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Grand Theft of TARP Money

January 13, 2009

Stolen Money

By Terry Smiljanich:

“Grand theft” is the stealing of property worth more than about $200 in most states. It is a felony, and can bring you up to five years in prison. So far, banks have received $350 billion in federal TARP bailout funds. That’s $1,167 in tax dollars from every man, woman and child in the country. This whole bailout is starting to feel a lot like grand theft.  Take the money and run!

When these bailout funds were authorized, amid great outcries of impending financial doom, the Administration and Congress in their collective wisdom decided to attach no strings to receiving these billions of dollars. After all, risky and unregulated financial markets got us into this mess, but we can trust them to take our money and spend it wisely to alleviate the crisis, right?

How did they spend this public money? When asked, these same banks told us to mind our own business. That’s right – they refuse to reveal exactly how they spent these public funds. Is your temperature rising yet?

Well, at least we know that they were in a huge financial hole, so they certainly had no profits to distribute to their investors, right? Wrong again. Let’s look at the incredible story.

Since these banks have gotten their mittens on our money, they decided to throw a party and distribute some more dividends to their investors. Just look at how the top five recipients of your TARP dollars spent some of that money:

  1. Citigroup got $25 billion. They then declared a dividend and distributed $3.5 billion to their shareholders.
  2. JP Morgan Chase & Co. got $25 billion. They then distributed $5.7 billion to their shareholders.
  3. Wells Fargo also got $25 billion. Shareholders then received dividends of $4.5 billion.
  4. Bank of America got $15 billion, and distributed $2 billion to its shareholders.
  5. Goldman Sachs (Secretary Paulson’s alma mater) got $10 billion and distributed almost $1 billion to its shareholders.

That’s just dividends. There’s also bonus money for a job well done by company executives, fancy corporate get-togethers at ritzy resorts, and who knows what else. After all, remember, they’re refusing to account to us where these billions went.

And as for the troubled homeowners who couldn’t pay their high mortgage payments, what tax dollars reached them? The government and banks announced with great fanfare new mortgage modification programs like Hope for Homeowners that promised to give some 400,000 relief. Guess what? To date, approximately 370 applications have been processed by banks in furtherance of this consumer benefit.

Now you know why we’ve connected these activities to the definition of “grand theft.” These banks just took more than $1,000 right out of your pocket. Do you care? It brings to mind that old English saying:

“They hang the man and flog the woman

Who steals the goose from off the Common;

But let the greater criminal loose

Who steals the Common from the goose.”

Written by Terry Smiljanich · Filed Under Where's the Outrage?, Where's the Outrage? by Terry