Conservative senator: Paulson may have given bailout money to friends

[babylonsister]

http://www.afterdowningstreet.org/node/37742

Conservative senator: Paulson may have given bailout money to friends
Submitted by davidswanson on Mon, 2008-11-17 16:56.

By Muriel Kane, Raw Story


Sen. James Inhofe (R-OK) is making waves by criticizing Treasury Secretary Paulson's handling of the bailout and saying that Congress should take back whatever is left of the $700 billion "blank check" it issued to the Bush administration in October.

In a letter posted on his website, Inhofe told his Senate colleagues that he intends to push for immediate legislation that would require Congressional authorization for any further payouts.

The ultra-conservative Oklahoma Republican told the Tulsa World, "It is just outrageous that the American people don't know that Congress doesn't know how much money {Paulson} has given away to anyone. ... It could be to his friends. It could be to anybody else. We don't know. There is no way of knowing. ... He was able to get this authority from Congress predicated on what he was going to do, and then he didn't do it."

Paulson is a former CEO of the giant investment banking firm Goldman Sachs, which is assumed to be a primary beneficiary of the bailout plan. ThinkProgress warned in September, "The conflict of interest provides all the more reason for the bailout legislation in Congress to have more stringent oversight that the administration opposes."

Inhofe notes that he himself was also skeptical about the bailout from the start. "I have learned a long time ago," he said, "when they come up and say this has to be done and has to be done immediately, there is no other way of doing it, you have to sit back and take a deep breath and nine times out of 10 they are not telling the truth. And this is one of those nine times."

The Bible-citing, anti-gay Inhofe has been known primarily as an over-the-top global warming denier and supporter of so-called "enhanced interrogation," and his opposition to the Bush administration on the bailout brings him some strange bedfellows. On Monday, blogger Atrios quoted Inhofe's comments about Paulson under the heading, "That's crazy talk. Only insane liberal bloggers say stuff like this."

[truedelphi]

1. Any of us lucky enough to see the Congressional hearing on C SPAN last Friday

Know that both Congressional Leaders Kucinich-D and Issa-R agree with Inhofe-R.

Paulson is ignoring the key provision of the BailOut Bill, Section 109, and instead is declaring that certain portions of the monies from us taxpayers must go to certain banks.

The questioning by Kucinich and Issa was very fierce and included a blistering discussion of just how it is that one bank is deemed more worthy than another, and then the "worthy" bank is given more funds than one would assume it would need to buy out a "worthless" bank.

Three hundred and fifty BILLION dollars have already been spent!! ANd it appears that Paulson will soon be asking for the remaining Three Hundred Fifty BILLION.

As far as I am concerned - all of this makes sense. (Sorry for my cynicism)

AIG is allowed to give Christmas bonuses to its executives that will total over 300 million. If we look to the DeLay handbook of how this works, these bonuses will be allowed, because how else can AIG officials petition Paulson for yet more money unless they are able to slip him some money under the table??

Same thing is probably occurring with the banks. Wachovia was handed over to the very poorly managed Citigroup - not because Citigroup is higher rated than Wells Fargo, but because Citigroup has an in with Treasury. And that is the kind of "in" that only money can buy!!

And Obama is already saying "Good job, Brownie!" When "Sixty Minutes" asks him about Paulson!!

[babylonsister]

2. Speaking of Citigroup, more mass layoffs today...

http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=389&topic_id=4478999&mesg_id=4479047

As for PE Obama, he must be aware of what's going on. I'm hoping he's keeping his cards close to his vest and actually has a plan.

[truedelphi]

3. He needs to forget about holding his cards close to his vest

And start pounding his shoes on the table.

Unless someone wakes up the American people, and soon, the next half of the BailOut Bill will be offered to Paulson and Kashkari. Like this week or next week, or maybe just as Congress hungers to go on Holiday break at Christmas.

