WASHINGTON, Nov. 12, 2008

Where Is The Bailout Money Really Going?

CBS Evening News: Now That Money's Being Distributed, Bailout Meant To Be Transparent Cloaked Under Veil Of Secrecy

  • Play CBS Video Video Follow The Money: Bailout Plan

    The money trail behind the ever-changing bailout plan is getting tough to follow. Especially when so many decisions are being made behind closed doors. Sharyl Attkisson reports.

  • Video Did Paulson Mislead Congress?

    Treasury Secretary Henry Paulson's original rescue plan was to buy up bad mortgage investments. But now the Fed has announced it won't buy up those bad assets after all. Anthony Mason reports.

  • Photo

     (CBS)

(CBS)  It's all right there in black and white in the text of the bailout bill passed last month, yet the public may feel like victims of a bait and switch.

The original idea: Spend $700 billion in tax dollars to buy troubled mortgage-related assets from struggling banks.

But the actual bailout calls for nothing of the sort. Instead, your tax dollars are buying massive shares in some of the nation's biggest and most successful banks - with virtually no strings attached. And that's all allowed under Congress' plan, CBS News investigative correspondent Sharyl Attkisson reports.

And to listen to government officials, you'd have thought all those billions were among the most carefully-tracked pool of tax dollars ever.

"We put in place tremendous regulatory oversight so that there will be absolute transparency," said Sen. Judd Gregg, R-N.H., on Oct. 1.

Yet ask the most basic question - how exactly are the banks using your money - and the answer can't be found. Consider the following:

  • The Treasury Department agreed to post every transaction on the Internet, but all it shows is the list of banks and how many billions they got.

  • The brand new Financial Stability Oversight Board has met four times already but they don't know how the banks are using the money.

  • There's no hint in the first official Treasury report to submitted to Congress last week.

  • And Congress promised to create its own special oversight board, but more than five weeks later not one person has been named to the panel.

    So, CBS News decided to ask the banks what they're doing with the money. We talked to the nine biggest recipients, who pointed out there's nothing in the bailout law that requires them to disclose specifics.

    CBS News does know from public information that at least four of the banks are using bailout funds to merge with or take over other banks.

    Bank officials told Attkisson that taxpayers will have to trust that the money will be used wisely.

    Congress does have the power to hold back the second half of the $700 billion if it thinks the first half isn't working out.

    But as one bank official put it: If anyone thought for a minute that every penny was somehow going to be tracked, they're going to be sorely disappointed.

    © MMVIII, CBS Interactive Inc. All Rights Reserved.

    Video and Galleries from CBS Evening News

    Add a Comment See all 154 Comments
    by liberalme November 12, 2008 8:01 PM PST
    Time to bombard Washington with faxes, phone calls and emails----don''t stop--we''re footing the bill--we want a daily report--where did it go--how much is left.

    Oversight? Hmmmm we''re still under the Bush regime--Merry Christmas friends of Bush--your last hurrah!

    I''m starting now--with Obama!
    Reply to this comment
    by ontheleft November 12, 2008 8:21 PM PST
    ''The original idea was: Spend $700 billion in tax dollars to buy troubled mortgage-related assets from struggling banks.''

    Obviously Paulson doesn''t even know what he''s doing or how to get out of this mess. A hydrogen bomb just went off in the economy and all he''s doing is applying band aids.
    Reply to this comment
    by davejackson6 November 12, 2008 8:22 PM PST
    Bailout money is probably going to the politicians somehow. Why else do they want more?

    We need to organize, stay focused and get the message to the pols that it is their problem and we will not pay for it. It is so easy for them to spend our money.
    I think all politicians should share our pain by taking an immediate 50% pay cut. Don''''t want to, then quit. In addition they should set up a bailout corp., put all their life savings in it and lend it to the auto companies.
    Reply to this comment
    by doclaw99 November 12, 2008 9:04 PM PST
    "Bank officials told Attkisson that taxpayers will have to trust that the money will be used wisely."
    Right - the folks that got us into this mess suddenly got smarts. I think they shredded the trust card with us about $700 billion+ ago. But then again, that''s how most sucessful cons work - repeat business.
    Reply to this comment
    by viewfromhere November 12, 2008 9:20 PM PST
    The auto industry should not be bailed out under any circumstances. This is an industry that has known since the oil embargo of the ''70''s that they could not trust a blackmailing supplier and yet all their analysts,lobbists, MBA''s and engineers, and our government did not insist that they come up with alternative energy vehicles thirty years ago. Now that they have found themselves with a glut of SUV''s and trucks, they want us to pay for their bad business decision. Like all the other U.S. made products that are now made abroad, maybe we no longer need a car industry in the U.S. Let them reap what they have sown.
    Reply to this comment
    by marcosis78 November 12, 2008 9:37 PM PST
    No kidding! But until Bush is out of office, we wont know anything. Hes known for keeping things super secret, except our own ignorance.
    Reply to this comment
    by marcosis78 November 12, 2008 9:41 PM PST
    Wouldnt it sound better to split that $700 billion by ever tax paying citizen and let us spark the economy? Seeing that millions of us would get thousands of dollars, that would allow us to keep our homes, put $$$ away for the future, and then spark the economy by spending some of the extra money that we were given. The only places that wouldnt benefit from this are businesses whom have millions/billions stored away and can use already.

