Kucinich Continues Investigation of Bail-Out Bonuses
Requests Full Committee Resources to be Used
WASHINGTON, D.C. (October 28, 2008) -- 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
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.