There won't be more money for more Bailouts. This last round of funding means that every man woman and child will end up paying the tall order of $ 10,000 to the likes of AIG and also the bank executive that took over Kucinich's hometown bank. This is not money that will ever trickle down. It is simply money going to the liars and crooks, to fund deals that are not in our best interests. And we need it stopped today. Next week will be too late.

If you think I am nuts, read today's post here at DU about how banks with money are now grabbing up water rights all over the country. So the same bank that recieved BailOut funds last week is not gonna give your family a car loan, but WILL BUY UP the water utility in your hometown so you can start struggling with over-inflated water bills in addition to everything else.

[babylonsister]

5. I don't think you're nuts, but did you read this from today?

This is up at TPM, too.

Edit to add: Sounds like PE Obama is going to be damned if he does, damned if he doesn't. That's a sucky position to be in.


http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=102x3605850

Bush may let Obama decide part of bailout (Administration may leave half of $700 billion untouched)

Source: MSNBC

WASHINGTON - The Bush administration has told top lawmakers it does not plan to use at least half of the $700 billion bailout fund that Congress approved this fall to aid the financial industry, congressional officials said Monday.

These officials said Treasury Secretary Henry Paulson passed the word over the weekend that he intends to leave $350 billion untouched when the administration leaves office on Jan. 20. That would mean the incoming Obama administration would decide whether and how the funds should be spent.

The disclosure comes at a time when Democrats are working to pass emergency legislation to spend $25 billion of the bailout money to provide loans to the battered auto industry.

These officials spoke on condition of anonymity, saying they were not authorized to disclose the developments.

White House spokesman Tony Fratto neither confirmed nor disputed their account, adding that any decision about the use of the remaining $350 billion was up to Paulson.

Read more: http://www.msnbc.msn.com/id/27770950 /


Here you go President Obama! The mess is all yours!

And pardon me for being cynical, but I think this is only the latest sign that Bush, Pulson, et al, know that this bailout won't work no matter what they do. If they leave the rest of the spending up to Obama, they will then try to blame its failure on him.

[truedelphi]

14. But the BailOut is WORKING, Babylon. It is doing exactly what they intended

Just as the Powers that Be intended to turn Iraq into a Chaotic Mess that offers their war profiteer buddies oodles of money, so too has this unsupervised handover of our Treasury gone exactly according to plan.

And Obama, not being the best of the group that we had as our choices, is not quite up to par with playing with the Big Boys. By the time he figures it out, the money will be gone.

COMEX is already in deep doo-doo. Wait till December and the story will be the only one that the media will be talking about.

And then those who criticize us early critics will realize we only criticized because we truly wanted Obama to wake up before the Media begins holding HIM accountable. If Kucinich, Issa and others can understand what chumps Treasury is playing our COngress and President elect for, the President Elect should understand that also.

[clear eye]

17. That would actually be a very good thing, but

I worry that this might just be Paulson sending out feelers to Obama to keep him on in his post. Paulson leaking both that he plans to start using the rest of the money soon, and that he'll leave it for the Obama administration, sounds an awful lot like hardball negotiating to me.

$350B would go a long way toward instituting "New Deal"-style measures that would actually work. I don't think it's necessary to feel that nothing would help. Anyway at this point Obama is fortunate that the public doesn't expect an immediate solution. As long as we see some movement in the right direction, I think Americans won't blame him.

[clear eye]

15. Duplicate

[clear eye]

16. If AIG execs didn't get a big bribe, they would "tell" on Paulson

AIG was hit the hardest by the unraveling of the CDS's that Paulson's Goldman Sachs helped create. If AIG and other knowledgeable execs weren't kept fat and happy, what would prevent them from writing disgruntled recountings?

[clear eye]

18. Obama is closely tied to Citigroup

Two of his initial core advisor group, with him throughout his campaign, are executives with Citigroup.

