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This goes on and on and seems to have legs by what I've read before.TARP Looking More Criminal by the Minute
The issue of TARP corruption may now extend from corporate CEOs and federal regulators to New Yorks attorney general.
By Donald Luskin
Is TARP a criminal enterprise? When a CNBC producer called me on Wednesday to see if Id debate that question on the Kudlow Report that evening, I thought the allegation was ridiculous. How could the U.S. Treasurys Troubled Assets Relief Program to rescue the banking system possibly be compared to the Sopranos?
But now Im not so sure. Yesterdays sensational claims by New York Attorney General Andrew Cuomo that Ken Lewis, CEO of TARP-recipient Bank of America, was pressured into what amounts to securities fraud by the Treasury and the Federal Reserve concerning his banks acquisition of Merrill Lynch throws the question right into the headlines. It raises issues of corruption all around, and at the highest levels from corporate CEOs and federal regulators to Mr. Cuomo himself.
What originally prompted my friend Larry Kudlow to ask if TARP is a criminal enterprise was Wednesdays report to Congress by TARPs special inspector general, Neil M. Barofsky, in which it was disclosed that nearly 20 preliminary and full criminal investigations are underway, including large corporate and securities fraud matters affecting TARP investments, tax matters, insider trading, public corruption, and mortgage-modification fraud. When I first read that I rolled my eyes and said to myself, Hey, what do you expect?
But then I started thinking a little more deeply and realized theres something more here even before the controversy about Bank of America became known. The more I thought about it, the more I realized how that enormous pot of TARP money has in fact corrupted both the private and public sector.
For example, Barofsky says hes doing an audit to respond to reports that external parties may have sought to influence decision making by Treasury or bank regulators in considering and deciding on applications for funding from TARP. Perhaps this refers to the controversy that surfaced last January when it was said that Barney Frank (D., Mass.), the powerful head of the House Financial Services Committee, intervened to get TARP funding for a favored constituent, Bostons OneUnited Bank. According to the Wall Street Journal, Mr. Frank, by his own account, wrote into the TARP bill a provision specifically aimed at helping this particular home-state bank. And later, he acknowledges, he spoke to regulators urging that OneUnited be considered for a cash injection.
Is that the public corruption Barofsky is talking about?...
I don't see any realities — other than the dynamics of panic — that justify stocks coming off 15%, especially when they weren't especially overvalued to begin with. And I don't see any realities — again, other than panic — that would justify them falling further, especially since now they're extraordinarily undervalued.
The economy isn't falling into recession. Retail sales are just fine — the supposedly horrible numbers for December look pretty much like the kind of numbers you get every couple months in the normal ebb and flow of a growing economy. We still haven't had any negative jobs growth. The unemployment rate is now 10% lower than the historical average for economic expansions. Jobless claims are at the low end of the range of the last several years. S&P 500 forward earnings, outside the financial sector, are at all-time highs. Some credit markets are in disarray, but bank lending is operating at very near all-time highs. Damaged credit markets, such as the market for asset-backed commercial paper, have been steadily recovering from the summer crisis.
There is always going to a bit of corruption when large amounts of money are passed around and businesses see easy street in a surprise package. The key is to minimize the corruption. And the critical question here is was Tarp doing what it is supposed to be doing. Every economist agrees we need to spend money, the disagreement is often only over what and where. We surely do not need another great depression.
There is always going to a bit of corruption when large amounts of money are passed around and businesses see easy street in a surprise package. The key is to minimize the corruption. And the critical question here is was Tarp doing what it is supposed to be doing. Every economist agrees we need to spend money, the disagreement is often only over what and where. We surely do not need another great depression.
Wells Fargo chairman Richard Kovacevich, for example, says that he was “forced to take the TARP money.”
Wells Fargo chairman Richard Kovacevich, for example, says that he was forced to take the TARP money.
I think he is a liar. They took the TARP money and bullied their way into owning Wachovia. I know when the took over First Security they sucked money out of peoples accounts like crazy. My parents were nailed for ten grand.
