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Inglis asks Paulson to use "look back " provision in bank aid

(November 12, 2008)

U.S. Rep. Bob Inglis sent a letter to U.S. Treasury Secretary Henry M. Paulson Wednesday, asking the Secretary to close loopholes that would enable firms seeking Emergency Economic Stabilization Act funds to pay out otherwise disallowed levels of compensation.

Inglis suggested using a “look back” mechanism to prevent an executive from cashing out just before the bank applied for the rescue plan.

Inglis referenced Gov. Mark Sanford’s earlier letter that mentioned Carolina First Bank and South Financial Group.

Medicaid’s “look back” provision prevents applicants from unloading personal assets in order to meet Medicaid qualifications standards for government assistance.

“I’m writing to ask you to close any loopholes that would allow companies to receive rescue plan funds, while still paying levels of executive compensation disallowed by the Emergency Economic Stabilization Act,” Inglis wrote.

“I suggest using your authority to prevent abuses of the system by instituting similar ‘look back’ requirements for banks receiving rescue plan funds.”

Click to view full letter sent from Inglis to Secretary Paulson.