Sanders Releases Explosive Bailout List

Sen. Bernie Sanders (I-Vt.). (photo: WDCpix)
Sen. Bernie Sanders (I-Vt.). (photo: WDCpix)

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Sen. Bernie Sanders, Reader Supported News

13 June 12

ore than $4 trillion in near zero-interest Federal Reserve loans and other financial assistance went to the banks and businesses of at least 18 current and former Federal Reserve regional bank directors in the aftermath of the 2008 financial collapse, according to Government Accountability Office records made public for the first time today by Sen. Bernie Sanders.

On the eve of Senate testimony by JPMorgan Chase CEO Jamie Dimon, Sanders (I-Vt.) released the detailed findings on Dimon and other Fed board members whose banks and businesses benefited from Fed actions.

A Sanders provision in the Dodd-Frank Wall Street Reform Act required the Government Accountability Office to investigate potential conflicts of interest. The Oct. 19, 2011 report by the non-partisan investigative arm of Congress laid out the findings, but did not name names. Sanders today released the names.

“This report reveals the inherent conflicts of interest that exist at the Federal Reserve.  At a time when small businesses could not get affordable loans to create jobs, the Fed was providing trillions in secret loans to some of the largest banks and corporations in America that were well represented on the boards of the Federal Reserve Banks.  These conflicts must end,” Sanders said.

The GAO study found that allowing members of the banking industry to both elect and serve on the Federal Reserve’s board of directors creates “an appearance of a conflict of interest” and poses “reputational risks” to the Federal Reserve System.

In Dimon’s case, JPMorgan received some $391 billion of the $4 trillion in emergency Fed funds at the same time his bank was used by the Fed as a clearinghouse for emergency lending programs. In March of 2008, the Fed provided JPMorgan with $29 billion in financing to acquire Bear Stearns. Dimon also got the Fed to provide JPMorgan Chase with an 18-month exemption from risk-based leverage and capital requirements. And he convinced the Fed to take risky mortgage-related assets off of Bear Stearns balance sheet before JP Morgan Chase acquired the troubled investment bank.

Another high-profile conflict involved Stephen Friedman, the former chairman of the New York Fed’s board of directors. Late in 2008, the New York Fed approved an application from Goldman Sachs to become a bank holding company giving it access to cheap loans from the Federal Reserve. During that period, Friedman sat on the Goldman Sachs board.  He also owned Goldman stock, something that was prohibited by Federal Reserve conflict of interest regulations. Although it was not publicly disclosed at the time, Friedman received a waiver from the Fed’s conflict of interest rules in late 2008. Unbeknownst to the Fed, Friedman continued to purchase shares in Goldman from November 2008 through January of 2009, according to the GAO.

In another case, General Electric CEO Jeffrey Immelt was a New York Fed board member at the same time GE helped create a Commercial Paper Funding Facility during the financial crisis. The Fed later provided $16 billion in financing to GE under this emergency lending program.

Sanders on May 22 introduced legislation to prohibit banking industry and business executives from serving as directors of the 12 Federal Reserve regional banks.

To read a report summarizing the new GAO information, click here.


Jamie Dimon Is Not Alone

During the financial crisis, at least 18 former and current directors from Federal Reserve Banks worked in banks and corporations that collectively received over $4 trillion in low-interest loans from the Federal Reserve.