As Norwest aka Well Fargo made their transition they did the same thing. By not sending out regular statements they made off with a small fortune of other peoples money. Including tax payer dollars. RK came from CITI. Plus many of the CEO's and/or their families own or control little side banks.
Was TARP criminal. I'm sure it was.
Not that I care, but I don't think one person here has addressed the authoritative source cited.
Not that I care, but I don't think one person here has addressed the authoritative source cited.
Its very possible that the government forced the banks to break securities laws.
Possibly. Even if they could have it still would have been with inflated paperwork and creative accounting. They been doing it for so long it is as their attorney told the Iowa Supreme Court, "Standard banking practices your Honor."Wells Fargo chairman Richard Kovacevich, for example, says that he was forced to take the TARP money.
I think he is a liar. They took the TARP money and bullied their way into owning Wachovia. I know when the took over First Security they sucked money out of peoples accounts like crazy. My parents were nailed for ten grand.
As Norwest aka Well Fargo made their transition they did the same thing. By not sending out regular statements they made off with a small fortune of other peoples money. Including tax payer dollars. RK came from CITI. Plus many of the CEO's and/or their families own or control little side banks.
Was TARP criminal. I'm sure it was.
Could or would have they done that without TARP?
Possibly. Even if they could have it still would have been with inflated paperwork and creative accounting. They been doing it for so long it is as their attorney told the Iowa Supreme Court, "Standard banking practices your Honor."I think he is a liar. They took the TARP money and bullied their way into owning Wachovia. I know when the took over First Security they sucked money out of peoples accounts like crazy. My parents were nailed for ten grand.
As Norwest aka Well Fargo made their transition they did the same thing. By not sending out regular statements they made off with a small fortune of other peoples money. Including tax payer dollars. RK came from CITI. Plus many of the CEO's and/or their families own or control little side banks.
Was TARP criminal. I'm sure it was.
Could or would have they done that without TARP?
Just saying these banks/giants have no scruples period. They may be saying one thing but that does not mean there is any truth to it. They have paid off a lot of people to keep there program flowing.
If you are looking at the situation on a whole then consider who owns/ed what and when did they acquire it and/or on the other hand what did they sell and when? Who was a leader in the home mortgage a few years back? WF. Who did they sell those inflated and BS mortagages to? Who went under over all that creative paper and who is still footing the bill for them going under? You have insurance/banking/funds and mortgage companies that are up past their eyeballs in this mess.
White House Denies Charge By Attorney that Administration Threatened to Destroy Investment Firm's Reputation
May 02, 2009 3:17 PM
A leading bankruptcy attorney representing hedge funds and money managers told ABC News Saturday that Steve Rattner, the leader of the Obama administration's Auto Industry Task Force, threatened one of the firms, an investment bank, that if it continued to oppose the administration's Chrysler bankruptcy plan, the White House would use the White House press corps to destroy its reputation.
The White House said the story was false.
"The charge is completely untrue," said White House deputy press secretary Bill Burton, "and there's obviously no evidence to suggest that this happened in any way."...
SATURDAY, MAY 2, 2009
White House uses strong arm tactics to extort concessions from lenders
Yesterday (May 1) on Detroit’s Frank Beckman’s morning talk show (WJR), bankruptcy attorney Tom Lauria made the incendiary accusation that the members of the White House had threatened to use the “the full force of the White House Press Corps to destroy” his client’s reputation if it didn’t acquiesce to highly unfavorable terms of the government’s proposed Chrysler restructuring plan. Because of the strongarm tactics, Lauria’s client dropped its opposition.
Here is the tape of Beckman’s interview of Lauria. The relevant portions begin at the 1:30 mark. Listen to it.
Lauria: Let me tell you it’s no fun standing on this side of the fence opposing the President of the United States. In fact, let me just say, people have asked me who I represent. That’s a moving target. I can tell you for sure that I represent one less investor today than I represented yesterday. One of my clients was directly threatened by the White House and in essence compelled to withdraw its opposition to the deal under the threat that the full force of the White House Press Corps would destroy its reputation if it continued to fight. That’s how hard it is to stand on this side of the fence.There is a pattern here. Financial institutions holding billions of Chrysler’s secured debt are being held hostage by the TARP loans they are not permitted to pay back. They are being forced to accept just pennies on the dollar for loans they made in good faith less than two years ago. Just like mob loan sharks, the administration wants them under its thumb so they can extort more and more concessions.
