Congress should reject Treasury Secretary Henry M. Paulson's request to release the second half of a $700 billion Wall Street bailout fund that has been shrouded in secrecy. In a statement issued by the Treasury Department on Friday, Paulson asserted that "it is clear…that Congress will need to release the remainder…to support financial market stability." Said Sanders: "It is inconceivable that we would provide another $350 billion to the banks - supposedly to ease credit - when they are refusing to tell us how they're spending the money they've already received." The senator said that many of the concerns that he voiced when he voted against the bailout on October 1 have turned out to be true.
"Given the incompetence of the Bush administration, there is no way I would give them another dime to throw at a program that he has been so miserably botched," Sanders said.
Banks have stonewalled efforts to track how taxpayer dollars are being spent. "We're choosing not to disclose that," a Bank of New York Mellon spokesman told The Associated Press. At JPMorgan Chase, which received a $25 billion bailout, a spokesman would not say exactly how the money is being used. "We have not disclosed that to the public. We're declining to," he said. There were similar responses from 21 banks that received at least $1 billion in government money.
The brazen evasions demonstrate the secrecy surrounding the Troubled Asset Relief Program that the Bush administration rammed through Congress two months ago. After initially telling Congress the fund would be used to purchase troubled bank assets, the Treasury Department unilaterally switched course and instead used the money to buy stock in U.S. banks.
Sanders said Secretary Paulson also has failed to keep financial institutions from squandering taxpayer funds on fat year-end bonuses or outlandish executive salaries like the one Paulson pocketed when he was CEO of Goldman Sachs. Paulson, Sanders said, "is part of the problem, not part of the solution."
Sanders cosponsored legislation with Sen. James Inhofe (R-Okla.) to require Congressional approval before the second half of the bailout fund can be released. Sanders also has proposed bills to ban bonuses for bankers and limit executive compensation. Sanders has also introduced legislation to rescind a regulation approved by Paulson which would give over $100 billion in tax breaks to banks.
To read The Associated Press article on bank stonewalling, click here.