US Senator Bernard Sanders (I-Vt.)
Washington, DC
June 12, 2012

    1. Jamie Dimon, the Chairman and CEO of JP Morgan Chase, has served on the Board of Directors at the Federal Reserve Bank of New York since 2007. During the financial crisis, the Fed provided JP Morgan Chase with $391 billion in total financial assistance. JP Morgan Chase was also used by the Fed as a clearinghouse for the Fed’s emergency lending programs.In March of 2008, the Fed provided JP Morgan Chase with $29 billion in financing to acquire Bear Stearns. During the financial crisis, the Fed provided JP Morgan Chase with an 18-month exemption from risk-based leverage and capital requirements. The Fed also agreed to take risky mortgage-related assets off of Bear Stearns balance sheet before JP Morgan Chase acquired this troubled investment bank.
    1. Jeffrey Immelt, the CEO of General Electric, served on the New York Fed’s Board of Directors from 2006-2011. General Electric received $16 billion in low-interest financing from the Federal Reserve’s Commercial Paper Funding Facility during this time period.
    1. Stephen Friedman. In 2008, the New York Fed approved an application from Goldman Sachs to become a bank holding company giving it access to cheap Fed loans. During the same period, Friedman, who was chairman of the New York Fed at the time, sat on the Goldman Sachs board of directors and owned Goldman stock, something the Fed’s rules prohibited. He received a waiver in late 2008 that was not made public. After Friedman received the waiver, he continued to purchase stock in Goldman from November 2008 through January of 2009 unbeknownst to the Fed, according to the GAO. During the financial crisis, Goldman Sachs received $814 billion in total financial assistance from the Fed.
    1. Sanford Weill, the former CEO of Citigroup, served on the Fed’s Board of Directors in New York in 2006. During the financial crisis, Citigroup received over $2.5 trillion in total financial assistance from the Fed.
    1. Richard Fuld, Jr, the former CEO of Lehman Brothers, served on the Fed’s Board of Directors in New York from 2006 to 2008. During the financial crisis, the Fed provided $183 billion in total financial assistance to Lehman before it collapsed.
    1. James M. Wells, the Chairman and CEO of SunTrust Banks, has served on the Board of Directors at the Federal Reserve Bank in Atlanta since 2008. During the financial crisis, SunTrust received $7.5 billion in total financial assistance from the Fed.
    1. Richard Carrion, the head of Popular Inc. in Puerto Rico, has served on the Board of Directors of the Federal Reserve Bank of New York since 2008. Popular received $1.2 billion in total financing from the Fed’s Term Auction Facility during the financial crisis.
    1. James Smith, the Chairman and CEO of Webster Bank, served on the Federal Reserve’s Board of Directors in Boston from 2008-2010. Webster Bank received $550 million in total financing from the Federal Reserve’s Term Auction Facility during the financial crisis.
    1. Ted Cecala, the former Chairman and CEO of Wilmington Trust, served on the Fed’s Board of Directors in Philadelphia from 2008-2010. Wilmington Trust received $3.2 billion in total financial assistance from the Federal Reserve during the financial crisis.
    1. Robert Jones, the President and CEO of Old National Bancorp, has served on the Fed’s Board of Directors in St. Louis since 2008. Old National Bancorp received a total of $550 million in low-interest loans from the Federal Reserve’s Term Auction Facility during the financial crisis.
    1. James Rohr, the Chairman and CEO of PNC Financial Services Group, served on the Fed’s Board of Directors in Cleveland from 2008-2010. PNC received $6.5 billion in low-interest loans from the Federal Reserve during the financial crisis.
    1. George Fisk, the CEO of LegacyTexas Group, was a director at the Dallas Federal Reserve in 2009. During the financial crisis, his firm received a $5 million low-interest loan from the Federal Reserve’s Term Auction Facility.
    1. Dennis Kuester, the former CEO of Marshall & Ilsley, served as a board director on the Chicago Federal Reserve from 2007-2008. During the financial crisis, his bank received over $21 billion in low-interest loans from the Fed.
    1. George Jones, Jr., the CEO of Texas Capital Bank, has served as a board director at the Dallas Federal Reserve since 2009. During the financial crisis, his bank received $2.3 billion in total financing from the Fed’s Term Auction Facility.
    1. Douglas Morrison, was the Chief Financial Officer at CitiBank in Sioux Falls, South Dakota, while he served as a board director at the Minneapolis Federal Reserve Bank in 2006. During the financial crisis, CitiBank in Sioux Falls, South Dakota received over $21 billion in total financing from the Federal Reserve.
    1. L. Phillip Humann, the former CEO of SunTrust Banks, served on the Board of Directors at the Federal Reserve Bank in Atlanta from 2006-2008. During the financial crisis, SunTrust received $7.5 billion in total financial assistance from the Fed.
    1. Henry Meyer, III, the former CEO of KeyCorp, served on the Board of Directors at the Federal Reserve Bank in Cleveland from 2006-2007. During the financial crisis, KeyBank (owned by KeyCorp) received over $40 billion in total financing from the Federal Reserve.
  1. Ronald Logue, the former CEO of State Street Corporation, served as a board member of the Boston Federal Reserve Bank from 2006-2007. During the financial crisis, State Street Corporation received a total of $42 billion in financing from the Federal Reserve.
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12 Responses to Sanders Releases Explosive Bailout List

  1. Balance says:

    After all this what is going to happen, NOTHING, they will find their way out of this and THINK they are getting away with all this, Oh the web of deceit they entangle themselves in. Glad it’s not me, I will pray for them to see the light and realize the hardships they have caused people, there is a lesson in here somewhere , but for who?

