Economic Rescue Package Should Not Fund Bank Acquisitions, Executive Bonuses
Oct 29, 2008
Washington -
Congressman John Boehner (R-West Chester) today sent a letter to Treasury Secretary Henry Paulson, raising concerns about how some funds made available under the recently-enacted economic rescue package are being utilized by some financial institutions. Citing news reports highlighting one bank that is using funds from the Troubled Assets Relief Program (TARP) to purchase another bank and other reports indicating that some institutions have considered using TARP funds for employee pay raises and executive bonuses, Boehner noted that these types of expenditures were never described by the Treasury Secretary, or expected by Congress when the relief plan was sent to the President on October 3.
“Mr. Secretary, funds made available under the economic rescue package should not be used to pay for bank acquisitions, raises, and executive bonuses,” Boehner asserted. “These are not the types of expenditures you described during your many discussions on Capitol Hill earlier this fall, and these certainly are not the types of expenditures Members of Congress envisioned when the plan was sent to the President earlier this month.”
An Associated Press report published last weekend indicated that PNC Financial Services Group Inc. is acquiring Ohio-based National City Corp. in part by using funds received from the Treasury Department under TARP. Boehner also pointed to a separate Associated Press report published in recent days that indicates some institutions have considered using TARP funds to “give employees a raise and executives a bonus.”
“I must first ask if the Associated Press reports cited above – and countless others like them – are accurate,” Boehner wrote. “If so, what does the Treasury Department intend to do to ensure these types of expenditures do not occur under TARP?”
Boehner concluded, “On behalf of the families, seniors, small businesses, and all taxpayers, the Treasury Department must ensure that the implementation of this rescue package is focused on its intended purpose: Helping Main Street get back on its feet during today’s economic turmoil.”
Boehner’s letter to Secretary Paulson is available here.
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