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.
Barney Frank and his cronies are laughing at all of us, because no one is making them accountable for their actions.
why aren't the feds investigating barnie frank for getting fannie mae and freddie mac into the mess it wound up in? As I understand it, frank made millions out of the deals he propogated.
They took the money under false pretenses. They used the money to buy up smaller banks and widen there monopoly. The Senator recieved kickback and the Fat Cat fired the American Employee only to file for more H1 Visa to hire cheap labot to do the jobs that was once done by Americans?
Wake UP!!!! Checks and Balance has gone out the window.
No Regulation is what McCain and Bush Offered let get this right.
One One need to serve jail time..
the only way the government can help our economy is to give every TAXPAYER enough money to pay off their debt, then money will be back in the economy where it belongs, NOT IN SOME CEO'S SWISS BANK, IF YOU CAN GIVE IT TO THEM, WHY NOT TO THE PEOPLE WHO SO DESPERATLY NEED IT, WHAT'S THE DIFFERENCE, HELP IS HELP NOT SOCIALISM.
When do "We The People" get to grill Barney Frank and his band of thieves for the collapse of Fannie and Freddie???
I can't believe my ears. In my entire life I have never been paid one dime for failure. Yet, we are seeing CEO's of companies paying theirselves outrageous sums of monies in bonuses and perks, when their companies are failing.
Perhaps, this money could be used to re-employ some of the thousands laid off during this economical crises. That thought probably never crossed the CEO mind set. I am outraged and congress should not pay one more dollar to companies who's CEO's are receiving anything for their falure. Instead they should demand the removal of that CEO.
Pretty funny that Barney Frank, who is one of the ringleaders of the mortgage mess, is grilling bankers. Barney Frank needs to be grilled on how he forced banks to make loans to low income families who could never afford them. He also needs to explain why he fought the Bush Administration, who wanted to tighten regulation on Freddy and Fannie Mac more thna 2 years ago. His contributiions from Freddy and Fannie Mac need to see the light of day too.
Capt. Smash February 11th, 2009 9:13 am ET
The stimulus package is a good thing that will bring more money into the market place and create jobs! The people that get these jobs will buy homes, products, goods and services. That will create more jobs and more jobs and so on.
That statement proves you probably do even know what's in it. Looser
I really like Obama, sounds like he's really FOR the people, OF the People, that's what we elect these people for.....But those clowns that he has to work with....well, I can't say a good thing about them, so I won't say anything, I guess....But, the thing is this: The people Elected them, they just didn't get into office by theirselves !
ABC News > Feb 2nd, 2009 >
Bailed-out Bank of America spent $10 million on Super Bowl party.»
Just weeks ago, the federal government extended $20 billion to Bank of America to keep it afloat. The bank refused to tell ABC News how much it is spending as an NFL corporate sponsor, but insiders have put the figure at close to $10 million. >>
THIS IS OPEN AND SHAMELESS CORRUPTION
THIS IS A CRIME TO MISUSE PUBLIC MONEY
crusty old barney frank and his band of robbers are grilling the banks ,,, excuse me they are the one who got us in this mess to begin with
These people claim that they have not used the bailout money for perks or lobbying, but what difference does it make if you take non bailout money to pay perks or lobbying but replace the used money with bailout money. It is the same result. Bush the Son did not want accountability and is there no accountability.
Why is Barney Frank still employed? I recall watching a youtube video of Barney Rubble from 2004 believing Fannie-Mae and Freddie-Mac were doing fine and the Republicans were exaggerating the problems. Oops.
I just love the way CNN cuts off comments about this gruesome bunch of democrats–Pelosi, Frank, Dodd and Reid. Thanks alot CNN for being the station of liberals–no wonder you are losing viewers!
The Issue is the banks have not lent money as they should. The CEOs should be made to defend what they are doing with the dollars given to them. Restrictions and monetary payback must be taken with the banks. If this is done, then more money will begin to circulate within the economy.
I'm certainly not a big fan of government intervention in private business, but as a small manufacturing business owner who just this month was given a $100,000 loan for equipment expansion from Wells Fargo when two other banks I do business with turned me away, I want to put one good note out there for them. They are helping us to create a couple more jobs now and hopefully many more later. Thank you, Wells Fargo for your support.
Kimberly February 11th, 2009 10:15 am ET Gee, it must be nice in your la-la world. Back around 2005 or so, while you were probably trying your best to be Paris Hilton's wannabe BFF, people like Frank, Dodd, Schumer, and Waters were letting Fannie and Freddie get away with murder. THEY were the ones who let F & F run wild. And then, when the tower crumbled, they turned around and blamed Bush. And idiots like you believed them.
2011 – New, Republican led Congress
2013 – New, Rupublican President
Yes we can? – NO YOU COULDN'T
What's really ashame is these CEO's are getting this money, it's being broadcast on the news and none of them are being arrested for stealing. Why cant criminal charges be bought against all of the people who got our money and used it for their own good?
More than 1 bank has already tried to pay back the TARP money, the only problem is that Geithner and the democrats won't let them. The demopcrats want the power, not the money.
Sniffit February 11th, 2009 10:09 am ET
. . . They are BANKS. They are in teh business of lending money . . .
They're also in business to get their loans paid back. See the problem?
You people blasting the CEO's need to get your priorities straight–the senators grilling them do nothing but steal your money-and you want THEM to cuff the CEO"S? By the way, Obama is the senator's boss–not the other way around–so please stop saying he is an innocent vivtim–Theater ofthe absurd–crooks interrogating cheats.
Interesting points. Is it anyone's buisness how they use the money, so long as it gets paid back? Well, look at standard lending practices and see what the facts say.
If I get a buisness loan, chances are that not only do I have to show that I can make the payments, but I have to show my books to prove that I can and currently am turning a profit. Now, the bank can't tell me how to run my buisness, but they can call in that loan whenever if things aren't going well.
I guess I can see where folk might get upset, but I also believe that they can spend the money on whatever, just so long as the loan is paid off.
As far as the lending fears go, that is a bunch of BS. I'll tell you this much, show me a bank that is scared to lend and I'll bet you his competitor will. And if there is no one out there willing to loan money, I say start a temporary national bank that lends at a flat rate. You'll see a return the likes of which will MAKE these banks get their acts together.
What part of "Get a rope!" is inappropriate here? Accountability continues to be non-existant in the Bush-mentality era. Mr. Obama needs to send a few of these leeches to jail for a very long time. They are crooks, liars and worse. Why should they be giving out bonuses, going off on luxury trips and drawing huge salaries while their businesses are going under? They want taxpayer monies? Then they operate under the dictates of the taxpayers.
Thain should have his head stuck in his $30,000 toilet while it gets flushed...after he's beaten silly in an alley.