Disaster Capitalism in Action

Lending by Bailed Out Banks Keeps Dropping

, Wall Street Journal, April 20, 2009

• Bailout
 
• Banks
 
• lending

Lending at the biggest U.S. banks has fallen more sharply than realized, despite government efforts to pump billions of dollars into the financial sector.

According to a Wall Street Journal analysis of Treasury Department data, the biggest recipients of taxpayer aid made or refinanced 23% less in new loans in February, the latest available data, than in October, the month the Treasury kicked off the Troubled Asset Relief Program. The total dollar amount of new loans declined in three of the four months the government has reported this data.

100 Former Govt Employees Now Working as Bank Lobbyists on Bailout

Daniel Schulman and Jonathan Stein, Mother Jones, April 9, 2009

• Bailout
 
• Lobbyists

"Corporations hiring departed congressional staffers as lobbyists is a ho-hum practice on K Street. But the stakes are particularly high when these Capitol Hill vets are sicced on programs and legislation that are crucial to the country's financial recovery and that involve massive amounts of government spending. In the past year, top bailout recipients, from Goldman Sachs to Bank of America to JPMorgan Chase, have dispatched more than 100 past congressional staffers and ex-government officials to shape the bailouts to their liking. This crew of well-connected lobbyists includes ex-employees of the congressional committees on banking, finance, and commerce; one-time aides to Democratic and Republican leaders; former Treasury officials; and a past aide to Rahm Emanuel, now the White House chief of staff."

Ex-Blackwater Workers May Return to Iraq Jobs

Rod Nordland, New York Times, April 4, 2009

• Blackwater
 
• Iraq
 
• Xe

“Critics of Blackwater said they worried that the same people might perpetuate what they believed was a corporate culture that disregarded Iraqis' lives. ‘They're really all still there, and it's back to business as usual,’ said Susan Burke, an American lawyer who has filed three civil rights lawsuits against Blackwater on behalf of Iraqi civilians alleged to be victims of it.”

Bankers Bet on Number of Arrests, Deaths and Injuries at G20

David Teather, The Guardian, April 2, 2009

• G20

"'I'll make money if they arrest more than 140,' he said. Traders, he explained, were putting spread bets on the number of arrests - with the quoted spread on Bloomberg at 130-140. They were also paying out on deaths and if more than 20 protesters were injured in horse charges. The riots, they said, were only a minor inconvenience: 'We've been in this morning, made a lot of money and now are chilling out.'"

Obama Administration Awards $20 Million Contract to Boeing for Border Surveillance Towers

Eileen Sullivan, Associated Press, April 1, 2009

• Boeing
 
• Border
 
• Contracts
 
• Surveillance

"Tim Sparapani, senior legislative counsel at the American Civil Liberties Union, said the Secure Border Initiative has been a disaster since its inception. 'The technologies don't work, they're not weather-resistant and they're certainly privacy invasive,' Sparapani said. 'Putting them in America's backyards only invades the privacy of Americans, it doesn't add to our security.'"

After Lobbying for Years, Banks Likely to Achieve Accounting Rules Change

Ian Katz and Jesse Westbrook, Bloomberg News, March 30, 2009

• Bailout
 
• Citigroup

"Conrad Hewitt, a former chief accountant at the SEC who stepped down in January, said representatives from the ABA, American International Group Inc., Fannie Mae and Freddie Mac all lobbied him over the past two years to suspend the fair- value rule. Executives 'would come to me in the afternoon with the argument, "You've got to suspend it,"' Hewitt said in a March 25 interview. The SEC, which oversees FASB, would reject their demands, and “the next morning their lobbyists would go to Congress,” he said.

Update on April 2: Government Gives in to Pressure and Eases Mark to Market Rules, Bloomberg News

Bailed Out Banks Make Campaign Contributions to Politicians Overseeing TARP

Michael Isikoff and Dina Fine Maron, Newsweek, March 21, 2009

• Bailout
 
• Bank of America
 
• Campaign Contributions
 
• Citigroup
 
• Lobbyists

"A NEWSWEEK review of recent filings with the Federal Election Commission found that the political action committees of five big TARP recipients doled out $85,300 to members in the first two months of this year—with most of the cash going to those who serves on committees who oversee the TARP program. Among them: 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 Kappel, 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.')"

Citigroup May Spend $10 Million for Executive Suite

Erik Schatzker, Bloomberg News, March 19, 2009

"Citigroup Inc. plans to spend about $10 million on new offices for Chief Executive Officer Vikram Pandit and his lieutenants, after the U.S. government injected $45 billion of cash into the bank.

"Affidavits filed with New York’s Department of Buildings show Citigroup expects to pay at least $3.2 million for basic construction such as wall removal, plumbing and fire safety. By the time architect’s fees and expenses such as furniture are added, the tally for the offices at the bank’s Park Avenue headquarters will be at least three times as high, according to a person familiar with the project who declined to be identified because he’s not authorized to comment. Citigroup said the project will help it save money over time.... 

Banks Receiving TARP Funds Owe More Than $220M in Back Taxes

Matt Jaffe, ABC News, March 19, 2009

• Bailout

"At least 13 companies who have received some of the $300 billion in TARP funds owe hundreds of millions of dollars in back taxes, it was revealed today. 

"Two of the companies owe more than $100 million in taxes, said Rep. John Lewis, D-Ga., chairman of the House Ways and Means Subcommittee on Oversight. Altogether, the 13 companies owed the government more than $220 million in unpaid taxes, he said.... He didn't identify the companies or indicate how much TARP money they have received. But some of the corporations that have received the largest chunks of TARP cash include AIG, Bank of America, Citigroup, General Motors and Chrysler."

Most of AIG's $160 Billion Bailout Went to Large Banks; Firm Also Spent $165 Million in Staff Bonuses

Hugh Son and Robert Schmidt, Bloomberg News, March 16, 2009

• AIG
 
• Bailout
 
• Executive Compensation
 
• Goldman Sachs

"American International Group Inc., under pressure to reveal how it spent billions of dollars in taxpayer funds since its September bailout, said $105 billion flowed to U.S. states and banks including Goldman Sachs Group Inc., Societe Generale SA and Deutsche Bank AG. Banks that bought credit-default swaps or traded securities with AIG got $22.4 billion in collateral, $27.1 billion in payments from a U.S. entity to retire the derivatives, and $43.7 billion tied to the securities-lending program, AIG said yesterday in a statement. States led by California and Virginia got $12.1 billion tied to guaranteed investment contracts....

http://www.naomiklein.org/shock-doctrine/resources/disaster-capitalism-in-action