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CAMPAIGN LAUNCH: Tell Congress “No More Dough Till We Know Where It Goes”

Tell members of Congress that you want them to take action here. I will be delivering your comments to Congress in the coming week.

In an interview published in yesterday’s New York Times, President Obama says that it could take another $750 billion to bail out the banks beyond the $700 billion already approved. Yet serious questions surround the money already distributed to Wall Street, and attempts to determine how it was disbursed have been stonewalled.


• At a January 13 House Financial Services Committee meeting, Rep. Alan Grayson asked Fed Vice Chair Donald Kohn to provide the names of the banks that received $1.2 trillion from the Fed since September 2008. As you can see in the Youtube above, Kohn refused. Chairman Barney Frank promised to hold hearings to look into this, but none have been scheduled.

• Republican and Democratic Senators alike, from Richard Shelby and Jim Bunning to Chris Dodd, last week demanded that Kohn supply the names of the banks that got $50 billion in taxpayer dollars that went out through AIG to pay off its derivative trading partners at the full value of their contracts, shielding them from any losses despite the fact that those values had tumbled. Again, Kohn refused.

Bloomberg estimates that since the crisis began, the government has spent more than $11.7 trillion in the form of government loans, spending or guarantees to save the financial system. Bloomberg has filed numerous suits under the Freedom of Information Act, which requires federal agencies to make government documents available to the press and public, to learn where this money went. The Fed refuses to comply.

• Timothy Geithner’s bad bank funding plan is, according to David Simon, essentially the plan that Goldman Sachs has been shopping around for months. Goldman’s CEO Lloyd Blankfein was the only one representing a financial firm at the September meeting when the decision was made to bail out AIG. We now learn that Goldman was one of the big recipients of the AIG back door money dump. Says economist Nouriel Roubini: "let us not kid each other: The $162 billion bailout of AIG is a nontransparent, opaque and shady bailout of the AIG counter-parties: Goldman Sachs, Merrill Lynch and other domestic and foreign financial institutions."

• The House passed the TARP Reform and Accountability Act on January 16, which would provide increased conditions, transparency and accountability for Wall Street bailout funds. The Senate is refusing to take up the legislation.

• Even as banks are receiving federal bailout money, they are gouging credit card holders to squeeze them for profits during tough economic times and spending taxpayer dollars to successfully lobby against reform.

• The conflict of interest involved when bond ratings agencies like Moody’s are paid by the issuers of securities whose creditworthiness they are rating is tremendous. It played a huge part in the current economic collapse as AAA ratings were given out to mortgage-backed securities that nobody would have bought otherwise. But the SEC says there are no plans to make these kinds of structural reforms.

As Yves Smith says, "Wake up and smell the coffee. The public purse is being looted and we the great unwashed are being fed pablum. Just because the perps work for once esteemed institutions and are typically treated with deference does not change the nature of the undertaking."

Before Congress approves any more funds, the public needs to know where all our money has gone. The government needs to tell us what happened to the AIG money and open the books on its other lending facilities. They need to move swiftly to re-regulate a system whose rules have been written by bank lobbyists for their own benefit, and until they do, there will be no public confidence in our financial system. Restoring that trust is critical in getting our economy back on its feet, and additional funds should be forthcoming until that happens.

We’ll be having guests on FDL to talk about their views on the need for transparency this week. Scheduled so far:

  • TUESDAY 7 pm ET: Alan Grayson, (D-FL), member of the House Financial Services Committee
  • TUESDAY 4:30pm ET: Economist James K. Galbraith, who holds the Lloyd M. Bentsen, Jr. Chair of Government/Business Relations at the Lyndon B. Johnson School of Public Affairs, the University of Texas at Austin. He is the author of The Predator State: How Conservatives Abandoned the Free Market and Why Liberals Should To.
  • THURSDAY 3:30pm ET: David Cay Johnston, Pulitzer Prize-winning New York Times former reporter and author of Free Lunch: How the Wealthiest Americans Enrich Themselves at Government Expense [and Stick You with the Bill]
  • THURSDAY: Mark Pittman, Bloomberg News (finance journalist who has covered the collapse — Bloomberg has filed many FOIA requests and done tremendous work on transparency)
  • FRIDAY 11am ET: Economist Rob Johnson, formerly a managing director at Soros Funds Management and chief economist of the Senate Banking Committee.
  • TBA: Yves Smith, financial blogger ("Naked Capitalism") who currently heads Aurora Advisors, a New York-based management consulting firm. She has written for The New York Times, The Christian Science Monitor, Slate, The Conference Board Review, Institutional Investor, The Daily Deal and the Australian Financial Review.
  • TBD: Dean Baker, co-director of the Center for Economic and Policy Research in Washington, DC. He is frequently cited in economics reporting in major media outlets, including the New York Times, Washington Post, CNN, CNBC, and National Public Radio. He writes a weekly column for the Guardian Unlimited (UK), and his blog, Beat the Press, features commentary on economic reporting.

Tell members of Congress that you want them to take action here. I will be delivering your comments to Congress in the coming week.

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Jane Hamsher

Jane Hamsher

Jane is the founder of Her work has also appeared on the Huffington Post, Alternet and The American Prospect. She’s the author of the best selling book Killer Instinct and has produced such films Natural Born Killers and Permanent Midnight. She lives in Washington DC.
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