  2. Lana says:

    wow, this is more gasoline for the fire.

  3. Pingback: JP MORGAN LYING TO CONGRESS; STEALING YOUR BENEFITS.. | Unbiased TRUTH

  4. Pingback: RSN – (Senator) Sanders Releases Explosive Bailout List – 14 June 2012 | Lucas 2012 Infos

  5. White Feather says:

    Now comes the interesting part…not whether this is treason or even just really bad abuse of American law…But with the corporations controlling every aspect of government…who if anyone other than a few isolated senators are going to do anything about this…and if they do…what branch of government is going to enforce their will.

  6. Debbie says:

    http://www.huffingtonpost.com/2012/06/13/obama-trade-document-leak_n_1592593.html?icid=maing-grid7%7Cmain5%7Cdl3%7Csec1_lnk3%26pLid%3D169383

    whoever is leaking docs from the WH leaked a realy beauty today….don’t see how Obama can spin his way out of this one…..high treason? I think so……………

    • Stunned at Sunset says:

      Sister, Debbie,

      ” But foreign corporations operating within the U.S. would be permitted to appeal key American legal or regulatory rulings to an international tribunal. That international tribunal would be granted the power to overrule American law and impose trade sanctions on the United States for failing to abide by its rulings.”

      The act of “arranging” the abrogation of U.S. Federal Law is an act of High Treason against the people and their Congress (government). What the hell was this guy thinking? Again, that post at Half Past Human seems to be getting it right. Here we have Senator Sanders tying a millstone around the figurative neck of the banking industry and tossing them in to see if they’ll float. Next, you come along with a post that poses the President of the United States as the quintessential “Crazy!”

      What happened in 2008? Perhaps, in the process of disengaging, the ONE might have empowered the insane among us to move into positions of command and control that would inevitably undermine “command” and careen completely out of “control.”

      Is it just me? Or are these events actually the stuff that figments are actually made of?

      Love and Light,
      SaS :o

  7. Hi Jean,
    I posted this Huffington Post link on one of your previous finance articles. It shows how the Fed Bailout was really more like $29 trillion so far!

    http://www.huffingtonpost.com/l-randall-wray/bernankes-obfuscation-con_b_1147291.html

    ps. Jean I am struggling with Reality vs Trying to Vision a Better Timeline! I am refusing to cash in my paper assets and move to precious metals (left brain fear of pending economic collapse) and right brain belief that I am putting more weight to that possibility if I act out of fear. Even taking some money out of the bank in case of short term bank outages and other post crash scenarios seems like accepting that the Crash Will Happen. Any advice on how best to reconcile both emotions?
    Thanks LSA

    • Alan says:

      May I suggest that you look at the traditional definition of “money”? I find this helpful. In the US Coinage Act of 1792 the dollar was defined as a specific weight of silver. Dollar was a unit of weight! Today we have digital tokens automatically deposited into our bank accounts, and that’s not real money to me– it’s an insult to my intelligence. :) The Roman emperors had never even envisioned paper money– the most they could do was debase the silver currency with copper content slowly so people wouldn’t get upset– over generations the denarius was changed from silver into a silver-plated copper coin!

      For me, investing in a little bit of silver is not out of fear, but out of understanding that things are changing for the better. It is, for me, putting my “money where my mouth is.” This era of “fiat money”, unprecedented in human history, will quickly pass away. Soon we will have money of actual value once again! We will get to do real work in exchange for payment in an item of equivalent value! And of course, money will soon become unnecessary. Until then, I use silver coins as an object lesson to help educate people about the true meaning and value of money, trying to get them excited about the upcoming changes! I hope this is somehow helpful since your question is a very good one.

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