The backstory, which makes a kind of unhappy sense of the bailout, is that Paulson, before heading Treasury, was the vastly overpaid CEO of Goldman Sachs from 1998 - 2006. In 2004, the major investment houses, led by Goldman Sachs, demanded and got the removal of the EU regulation that required them to maintain a capital cushion against leveraged investments and other risk when doing business in Europe. The agreement stipulated that the SEC would be responsible for warning of problematic overextension, but in 2006, Paulson, in his capacity as Treasury Sec'y, pressured the SEC into discontinuing its oversight.

This, in effect, removed any short-term downside to marketing instruments that the investment institution couldn't back up. No one would be allowed to know the institution was vastly overextended, and if they eventually had to default on some instruments, there would be no capital for them to lose. The losses would fall to associated private insurers, like AIG, who would in turn default to the U.S. government. See http://www.nytimes.com/2008/10/03/business/03sec.html?_...

Goldman Sachs was a major generator of and trader in mortgage-backed credit default swaps, and Paulson was CEO of G-S during much of that period. After the revelations of the credit crisis, important foreign purchasers, especially China, the Saudis, and EU banks were understandably furious with the U.S. investment community, and there were hints they were considering retaliating by removing support from the U.S. dollar. China could sell some of its large holding of U.S. Treasury bonds as could European banks, and the Saudis could replace the dollar with the Euro as their trading currency. Given the shaky U.S. economy, those actions would, without question, crash the dollar.

At that point the financial community started buzzing with stories of the large investment houses, including Citigroup, buying back the bad CDS's from the foreign investors, although they did not apparently have the capital to do so. Much of Paulson's bailout spending could be seen as pre-agreed reimbursment of the investment houses' rescue of the dollar which they, themselves, with Paulson's help, had put in danger. Of course Paulson couldn't take credit for this "heroic" rescue because his and his colleagues responsibility for the crisis, and their willingness to wager U.S. gov't money, would end up front and center.

I'm not sure what's going on with Paulson's second wave of bailout spending, but it looks a lot like a hugely expensive (to U.S. taxpayers) celebration of dodging the bullet. Unfortunately extraordinary exemptions from accountability were written into the bailout bill that passed Congress (http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=389&topic_id=4118292&mesg_id=4118292">see my journal article), so it would take passing a Congressional amendment to rein this in.

[orleans]

4. well, not according to obama--on 60 minutes he said that he has

someone who is in contact w/paulson every day, and that paulson is working his ass off on this

??

on edit: in a positive/good way

[Triana]

6. Obviously. Give a Wall St. Tycoon free, unfettered access to the Fed Treasury...

...unmonitored, unregulated - and what'd anyone EXPECT to happen? He's gonna give it to his friends. Duh.

[gratuitous]

7. Is Inhofe saying that the Bush administration isn't trustworthy?

How very, very odd. Doesn't this make Inhofe some kind of unamerican traitor or something? Has anyone alerted Sarah Palin that it appears that James Inhofe isn't a "real" American?

[RufusTFirefly]

8. At last! A hoax we can agree on, Senator!

Granted, I still think Inhofe's a nutjob. Even a stopped clock is right twice a day.

[sixmile]

9. Even a broken clock is right twice a day

[bvar22]

10. Surprise, surprise..... No one could have foreseen THAT!

I'm sure glad The Democrats put in all that accountability and protections for taxpayers!

Now we got Your Children's Money too !!!
Hahahahahahahahahahahahaha



The Democratic Party is a BIG TENT, but there is NO ROOM for those
who advance the agenda of THE RICH (Corporate Owners) at the EXPENSE of LABOR and the POOR.

[MadMaddie]

11. Guess they should have thought of that before ramming it through

knowing there would be no oversite. Guess they couldn't see any problems on the horizen.

[liberalhistorian]

12. OMG, I'm shocked, shocked, shocked!

SHOCKED, I tell ya!

Nope, no inkling of that happening, no sirree. Nothing to see here, folks, move along, move along. And leave your checkbook, savings book, IRA, 401(k), pension, stocks, life insurance, social security, piggybank, and coins from your pocket and inside your couch cushions, all at the door, please.

[sarcasmo]

13. Operation Mind Crime where are you now?