting. McCain sat there with his mouth open, and so did Bush.
Paulson was not working for Bush or for our country. He was working for Goldman Sachs and the politicians who brought the crisis on. The two largest recipients of Goldman Sachs donations in 2008 were Chris Dodd, head of the Finance Committee, and a very junior senator--Obama.
In other words the Dems were running the show, and Obama was in on it even before he won the election. Bush was nothing but a patsy.
I also happen to know from inside information that other banks were also FORCED to take TARP loans by Paulson. Not just those big banks but at least some of the smaller ones. They were given a choice: "Take the money, or suffer the displeasure of the Treasury Department." No way that a bank could survive that in these troubled times. The Treasury Department and its allies have many ways of destroying them.
“I would say that big corporations are running it AND contrary to popular conservative and liberal opinions, big corporations are big government socialists and vice versa.”
Many people will automatically assume the CEO of a big business is a capitalist. Not so, many are ardent socialists and believe in keeping the little people under control.
The "timeline" clearly shows that this threat was leveled at the banks at the very END of the Bush administration, so he would have gained absolutely NOTHING by it. Why would he have begun such an audacious power grab in the last months of his administration, knowing it would take time to come to fruition and thus go to his successor?
I believe the truth is revealed in the understanding, proven by subsequent events, that the Obama team started early to get things rolling. They know, and have known, that they have to pack just as much radical change and as much power-grabbing as possible in the shortest time-frame possible.
I should also add that the TARP meeting at the White House was deliberately planned as an October Surprise. The whole country was deliberately thrown into crisis by what was made to appear as a sudden crisis, although the situation had been known to those involved months and even years earlier.
In other words, one of the chief purposes of the meeting was to show up McCain and Bush and elect Obama. Which is exactly what happened. Obama was prepared, his speeches were written, his debating points were already set. McCain was running around like a caged squirrel trying to figure out what was going on.
This is old news....
C’mon, we all know the Bush Administration did no wrong during his 8 years... /sarc
Good points, very hard for a lame duck to stop something like this. Paulson is a good socialist sucking up to the new boss.
Plus corporations can control government and vice versa, they can work together against us. Small businesses are not controllable, nor can they influence. They are more like us.
Sadly, most of our our elected republicans now are big government, big business ,socialists as is GWB. FNC Special Report round table panelists all seem to be that too believing in Washington power, they were with GWB on Amnesty and TARP.
You nailed it.
Bush does bear part of the blame for TARP and the ensuing mess, but it stems from being ignorant and credulous of his advisors, not malicious. Obambi, on the other hand...
The buck either stops with the President, or it doesn’t.
Oversimplifying does make judgment easier, doesn't it?
“I also happen to know from inside information that other banks were also FORCED to take TARP loans by Paulson”
I know it too. And Northern Trust was one of them. They’ve tried to return the money too.
The truth is easy, glossing over it isn’t.
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