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.
Ask the Morgan-Stanley CEO if they used those moneys to buy oil and rent tankers to store the oil off-shore until the price of oil rebounds, costing a rental of $68,000 a day.
The question that need to be asked is:
1) Do the American people really need the services and products of the businesses that are being loaned the tax monies of the American citizens?
That implies that are those PRODUCTS AND SERVICES PROVIDING THE BASIC AND ESSENTIAL NEEDS OF THE PEOPLE.
If not then the banks should note that the tax payers money will go down the drain.
I'm sorry if this seems like a stupid question or just plain too much common sense embedded in it but why did you get bonuses at all this year if revenues were down?????
In my house, when "revenues" are down (i.e. husband gets laid off) we don't give ourselves a bonus................. we are forced to cut our expenses. DUH!!!!!!!
How many jobs could have been saved with the money these morons paid themselves for failure??
One more question to ask: how many of you, through whatever means, have moved revenues off-shore to avoid taxation in the United States? Now, how many billions of dollars are now off-shore that have not been taxed as they should have been?
Hint: It will be measured in the TRILLIONS, not millions.
Let's say I have $1 and tell you I need another $1 to save myself from the boogeyman, so you give me $1 with a mark on it. Then I spend the unmarked $1 on a sack of weed. Does it matter that I didn't spend the marked $1 on the weed but devoted it to the boogeyman problem? That's basically what these jerks are saying.
Just switch these CEOs with Michael Phelps in his now-famous picture and stick the first $350B in TARP money in the bong instead of the weed. That's what's went on when the Bush administration failed to supervise and place conditions on the TARP money.
Great, much need overhaul...much needed transparency!!!
@ Capt. Smash
Get used to it...the blithering idiots in the GOP are so mad that the country told them to go eff themselves on November 4, 2008 that they'll blame the next hurricane on a Obama fart.
Still got the wrong date there buddy.
Is there anyone out there that is keeping their eye on the bouncing ball?
Christopher Dodd has been Committee Chairman of the Banking, Housing & Urban Affairs for almost the last three years. He and Barney Frank laughed at Bush and Greenspan when they came to them to try to get some oversight and yet some would have us believe that this mess is Bush's fault. The facts don't lie.
Now Chrisopher and his buddies, Nancy and Harry and Barney are all there again trying to tell us what they are going to do with our money and at the same time complaining about what the banks did with the last chunk of cash. Why doesn't someone ask them where the oversight was again?
Arrest them as soon as they walk in the Door. Put them in cuffs, Put them all in separate cells, and start putting the pressure on them, get them to tell on each other. These crooks are getting away with the largest heist in the history of mankind and we are holding their hands, and telling them oh poor baby, lock Um up.
Lock up Bernie Madoff and throw away the key. There are thousands of Madoffs out there, why are we not arresting them?
Who stole my savings, my 401K, and my retirement? We should have consequences when crimes are committed? But we will throw Michael Phelps and A-Rod under the bus because they are such a risk to the safety of society?
If one man (Madoff) can steal 50 Billion, I wouldnt think that these big banks would be too far behind but on a grander scale. They have been ripping off the public for years. Now, thanks to Bush they got even more of our money without any accountability. I say, let Congress nail their shameless hides to a post. Before they get one more dime, they should tell us how and when it will be spent and how it will benefit the taxpayers giving it to them.
How are they any different than Congress; they each take kick-backs (lobbyists, bonuses, etc.) and screw the country?
Barney Frank was warned a long time ago that there were problems at Fannie Mae and Freddie Mac. What did he do as head of the senate banking committee he provided political cover for them because they were stuffing his pockets with campaigh contributions. If Barney had done his job we not be bailing out the banks with TARP funds. He should resign.
How can CEOs get bonuses when they have failed in their job.
Anyone failing in their job would usually get no bonuses and would be shown the door or some retraining...
These banking officials are " liars and theives" $18000 for an "area rug"? Etc,etc,etc. They need to be taken out in the street and tarred and feathered. Don't investigate them, give them to us! We will educate them in a way that no other "banking official" pulls this crap on the American public ever again. They need to be taught responsibility, as it is clear they have none.
"initiative – 1. an introductory step"
"action – 5. a thing done"
See the problem? They are BANKS. They are in teh business of lending money. They don't need "initiatives" to take capital and turn it into loans. They can just do it. This is just a buttload of double-speak from people who are trying to save themselves from Webster's placing their picture next to "pariah."
Do you think Barney is going to tell the truth? If anyone gives him more money they are out of their minds. He needs to go bye bye.
First– If you are running a solid business, then you should have been able to tell congress what you needed the money before it was approved. Under the Bush administration, you knew you did not have too.
Second–Just tell the truth that you used it to pay off the debt you owe because of those unsecure worthless finanicial paper you sold to foreign investors. You really did try to sell the Brooklyn Bridge.
WoW ! after reading practically all of these comments on here, I
can't hardly blame the people that are ticked off at this whole thing....
I typically read the "Intelligent Posts" ( not the "one liners" that are lewde / crude / rude ) Those are the people with the most common sense, of course)
now we all know what the CEO's did with our tax money – they gave themselves huge bonuses. Why give them more of our money? Give US the money and we'll jumpstart the economy.
Bonuses for failure – only in a 3rd world company would the gov't use it's citizens tax money to give rich people more money. Shameful. STOP THESE BAILOUTS and help AMERICANS!
Blame Barney Frank???? You right wing nuts are KILLING ME! YOUR PAULSEN is the one that gave the money away. You really need to pay attention before you nuts start pointing fingers at ANY ONE on the left. You people are a joke~
My God people! The money went straight on the books to make last years loss -250B instead of -500B!! Haven't any of you ever run a business? And yet you still think government does better??
Jeeesh! You guys must be related to my mothers side..
Watcher, you make a good point!! What timing for this dog and pony show. Who cares what Congress says, they still get their money! I will take an 8 hour tongue lashing for 125mil, who wouldn't.