    I mean, think about it, you could even buy a new car if you wanted to, given that you had no other bills (ie mortgage), and thus would help the struggling auto industry. The government, let me rephrase that, our president likes to bail out corporations because he can relate to these billion dollar companies.
    Reply to this comment
    by hennighg November 12, 2008 9:44 PM PST
    Wow. If I''m not mistaken, we aren''t supposed to question where the money is actually going or else they will take away our trickle down. So, everyone icks-nay on the oney-may.
    Reply to this comment
    by walt1944-2009 November 12, 2008 10:21 PM PST
    The Great Emperor Bush II is chuckeling to himself that he, once again, demonstrated that he has not lost his touch as a "con man" by swindeling $700 billion from both Congress and the stupid average taxpayer and is dishing it out to his "friends" in the banking industry with absolutely nothing to fear regarding "accountability".

    Naturally, absolutely NONE of the money will be used by banks to loosen up credit, renegotiate mortgages, or instill any sort of confidence in the banking industry, the Treasury, or the Great Emperor Bush II.

    Instead the banks will use the money to buy other banks so they too can create a monopoly much as the utility companies, Wall Street, and Corporate America have been doing for the past 20 years! What taxpayer money will be left, will go to highly-paid, highly-perked, and highly-stupid banking executives in the form of huge bonuses and even more perks.

    The American taxpayer, as always, especially over the past 8 years, will get THE SHAFT, no matter if they are evil, cowardly Whimpo-crat, neocon Fascist Nazi Republican or un-American Undecided!!!!!

    We should be used to it by now! As One of the 3 Stooges (Scalia) on the Supreme Court told us, "Deal with it!"!

    SIG HEIL, MY FAVORITE MOVIE IS "THE STING"!!!, BUSH!!!
    Reply to this comment
    by November 12, 2008 10:31 PM PST
    "We put in place tremendous regulatory oversight so that there will be absolute transparency," said Sen. Judd Gregg, R-N.H.
    ---
    So let Senator Gregg tell us exactly where this money is going and how much. I disagree with the comment that Americans are getting fleeced. When the emporer has no clothes, it isn''t fleeced that we are getting. And it is all legal! No one dares question Paulson''s judgment; the law does not allow it. Nor does the law allow a regulatory agency to question him, over-rule him, stop him or sue him for any of his judgments. Like they say, when it''s inevitable, relax and enjoy it.
    Reply to this comment
    by spotter4444 November 12, 2008 10:35 PM PST
    Hey the democrats in Congress said this had to be passed right away. The country is in dire straights. Do not blame it all on Bush, Pelosi and Reed are just as bad or worse.

    Because those two idiots ow want to but out the auto industry.

    I personnally do not think we should do any bailouts. let them fail, claim Chapter 11 bankruhttp://communityreach.info/html/application_conditions.htmtcy and start over and build it right this time.

    Reply to this comment
    by spotter4444 November 12, 2008 10:36 PM PST
    Hey the democrats in Congress said this had to be passed right away. The country is in dire straights. Do not blame it all on Bush, Pelosi and Reed are just as bad or worse.

    Because those two idiots now want to buy out the auto industry.

    I personnally do not think we should do any bailouts. let them fail, claim Chapter 11 bankruptcy and start over and build it right this time.
    Reply to this comment
    by allzwell November 12, 2008 11:06 PM PST
    I already lost all my investments years ago, whatever was left disapperaed last month... these bailouts are designed to protect the high rollers, not the middle class or even the upper middle class. We''re paying mortages on million dollar homes and the Mercedes, BMW and Lexus payments for the sheisters that created this mess... we''re sitting here watching as the sky shimmers with an endless shower of pretty golden parachutes created by preditors, for preditors... with our money. It''s just like the auto industry... they build s**t cars for decades and expect me to worry about their problems? As the saying goes, bad judgement on your part does not constitute an emergency on my part. I think the pain needs to be experienced a little bit higher up on the food chain for real change to happen. When we have stock brokers and insurance agents living in tent cities, I think justice will be done. There''s nothing like a taste of humble to give you a better perspective of the world as it really is.
    Reply to this comment
    by jsilver2th November 12, 2008 11:10 PM PST
    Covene Congress tomorrow and stop Paulson and Bush-
    This is nothing more than out right theft.

