Big spending Senator John Kerry seeks to outlaw “lavish” spending by TARPed banks
Posted by danishova on February 25, 2009
Northern Trust Corp took a pounding on Tuesday from U.S. lawmakers who said the bank must repay millions of taxpayer bailout dollars spent on "lavish parties" during a Southern California golf tournament.
The Chicago-based bank’s sponsorship of the expensive bash prompted Sen. John Kerry, a Massachusetts Democrat, to say he will introduce a bill this week to end "extravagant spending practices of U.S. banks" that receive taxpayer bailouts.
"I’m sick and tired of picking up the newspaper and reading about another idiotic abuse of taxpayer money, while our country is on the brink," Kerry said in a statement.
Wow! Could Senator Kerry be having second thoughts about the “stimulus package”? Maybe he finally took a moment to read it, after voting in favor of it? Perhaps he disagrees with Sen. Schumer’s claim that Americans don’t care about little porky amendments? How else to explain Kerry’s sudden embrace of responsible spending? Hey! Maybe Kerry will come to the decidedly unlavish tea parties that are being thrown to protest ‘abuses of taxpayer money’ at various locations all around the country. Be sure to bring Teresa!
Kerry plans to introduce legislation targeting banks that got taxpayer assistance under the government’s $700 billion Troubled Asset Relief Program (TARP). Chicago-based Northern Trust received $1.6 billion under TARP.
Democratic lawmakers in the House of Representatives, led by Barney Frank, chairman of the Financial Services Committee, demanded Northern Trust repay the cost of festivities that surrounded last week’s Northern Trust Open at the Riviera Country Club in Pacific Palisades, California.
"This behavior demonstrates extraordinary levels of irresponsibility and arrogance," wrote Frank and 17 other Democrats in a letter to Northern Trust CEO Frederick Waddell.
Woo Hoo! Barney Frank is on board too! Would that would be the same Gamblin’ Barney Frank who said this at a House Financial Services Committee hearing on Fannie & Freddie on Sept. 10, 2003?:
I want to roll the dice a little bit more in this situation towards subsidized housing. . .
Back to the story:
"This is the second year Northern Trust is sponsoring the Open as part of a five-year contract. The contract was signed in the fall of 2007 — a year before the U.S. government’s Capital Purchase Program (under the TARP) existed."
The bank had a Contract? Who cares? This is a new dawn, a new day, and there’s a new Sheriff in town.
The bank said it is healthy and did not seek TARP aid, but entered the program at the government’s request. It said TARP "funds are not allocated to operating expenses, including marketing, advertising, corporate sponsorship or charitable activities. These are funded through our normal cash flow."
Asked about Northern Trust’s statement that it did not seek TARP aid, Frank said on a CNBC television business news program: "If they didn’t want the money, and didn’t need the money… then pay the money back."
Who knows? At this rate Kerry and Franks will be demanding that Franklin Raines and Jamie Gorelick repay taxpayers for the gazillions they got from Fannie Mae (after assuring us that everything was just peachy keen) and going on to cook the books so they could collect hefty bonuses ? Surely Congresss will hold hearings about this chapter in the housing fiasco any day now!
Under Kerry’s legislation, which would take effect on March 1, a TARP recipient could not "host, sponsor, pay for conferences and events and pay for holiday or entertainment events for the year in which they receive TARP funds."
A waiver could be sought under some circumstances. A violation would require a TARP recipient to reimburse the government for the cost of the event and pay a fine.
Jeez, that’s some serious belt-tightening Kerry’s demanding there. No conferences even? Oh well, I guess if they call it a “retreat” it might be okay. Of course, we’ll have to see if “experts” believe it’s constitutional for the Federal Government to dictate the business activities of these private banks in the first place.
Heck, maybe someone will actually read the legislation this time around.