WASHINGTON (CNN)– The chief executive officers of eight of the nation's largest banks will defend the use of hundreds of billions of dollars in bailout money to lawmakers on Capitol Hill Wednesday.
The CEO's of Bank of America, JP Morgan Chase, Citigroup, Goldman Sachs, Wells Fargo, Morgan Stanley, Bank of New York and State Street Corp. recently came under scrutiny after being accused of using bailout money from the Troubled Asset Relief Program to fund bonuses and lavish vacations.
"American people are right to expect that we use funds responsibly, quickly and transparently to help American families, businesses and communities," Vikram Pandit, CEO of Citigroup is expected to say before the House Financial Services committee, according to prepared remarks. "They also have a right to expect a return on this investment."
Recently the ailing bank received $45 billion in government bailout money which Pandit will explain that $35.6 billion has gone toward new programs and "lending initiatives."
"We have every incentive to lend," Kenneth D. Lewis, Chairman and CEO of Bank of America is expected to say Wednesday. "And, despite recessionary headwinds, we are lending."
Bank of America is expected to make its first return to the Treasury next week of $400 million according to Lewis.
"We intend to pay all the TARP funds back as soon as possible," Lewis is expected to say.
Sharing a common theme as the new Obama administration, each of the executives plan to harp on accountability and transparency, while defending their use of the capital.
"We have not used [TARP funding] to pay compensation, nor did we use it to pay any dividends or lobbying costs," John J. Mack, Chairman and CEO of Morgan Stanley is expected to tell the committee.
Lloyd C. Blankfein, Chairman and CEO of Goldman Sachs, which received $10 billion of capitol is expected to say the company has already dedicated $13 billion in new financing since October 27.
"While the firm produced a profit of $2.2 billion in 2008, our revenues were down considerably," Blankfein is expected to say, according to prepared testimony. "Compensation across the firm, dictated by our policies and practices, reflected that. End of year bonuses were down on average 65 percent," with more senior members being down "approximately 75 percent."
The underlying message each executive will convey is the understanding of the "serious responsibilities" the banks undertook when they negotiated with the Treasury Department and their full cooperation and intent to repay each dollar.
This meeting comes a day after Treasury Secretary Tim Geithner announced a plan to overhaul TARP to in part tighten the terms of further aid to banks and demand greater accountability. Last week, the administration unveiled a plan to restrict CEO pay at firms receiving government assistance.
one bank is already paying back some of the funds. I wonder if this has anything to do with the lawsuits being filed against the bank
I love that picture..., my two BFF.
Interesting. This is a huge moment for these companies to show character and honor. No doubt their report will be doctored, but if they are showing initiatives to do the right thing, then I say get off their back and let them operate.
What's funny is everyone wants to blame Bush for the TARP money being used inappropriately by the banks; i.e., no accountability. The fact is, the two people that are figureheads in the financial downfall of the country, and who had the opportunity to install accountability for the money, are in the picture with this article: PELOSI...and BARNEY FRANK....two "leading democrats." What's truly a moral crime on the part of the American people is their unquestioned support of these two clowns, along with Obama. We're getting robbed blind with the "stimulus-pork pkg," along with TARP...along with Geithner's "brainchild," idea of what to do with mortgages....liberals need to think and research more about who they vote into office, instead of just riding the "feel-good, celebrity," bandwagon of "change and hope." That, as time over the past few weeks has proven, is saturated with lies, and is getting up nowhere.
Can Barney Phife be impeached?
These are no longer nickel and diming us in fees to record profits – instead thet are suckung it out of tge gov.
First year mba course teaches you that money is fungible -I hope they call them on that LIE.
Are dumb and dumber going to be questioning the bankers? Can't we get some adults in there?
I tried that "repay as soon as possible" line on my lender. Didn't work.
Keep in mind, the banks didn't TAKE money from the government – it was offered to them and the government failed to even ASK the people who funded the bailout if we WANTED to fund the bailout. Because the idiots in the GOP one day were screaming the sky was falling after 8 years of them telling us "Oh everything is fine. Let's not regulate anything."
Now those very same idiots are telling us "Well, this was a long time coming.. it took a while for us to get here so it will take a while to get out."
Which is it Mr.Boner? Can Senator Hypocrite the (R) from Kentucky tell us?
Bottom line: When the government hands over billions of dollars to sustain a company from going under, NO ONE shoud be getting bonuses with the money! Especailly fat, bloated executives who are not hurting financially! Even if bonuses are down considerably, 35% of one million is still a significant enough amount of money to be seen as wasted on kickbacks, excuxe me bonuses.