Beckman: Was that Perella Weinberg?
Lauria: That was Perella Weinberg.
This is an abuse of power that goes beyond Nixon.
POSTED BY CORKY BOYD AT 9:15 AM
Chrysler lender group plans objection to sale
Fri May 1, 2009 5:03am BST
By Emily Chasan
NEW YORK (Reuters) - A group of about 20 lenders that balked at the terms of a government-brokered deal to cut Chrysler LLC's $6.9 billion debt, are now planning to object to the company's planned bankruptcy sale, their attorney said on Thursday.
Chrysler LLC filed for Chapter 11 bankruptcy protection in New York on Thursday, saying that it would sell its core assets including its Chrysler, Jeep and Dodge brands into a new company that would be owned by the U.S. government, Fiat SpA and the company's workers.
The plan, however, depends on U.S. Bankruptcy Court approval of the sale, and this group of lenders feels the current plan to sell those assets within 30 to 60 days may infringe on their legal rights.
"We're just standing on the law," said Tom Lauria, a bankruptcy attorney at White & Case, representing a group of about 20 Chrysler first lien senior secured lenders....
...He said the group understands the need for Chrysler to sell itself and for the industry to restructure, but owes a fiduciary duty to its investors and objects to the way Chrysler is trying to divvy up the proceeds of the bankruptcy sale without putting it to a creditor vote.
"This is not an objection to rescuing Chrysler, Lauria said.
Rather, Lauria said, Chrysler's proposed plan "inverts" the classic priority scheme written into the bankruptcy code, where senior secured creditors are paid in full first, followed by junior lenders, administrative claims, unsecured lenders and equity holders.
"The sale is an attempt to end-run the procedural protections that are provided to stakeholders by Chapter 11," he said.
"What's happening is the senior secured creditors are going to get 29 cents on the dollar and the unsecured creditors are going to get $10 billion (6.8 billion pounds)."
Lauria said his clients had viewed the quality of their collateral as secure and took correspondingly low interest rates on their loans to Chrysler because the loans were "seemingly secure." But now the lenders find themselves effectively subsidizing more junior creditors, in a way that would not typically occur under the bankruptcy code, Lauria said.
"No court has ever approved something like this before. It is without precedent," Lauria said....
Obamas pay-to-play scheme
ABC News reported that Steve Rattner, the leader of the Obama administrations Auto Industry Task Force, threatened to ruin an investment firms reputation.
Check out the denial.
Jake Tapper called the White House for its side, and the flack said: The charge is completely untrue, and theres obviously no evidence to suggest that this happened in any way.
Whoa. How does White House deputy press secretary Bill Burton know that there is no evidence?
President Obama embraced Venezuela dictator (and lefties hate when I call him a dictator because he was elected as was Kim Jong-Il, Fidel Castro, Josef Stalin, Saddam Hussein and every other lefty dictator).
But the Obama administration threatens taxpaying Americans if they dont give his government concessions that amount to a tax by taking less money than they loaned the businesses that Obama Inc. is taking over.
Tapper reported: Thomas Lauria, Global Practice Head of the Financial Restructuring and Insolvency Group at White & Case, told ABC News that Rattner suggested to an official of the boutique investment bank Perella Weinberg Partners that officials of the Obama White House would embarrass the firm for opposing the Obama administration plan, which President Obama announced Thursday, and which requires creditors to accept roughly 29 cents on the dollar for an estimated $6.8 billion owed by Chrysler.
In short, Obama wants companies to eat nearly $5 billion so that he can give away Chrysler to protect union jobs.
The unions that backed him. This is their payoff.
If true, this is the biggest corruption scam in American history.
But like Obamas $750 million campaign jackpot, this alleged pay-to-play scam will not be investigated by the authorities, Congress or the press.
Maybe Tapper will stay on it, if Walt Disney-ABC lets him stay on the story.
