Monday, March 16, 2009

More TARP Woes

We knew Pilar had it right when she asked on February 18th why TARP recipients and financial institutions "with very hard bottom lines and very tangible products" were not held to the same dollar-for-dollar financial reporting requirements as nonprofit organizations.

Her words ring more frightfully true in light of the latest news of $165 million in bonuses paid out to AIG executives, a group that has already received more than $170 billion in taxpayer bailout funds.

But don't worry folks, only another $90 billion of those bailout funds were passed from AIG onto Goldman Sachs and "several other European banks," according to the latest news from Reuters. 

Surely we should not be depending on the media to reveal the use of TARP funds. And certainly this is not the last time we'll see violations of taxpayer "donor intent" making headlines. 

1 comment:

JARRIN said...

But therein lies a fundamental problem: what do we do about it?

Point being is that often after these glaring abuses of power and corporate stupidity are uncovered, we the public read about them, rightfully get infuriated and then do (presumably) nothing. We assume that our government or "someone" will clean up the problem.

Sometimes they do and sometimes they don't. Sometimes those "problems" aren't illegal in nature making it harder to police or enforce. Case in point: Was it illegal for the CEO's of the major US car manufacturer's to fly on their corporate jets to DC and lobby congress for bailout monies? No. Was that wrong - I say YES. Did I do anything about it after learning about it? Zero.

Luckily, in the jet instance and in the examples of AIG, our Congress and the Obama Administration did do something. Seems that both are under so much scrutiny that policing of stupidity is at an all time high. The CEO's all agreed to curtail their use of corporate jets (often an exorbitant expense to a corporation) and earlier today Obama ordered Geitner to block AIG bonuses.

But what about Oberwetter's observation that financial institutions "with very hard bottom lines and very tangible products" are not held to the same dollar-for-dollar financial reporting requirements as nonprofit organizations. If accurate, that's ludicrous. And who among us is doing something about it? Shouldn't we do something about it? Even if it's just bringing it to the attention of a non-profit that can do something about it? I think so...

- JARRIN