Blatant arrogance. Maybe TARP funding didn't directly pay compensation or dividends or lobbying costs, but if those institutions hadn't received TARP funds, they certainly wouldn't have been able to justify those expenditures to investors or shareholders I wouldn't think. Anyone with a little common sense should be able to figure that out.
RIGHT................I suppose they were the SUCCESFUL ones to deliver ice-water in hell? Please you got the last of America's free money YO. Be honest!
Barney Frank needs to shut the heck up. He is a big part of the bank-mortgage problems.He was in with Freddie and Fnanie the whole time while they were going under. Just how much did he get out of it? He needs to tell us why he kept a BLIND EYE....... When most were sounding beels about a problem, he was there saying NOTHING was wrong. He needs to answer to the Amerocan public for his not letting all be known. I have NO RESPECT for this so called elected oficial. Until they give MONEY to the American to get the economy moving nothing will change. We are out of JOBS!!!!!! No one will be buying anything until they have money. Too many opeople losing their home and entire lives. Tax xuts do not mean a darn thing. If people are NOT working how and the heck do they expect TAX cuts to put money in our pockets. This whole thing is a JOKE on us. The banks already took millions to pay their CEOs bonus's. What a joke. . If Obama had the ball*s, he would DEMAND they give it back. BUT no......He didn't. So here we sit still in deep dodo. Nothing is going to change Not as along as you have people like BARNEY FRANK in office. That man has alot to answer to. PEOPLE NEED MONEY IN THEIR HANDS NOW.........NOW ! What is it they do not understand. We need to save ourselves and our families. Whitl the fat cats are living hight on the hog, we are forced to live in shelters or our cars. Maybe its time we take back our own country. They only way to get this country moving forward is to GIVE US FUNDS to do it................I am ashamed to b e an American today. Our eletced nitwits, allowed this to happen and BARNEY FRANKS was a big LEADER......HE NEEDS TO COME FORWARD AND TELL THE TRUTH.......No one can buy a darn thing if we do not have jobs and money to do so.....Thats the problem...WE HAVE NO MONEY or JOBS.....You my friends seem to only be looking for yourselves and alwasy will...Good Luck to you all.....You have let this country down yet again...be proud of that.......
Congress is going to rake these banker guys over the coals, just in time to provide distraction from their absurdly bloated stimulus plan. How convenient.
Do you know who is responsible for this entire financial disaster ?? Rep. Barney Frank is chairman of the House Financial Services committee.
Open the books and prove it. We'll believe it when we see it you disgusting sacks of corporate crap.
Everyone of those crooks should be held accountable. They
are nothing but pathological liars and low-life. They should
be thoroughly investigated and made to pay back any of the
funds used inappropiately.
"That's SO unfair!" said John Thain, CEO of failed Merrill Lynch, from the seat of his $35,000 toilet.
(That's the $35,000 toilet paid for with YOUR bailout money.)
I still do not see how bailing out the financial industy is helping the average American. The government is so eager to give money to business', but certainly not to the common folk. Bush, your little $600 last year did nothing to help me. And Obama's $500 is going to do even less. Guess I shouldn't complain. I am lucky to still have my job. For how much longer I have no clue.
This is a joke and the Bank executives are clowns. They need to lend more to businesses and stop taking excutive bonuses and lavish vacations.
I wonder if anyone will point the finger of blame where it properly belongs...right at Barney Frank.
One of our Members of Congress recently has referred to the TARP as
a TRAP. Just yesterday, another Member of Congress said "that Americans do not care about the pork" in the Stimulus Bill. I would like to see the results of a public poll on that comment; since Americans
are going to have to pay for Trillions, not Billions any more, as updated
versions of the Bill since Sept. of last year, have become excessive in
cost, let alone, not being directly related to stimulating jobs being lost.
President Barack Obama inherited a budgetary deficet from President
Bush, and at the same time he was expected to push an overloaded Congressional Bill, that would make sacrifices on the taxpayers far
greater than he had anticipated, amidst fear of a faltering economy,
and an impending Depression. He has followed through on promises
of new bi-partisanship; but, has not fully been realized the established
political power, that does not support his effort to protect the taxpayers.
Aren't bonuses issued for the goals reached in business success above and beyond the expected? With that in mind, how do any of these CEOs qualify for bonuses?
they should all be fired without golden parachutes.... an unconscionable use of bailout money handed over by moron Bush.
I do not care what they say. I care what they do. CEOs, prove to us what you have used the money for. Show us the records of how you spent each and every cent. Your word means nothing to us anymore.