Published 6:50 pm Tuesday, December 30, 2008
Recent reports that some banks that received money as part of the bailout for the nation’s financial sector are not telling how they’ve spent some or all of their bailout funds is disturbing. What is even more disturbing is that some banks’ spokesmen are saying they do not know how their banks are spending or have spent all or part of their bailout money.
The American taxpayers, who provided that bailout money, have the right to know how that money is being spent. Those American taxpayers and the legislators who approved those bailout bucks must demand the recipients of those billions of dollars be accountable for those billions.
With any government-provided (read taxpayer-provided) bailout, there should be and must be a requirement that any recipient of bailout dollars keep a detailed record of how that money is spent. There is no doubt there are some people and companies viewing those billions of dollars as a pool into which they want to dip their greedy fingers. They probably believe that with all those billions of dollars out there, no one will miss $1 million here or $1 million there.
Would Joe the Plumber’s bank let him borrow money without him saying what he planned to do with it? Of course, not. But when banks “borrow” money from American taxpayers, they do not feel the need to say how they are spending that money.
That’s not right.
While some banks acknowledge they cannot track exactly how they are spending their bailout bucks, some banks will not even talk about it.
Last week, a spokesman for JPMorgan Chase, which received $25 billion in bailout funds, told The Associated Press that while some of that money was lent, some was not, and the bank had not given any accounting of just how the money is being used.
With that attitude, how about the American taxpayer declining to provide a banks bailout in the future, should such a need arise again.
The Associated Press polled 21 banks that received at least $1 billion in bailout bucks, asking each of them the following four questions:
Not one bank provided specific answers to those questions, according to The Associated Press.
Such response, or lack of response, by those banks does little to bolster the public’s confidence in those banks spending their bailout bucks in ways that will help the most people. The banks’ attitude may cause taxpayers’ confidence in those banks to erode and result in taxpayers wondering what those banks are hiding.
Those banks may be hiding nothing. If the banks are spending their bailout bucks properly, then why not let the world know that?
Barry Koling, spokesman for SunTrust Banks Inc., the Atlanta-based bank that received $3.5 billion in bailout bucks, said that bank is not “providing dollar-in, dollar-out tracking.”
Other banks acknowledged they did not know where their bailout bucks were going.
That bailout money, according to lawmakers in Washington, D.C., should be loaned so it can circulate in a suffering economy, not hoarded or spent on junkets, corporate bonuses and to buy other banks, according to the AP report. There is no process in place to ensure that happens, and there are no consequences for banks that don’t follow the wishes of the lawmakers.
There should be such a process. There should be consequences for banks that spend their bailout bucks irresponsibly.
American taxpayers must demand it. Lawmakers must meet that demand.
As for the banks who received bailout bucks, it is time they account for every dollar they received. If they don’t do that, let them sink or swim on their own the next time they are in stormy financial waters.