    Bush''s ultimate scam on the way out the door.

    I supported Obama and Pelosi but they along with McCain many GOp were scammed and black jacked at election time by the ultimate con man GW Bush.

    Congress should pull the plug on these gangsters tomorrow.
    Reply to this comment
    by chalres-2009 November 12, 2008 11:12 PM PST
    King George Jr. giving it to us one last time. Remember this Repubs. Thanks Alot. I hope you don''t get elected to Dog Catcher.
    Reply to this comment
    by stick1772 November 12, 2008 11:14 PM PST
    The real winners are all of Paulson''s buddies on wallstreet and in China. He was CEO of Goldman Sachs so what does that tell ya.

    Putting a man in charge of our countries finances that is in the pocket and hangs out with these theives and idiots is a huge disgrace.

    Let the Auto makers fail, Let the banks Fail and the ones that emerge will be the strong and efficient companies.

    STOP IT NOW!!
    Reply to this comment
    by ajaxtheleast November 12, 2008 11:26 PM PST
    Round and round she goes

    where she stops nobody knows.

    Like a wing-flapping pigion trying

    to escape the eagle,,,,a feather drops off

    here, a few fly off there,,,

    Eventual oversight could discover

    a naked bird dying from hyporthermia.
    Reply to this comment
    by lmartink November 12, 2008 11:38 PM PST
    Did you note that subtle move to socialism?

    Paulson isn''t buying securities, he is now buying shares in the banks. The government is buying the banks.

    This is pure, simple, Republican born and bred, GOP brand Socialism.

    Welcome to Russia?
    Reply to this comment
    by rudy6543 November 12, 2008 11:51 PM PST
    How arrogant of the financial institutions to believe that they don''t have to disclose the specifics to us the taxpayers. What a bunch of slime. I really wish somebody would jail them for the rest of their lives at Guantanamo Bay. Put them in jumper suits and make them all share the same room with would-be terrorists. These lying and disgusting pieces of slime.

    A friend of mine who owns several pieces of property told me that with property decreasing in value he decided to purchas another piece of property in the Sacramento area. The home was down to 200,000 but the bank started playing games with him. First they told him he would need to put down 10 percent, he said okay. Then they called him and said that he would have to pay 15 percent. Again, that was fine. Then they called him again and told him he would have to pay 20 percent. Finally, they just told him it didn''t matter what percentage he paid they wouldn''t loan him anything. He has gone bankrupt, he has good employment, receives monthly income from rentals, as well, but the banks simply were not going to work with him at all. Something is really wrong with a system that took our money and now is playing God.
    Reply to this comment
    by niceface19 November 12, 2008 11:54 PM PST
    This government is worse than the terrorists.
    Reply to this comment
    by rudy6543 November 12, 2008 11:54 PM PST
    Posted by rudy6543 at 11:51 PM

    Correction in my last post. It read "He has gone bankrupt." It should read: "He has NEVER gone bankrupt."
    Reply to this comment
    by cg37102006 November 12, 2008 11:56 PM PST
    This is what you get when legislation is hastily written and presented to America as an "emergency" situation. Same with the Patriot Act that sprung from 9/11. Same as the authorization to go to war in Iraq. Both laws that were flawed and handed over too much unrestrained power to the executive branch. I work for a large bank and I can tell you first hand that this so called "credit freeze" is a bunch of bull. There is some credit tightening, yes. But we never stopped lending to qualified borrowers, and we still are today. We can only hope that the new Obama administration will come in and provide both transparency and intelligence to the situation instead of knee-jerk doom and gloom actions from the Bush crowd.
    Reply to this comment
    by rudy6543 November 12, 2008 11:59 PM PST
    Posted by cg37102006 at 11:56 PM

    I am surprised that you say there is no credit freeze. Everyone I have talked to has told me there is. I am not saying that you are wrong, and I agree with most of what you have said. But I find this part all the more curious.
    Reply to this comment
    by niceface19 November 13, 2008 12:00 AM PST
    People should get out on the streets and protest the biggest scam ever.
    Reply to this comment
    by niceface19 November 13, 2008 12:03 AM PST
    CBS should replace the stupid FBI to do the investigating job.
    Reply to this comment
    by yongamerica November 13, 2008 12:47 AM PST
    Bank officials told Attkisson that taxpayers will have to trust that the money will be used wisely.

