Monday, November 17, 2008

Bailout Money Used for Bank Bonuses! How Dumb is Congress?

Stop payment on some of that bailout money, NOW!
That should have been the response by the House Oversight Committee's Chairman, Henry Waxman, when he found out that $108 billion of the $125 billion of taxpayer money given to the banks would go to employee compensation and bonuses. But instead, typical of almost all Democratic responses, this polite letter:

Mr. John G. Stumpf
Chief Executive Officer
Wells Fargo & Company
Dear Mr. Stumpf: Earlier this month, the Treasury Department announced plans to invest $125 billion of taxpayer funds in nine major banks, including yours, as an emergency measure to rebuild depleted capital. According to recent public filings, these nine banks have spent or reserved $108 billion for employee compensation and bonuses in the first nine months of 2008, nearly the same amount as last year.

Some experts have suggested that a significant percentage of this compensation could come in year-end bonuses and that the size of the bonuses will be significantly enhanced as a result of the infusion of taxpayer funds? According to one analyst, "Had it not been for the government's help in refinancing their debt they may not have had the cash to pay bonuses."

While I understand the need to pay the salaries of employees, I question the appropriateness of depleting the capital that taxpayers just injected into the banks through the payment of billions of dollars in bonuses, especially after one of the financial industry's worst years on record.

Henry A. Waxman

The only thing Waxman left out was the XXX & OOOO!

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