WASHINGTON (CNN) - When those automakers flew to congress in corporate jets to ask for a taxpayer bailout, no one was more upset than the powerful chairman of the house financial services committee, Rep. Barney Frank of Massachusetts.
So irate over the use of corporate jets, Frank was determined to make sure it never happened again. His plan: no corporate executives coming to Washington asking for bailout money would be allowed to travel in those multi-million dollar symbols of excess.
To make sure corporate America got the message, Mr. Frank dropped a provision into the latest bailout bill, H.R. 384, the TARP Reform and Accountability Act, requiring would-be recipients of taxpayer funds to dump their corporate fleets. The message: If you want taxpayer money, sell your jet and fly commercial.
That sure sounded tough. And it sure sent a message to the automakers. When they came back to Washington, they drove.
But last week, Rep. Frank quietly stripped the no-jet provision from the bill. Why?
In a word: Kansas.
Kansas is a hub of aircraft manufacturing, particularly the making of corporate jets. One of Frank's fellow Democrat congressmen, Rep. Dennis Moore of Kansas, sent the powerful chairman a note that delicately suggested he re-think the tough talk.
"We have to be careful about Congress overreacting," Moore wrote in a statement.
What he told CNN he wrote to Chairman Frank was more diplomatic.
"It is clear that the auto executives were insensitive to American taxpayers when they flew in their private jets to request billions of dollars," wrote Moore. "But I have concerns that applying this well-intended provision may have unintended consequences of hurting the general aviation industry and its workers."
The congressman pointed out pointed out that 44,000 workers in Kansas work directly for the airplane manufacturing industry, and a lot of families depend on those paychecks. Last Tuesday, the "no-fly" language was dropped, and yet another get-tough message from Congress got a soft landing.
Late today, Chairman Frank sent a statement to CNN explaining his decision. "The private aircraft industry is an important industry in America, and it plays a necessary role with businesses in certain areas of the country," he wrote. "For example, there are a number of communities that do not have commercial air service available for hundreds of miles. Some of these communities are already in economic distress, and denying businesses the ability to use private aircraft further disadvantages these businesses and seriously impacts thousands of American jobs that provide services to this industry.
"I heard from many members of Congress from both parties representing a half a dozen states expressing concerns of their constituents in regard to this matter and hence why we further reviewed the issue and ultimately removed it from the legislation."
Coming from the King of the failed housing market. Nice....
Sounds a lot to me like "politics as usual" and earmarks for the aviation indusrty. Plus Barney's a wuss.
The private jet industry is just as valid as any other. To have their business threatened by a grandstanding politician is not right. If the auto companies had run their businesses properly, they wouldn't be asking for a bail-out and nobody would care about corporate jets. People need to keep their eyes on the ball, and not bad-mouth legitimate industries that are not seeking tax payer money.
So this guy, basically responsible for the near-destruction of the financial industry with his Fannie Mae ties, blows a smokescreen with the private jet scapegoat. And then, once the furor is over and all eyes are elsewhere he quietly drops the tough talk and the provision.
Yep, Nancy Pelosi promised to "do something" about the culture of corruption in 2004, and so they have.. they've maintained and nurtured it quite well. Nice job.
It is in the bylaws of some of these corporations to mandate their CEO's flying privately due to security concerns. However, I think that ownership of a private fleet is excessive and, if the companies are looking for a way to maintain security, if necessary, and comply, then they should use charter companies.
if you had good intentions but found they actually hurt a of people, would you change your mind? Unlike the past 8 years, when a possible mistake is made, it is corrected and it is made public, not swept under the rug.
I think this incident, stripped of all political innuendos, shows how closely related and inter-dependent all US industries are upon each other. It could make the recovery easier or more difficult as one industry's solution could create another industry's problem.
I live in Kansas, close to Wichita, and believe me, the Kansas Republicans and aerospace industry views this issue as MAJOR! They think that if this restriction remains in the legislation that this area of the country could really go into deep recession. As it is, the aerospace industry is already cutting jobs.
My family is not dependent upon the aerospace industry for a paycheck, but this is exactly the kind of impediment that lawmakers are going to have to deal with as they write restrictions into the use of the TARP money. Our lawmakers must take a larger view of the economy is this "bailout" or "investment" or whatever they wish to call it is going to get through congress.
because somebody has dug up a little mud on mr. frank, ala fanny mae, and it might stick...
BARNEY FRANK WHAT MORE CAN ANYONE SAY.... ANOTHER WASTED HUMAN BEING.
Are you kidding me with this? Is the government going to bail out enough companies withcorporate jets that it would affect corprate jet production? Again...Are you kidding me? Pathetic!!!
Vote the rest of them out! Disregard the party affiliation!
I'm no apologist for the auto industry, but you cannot deny senior executives use of these aircraft and at the same time expect them to run these huge companies efficiently while either flying commercially or sitting in cars for hours between cities.
There's a reason people in high profile,demanding jobs fly in corporate jets. We can't start tying one hand behind their backs by sending them on an airliner. Time is money.
This was an easy way for the popular press and Congress to find another thing wrong with Detroit.
Good. That's a tiny tiny first step...but I can think of 100 other things to "drop" in the next bailout bill to both punish and force reform upon the upper-echelon of corporate America. Why don't we start with them refunding all the money they paid themselves from the point where the necessity of a bailout became foreseeable...hmmmm? Why should they get to keep all that money when they knew the business was going under, especially iof they were syphoning it off to themselves before it was too late?
A no win situation for Frank. If he scraps the provision, he's being soft. If he keeps it, he's threatening American jobs. Which would you rather be guilty of in today's economy?
Oh wait, it got stripped because an industry grew up around consumerism that shouldn't have existed? Who'd a thunk?
Apparently you all, and congress, have forgotten that when people such as them travel frequently to many places, it is -cheaper- to make use of private jets. But hey, I have to fly coach the two or three times a year I fly because it'd be too expensive otherwise, so my reality must apply to everyone else around me.
Now if they drove there in rediculously expensive to manufacture, gas guzzling cars, THAT would be far more offensive.
Ahhh, more wisdom from Pelosi's Pomeranian
Actually, Jim, it is employees who belong to the Auto Workers' Union who clock in, sleep 8 hours, get paid, clock out and go home who are the problem. I personally know GM and Ford employees who did this.
It's interesting that Rep. Frank doesn't want executives flying private aircraft while they ask for handouts, but his leader, Rep. Nancy Pelosi, gets the use of a private airplane to go anywhere she wants. If anybody has their hands out demanding more of our tax dollars, it's congress. Drop the airplane Rep. Pelosi and fly commercial every once in awhile! I promise, Al Gore will smile.
Tell the guy with the salary of 2 million to give back his 21 million dollar
bonus– there's your bailout, bozo
Say on average you fly four executives averaging $1mill salary, each. That works out to $2000 an hour. How many hours do they have to spend going through security, waiting on flights, etc. before you break even? Far less is saved by flying commercial than most folks would imagine, Including Frank.
Does Barney Frank know that the Chuch Age has come to an end ?
Barney still will not accept the fact that he and dodd were the prime reason for the collapse f the mortgage industry. just like his life, he has no clue.
hey barney, what about stopping politicians from receiving sweet heart interest rates from government run lending institutions? ala chris dodd.
one word to describe the man – clown.
Congress should set the example and strip Pelosi of her corporate jet. Is there some real reason she needs an airplane or is it she just wants an airplane?
Aircraft CEO's don't drive cars so why should auto CEO's fly in aircraft. They should be proud enough of their product to drive it.