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October 20, 2011

Oh My: Three Obama-Connected Fed Directors Benefited From Bailouts

Well, I mean, we all benefited from the bailouts, right?

But I mean these guys benefited more than most.

Multiple directors or former directors of the Federal Reserve banks who played a key role in the 2008 bailouts had an apparent conflict of interest, according to a Government Accountability Office (GAO) report. These directors had business relationships with companies and banks that received large infusions of government money.

The office of Sen. Bernie Sanders, I-Vt., who caucuses with the Democrats, noted that the report did not name any names, "but unambiguously described several individual cases involving Fed directors that created the appearance of a conflict of interest." The group of 18 people connected to both the Federal Reserve and a bailed out company included: the CEO of General Electric, Jeffrey Immelt (who is now President Obama's jobs czar); Stephen Friedman of Goldman Sachs Group Inc.; and Jamie Dimon, the CEO of JP Morgan Chase.

Here's Jamie Dimon's connection to Obama, per Wikipedia:

Federal TARP Funds As JPMorgan Chase's Chairman, President & CEO, Dimon oversaw the transfer of $25 billion in bailout funds from the US Treasury Department to JPMorgan Chase on October 28, 2008 via the Troubled Asset Relief Program (TARP).[16] This was the fifth largest amount transferred under Section A of TARP[17] to help troubled assets related to residential mortgages. It has been widely reported [18] that JPMorgan Chase was in much better financial shape than other banks and did not need TARP funds but accepted the funds because the Government did not want to single out only the banks with capital issues. JPMorgan Chase advertised in February 2009 that they would be using their capital base monetary strength to acquire new businesses,[19] ....

Of the US's nine largest banks, JPMorgan Chase was arguably the second healthiest bank, and did not need to take TARP funds. In order to encourage smaller banks with troubled assets to accept this money, Treasury Secretary Henry Paulson allegedly coerced the CEOs of the nine largest banks to accept TARP money under short notice.[21] JPMorgan Chase was also the first of the largest banks to repay the TARP money.

Relations with the Obama Administration

Dimon is a Democrat and worked in Obama's adopted hometown of Chicago. After Obama took office and JPMorgan Chase repaid its bailout money more quickly than most, he became influential in the White House,[22] although Dimon has often publicly disagreed with some of Obama's policies.[23] Dimon was one of three CEOs found by the Associated Press—along with Lloyd Blankfein and Vikram Pandit—to have had liberal access to United States Secretary of the Treasury Timothy Geithner in the seven months after the financial crisis in fall 2008.[24]

As for Friedman, not only is Goldman Sachs Obama's biggest contributor, and not only is the Obama Administration infested with so many Goldman Sachs people that Goldman almost is the government, but he personally served in the Obama Administration, too, as chairman of Obama's Foreign Intelligence Advisory Board.

He's long been called out as having benefited from the bailouts. Again, from Wikipedia:

On May 7, 2009 Friedman resigned as Chairman of the Federal Reserve Bank of New York in response to criticism of his December 2008 purchase of $3 million of stock in Goldman Sachs.Friedman, who remains a member of Goldman Sachs’ board, came into violation of Federal Reserve policy when Goldman was converted to a bank holding company in September 2008, thereby placing it under the regulatory authority of the New York Fed. Friedman requested a waiver from this violation when the conversion occurred, which was granted roughly two and a half months later.

Although these three are Obama cronies, I have no doubt a lot of Republican-affiliated people are implicated somewhere here.

The whole damn thing is crooked.


Thanks to RDBrewer.


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posted by Ace at 03:45 PM

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