JOINS IN SENDING LETTER TO SECRETARY PAUSLON REGARDING IMPLEMENTING THE BAILOUT AND MEANS FOR PROTECTING TAXPAYERS

Washington, Nov 12, 2008 - “As more and more companies such as automobile manufacturers and American Express seek financial assistance from the American taxpayers, it is vital that Congress set conditions to protect taxpayers and to strengthen the markets,” said Rep. Cliff Stearns (R-Sixth). “We must insist on accountability and frugality from those getting federal help.” Stearns also today joined in sending a letter* to Treasury Secretary Paulson regarding the mechanics of the bailout and the difficulties in implementing it effectively.

“There is no reason for these private companies to receive a large infusion of government funding without them sharing in the sacrifice,” added Stearns. “As many people lose their jobs, AIG, which is being supported by the taxpayers, wasted thousands of dollars on an executive retreat. In addition, when the federal government bailed out Chrysler, the company’s chairman, Lee Iacocca, took $1 a year in salary. Taxpayers and those with 401(k)s should not be the only ones to carry this burden; the management and executives of these firms should forego business as usual. Congress should set criteria for these companies that limit dividends, restrict executive pay, and eliminate bonuses and other perks.”

In addition to urging Congress to set standards for companies benefiting from a bailout, Stearns shared specific concerns in a letter to Secretary Paulson. The letter states, “In unsettled times, taxpayers have a right to expect that government actions will have real, measurable and positive effects on the economy without subjecting the nation to a spate of runaway spending.” The letter contains 11 specific questions for Paulson on such issues as the criteria in selecting asset managers, standards for preventing conflicts of interest, efforts to prevent cost overruns by contractors, and the reason behind keeping secret the identity of the banks receiving federal assistance.

“If the Treasury were to commit government funds without getting sacrifice and restructuring in return from these companies, it would be throwing good money after bad,” added Stearns. “Congress must exercise appropriate oversight to safeguard the interests of the American taxpayer.”

* Text of letter