Congress gets very upset when TARP bailout money goes to corporate employee bonuses, corporate jet rides, and corporate golf tournaments.
What Congress doesn't get so very upset about is when TARP bailout money goes to Congress, in the form of campaign contributions.
In recent filings with the Federal Election Commission, the political action committee for Bank of America (which got $15 billion in bailout money) sent out $24,500 in the first two months of 2009, including $1,500 to House Majority Leader Steny Hoyer and another $15,000 to members of the House and Senate banking panels. Citigroup ($25 billion) dished out $29,620, including $2,500 to House GOPWhip Eric Cantor, who also got $10,000 from UBS which, while not a TARP recipient, got $5 billion in bailout funds as an AIG "counterparty." "This certainly appears to be a case of TARP funds being recycled into campaign contributions," says Brett Kappell, a D.C. lawyer who tracks donations. (A spokesman for Cantor did not respond to requests for comment. A spokeswoman for Hoyer said it's his "policy to accept legal contributions.")
In addition, TARP fund recipients paid $114 million in political contributions and lobbying efforts in 2008.
Some of the top recipients of contributions from companies receiving TARP money are the same members of Congress who chair committees charged with regulating the financial sector and overseeing the effectiveness of this unprecedented government program. They include Sen. Chris Dodd of Connecticut, chairman of the Senate Committee on Banking, Housing and Urban Affairs (he received $854,200 from the companies in the 2008 election cycle, including money to his presidential campaign) and Sen. Max Baucus of Montana, chair of the Senate Finance Committee (he received $279,000). In total, members of the Senate Committee on Banking, Housing and Urban Affairs, Senate Finance Committee and House Financial Services Committee received $5.2 million from TARP recipients in the 2007-2008 election cycle. President Obama collected at least $4.3 million from employees at these companies for his presidential campaign.
The companies making the biggest political donations just so happened to be the same companies that received the largest TARP bailouts. What a coincidence.
The companies giving the most to fund lawmakers' campaigns and spending the most on lobbying efforts were also those that received the most TARP money to help them stay afloat. This includes General Motors, which spent $15 million between campaign contributions and lobbying expenditures and got $10.4 billion (more than all other companies), Bank of America (and the investment company it bought last year, Merrill Lynch), which spent $14.5 million to play politics and received $45 billion from the bailout bill; and American International Group (AIG), which spent $10.6 million and was paid out $40 billion. Citigroup was also one of the largest spenders to see a big result: between lobbying expenditures and campaign contributions, the company spent $12.5 million and got $50 billion.
For a complete list of TARP recipients that spent money on campaign contributions and lobbying, see the above link.
While I'm sure all our congressional members have the very highest ethical standards (LOL. Sometimes I crack myself up), this information makes it look like taxpayer dollars were for sale to the highest bidder.
Just like always.
Maybe the campaign contributions made these companies too big to fail.
FYI – Bank of America, receiver of $45 billion in TARP funds, MADE A PROFIT in 2008. So did Goldman Sachs. So did Morgan Stanley. Hmmm. Citigroup lost a lot of money in 2008, but over the last five years, has made a five year net profit of about $39 billion. All these companies made a bundle if you look back beyond the fourth quarter of 2008. They all made HUGE profits for years prior.
Get the picture ? These companies are not only to big to fail, they're too big to suffer even a one quarter loss before the government takes money from us peons to prop up the earnings statements of the big boys.
THEY are too big for the government to let fail. WE are too small for the government to give a damn about.
{ 5 comments… read them below or add one }
I am well aware, after 8 weeks in office, of the terrible failures of the Obama administration in not fixing ALL of America's problems.
What in the heck is taking him so long?
Campaign financing is, like contractual bonuses, LEGAL.
Perhaps, Obama should have made campaign finance his number one concern. Then, you could write about the Obama Depression.
After 30 years of total neglect, our nation faces HUGE systemic problems. I can't, for the life of me, figure out why Obama hasn't solved all these problems in 60 days.
Yes, Rev, campaign financing is legal. So were credit default swaps and subprime mortgages. By your measure, I guess those things aren't a problem either.
And why are you defending Obama here ? I barely mentioned him in this post, and most of the TARP funds were disbursed by the Bush administration.
But since you brought Obama up, he was the one who broke his word about public campaign financing during the presidential election, adding to his already long list of lies and broken campaign promises.
Mr. King,
The truly tragic thing is that these things are all legal. Our campaign financing practically mandates that candidates remain beholden to the moneyed class. It is how this worthless paper was created, and it guarantees that the underlining causes will not be addressed, let alone remedied.
frank,
Absolutely. Look at the subprime crisis. Subprimes were legislated into existence in 1980 when the federal government repealed state usury laws (the Monetary Control Act). Before that, subprime mortgages were illegal. You know that was driven by both politics and big money interests, as was all the other legislation that resulted in this financial meltdown.
Our political system has turned into a game of 'reward your constituencies.' Both parties. The taxpayer bears the ever increasing burden. I don't think America can function like this much longer. We've gone from the biggest lender nation to the biggest borrower nation, with no end in sight.
Mr. King,
The main thing that needs to be done to get this country to function properly is to take money out of politics.