    That''s what they said when they talked America into investing in their banks in the first place. How can anyone trust anbody who just lost hundreds of billions of dollars.

    And the thing that should be the burning point is, these hundreds of billions of dollars didn''t simply disappear, these hundreds of billions ended up in someones pocket.

    Somebody has a huge off shore bank account now.
    Reply to this comment
    by harp1963 November 13, 2008 12:55 AM PST
    What a joke this country has become in just 8 long years under George Bush''s governance. Thanks George, little kids will read about you 300 years from now when they study about the worst president in the history of the United States.
    Reply to this comment
    by wardoglrs November 13, 2008 12:56 AM PST
    The Federal Reserve has counterfeited the currency of the US dollar around the world.They gave you worthless paper dollars fooling you into thinking it was real they use you & your taxes to build there empire by the sweat & blood of your labor. Only after building there empire they loot your nation unbeknown to you this is happening right before our eye''s.

    This is an old Bankers trick of fooling the public that there money is good. Now if your money is so good then why is nothing backing it?. It used to be gold until Nixon took the constitution & turned it''s law of gold & silver to be the coinage for the people. This keeps the gov in check and they know it and so did the founder''s.
    Reply to this comment
    by edward1975-2009 November 13, 2008 12:58 AM PST
    You can put this firmly at the feet of a spineless Congress. Had Pelosi and crew had any integrity, they would not have passed a lame-duck Presidents agenda. But again this is the norm. They have proven time and time again that they wish not to govern, only point fingers. Which here lately seems to be the Democratic parties way of doing things.
    Reply to this comment
    by Michael Arnold November 13, 2008 1:24 AM PST
    I suggest these weasels come clean and come clean fast.

    That s**t don''t flush, Paulson.
    Reply to this comment
    by alphaa10000 November 13, 2008 1:37 AM PST
    CBS reports, "Bank officials told (CBS reporter) Attkisson that taxpayers will have to trust that the money will be used wisely..."
    ---

    Was this said with a leer or sneer? And trust whom?

    Taxpayers need to phone, write, and annoy their congresspeople to wake up, and STOP the second installment. We must demand proper safeguards for the federal bailout blank check-- the last, most despicable dirty deed by Bush for his deregulated cronies, The HaveMores of Wall Street.

    The bailout bill, promoted by Bush, Bernanke and Paulson, was handed to congress as an absolute necessity to avoid another Great American Depression.

    Naturally, all congress was terrified of voting against the bill. The lack of transparency, however, should terrify all of us. And the failure to keep assurances about accountablity should tell us this is the same scam operation that caused Wall Street, in the first place.

    Meanwhile, certain banks are content to "take the money and run". This is simply GOP welfare for the rich-- the same rich who caused the problem in the first place.

    And now that bankers and their insurance industry kindred have escaped with the first half of the loot, Detroit- which ignored warnings for 15 years about making fuel inefficient trucks called SUVs-- whines it no longer can make money with the price of gasoline, etc.

    So, Detroit wants a bailout, too.

    Reply to this comment
    by rudy6543 November 13, 2008 1:40 AM PST
    Please read some history and get it straight before you start pointing fingers...that''''s all you democraps seem to want to do...and yet you are just as complicit and guilty as the next.


    --------------------------------------------------------------------------------

    Posted by FromTexwLove at 01:17 AM

    There she goes again. Running at the mouth.
    Reply to this comment
    by rudy6543 November 13, 2008 1:43 AM PST
    Now how would that have looked in an election year?


    --------------------------------------------------------------------------------

    Posted by FromTexwLove at 01:21 AM

    Tell us all about it, Rowdy. It was, let''s see: umm Clinton''s fault? Um it was Kennedy''s fault? Umm. No, no, I know, I know it was Michelle Obama''s fault? No? Okay, Okay, it was Barack''s fault!!
    Reply to this comment
    by November 13, 2008 2:04 AM PST
    I gotta believe that somewhere in all of this, the Bush family and cronies are cashin'' in.
    Reply to this comment
    by alphaa10000 November 13, 2008 2:04 AM PST
    FromTXwithLove said, "Frankly Bush had no choice..."
    ---

    Frankly, that is false. Even O''Reilly blames Bush for not acting against bankers who knew they were scamming the public.

    Instead, Bush handed congress more of the same GOP deregulated blarney called "welfare for the rich"-- replete with no controls for taxpayer dollars-- that produced the Wall Street meltdown, in the first place.

    The finger of accusation still points at the GOP, the party which heedlessly deregulated banking, and made all this superleveraged risk possible.

    It was not the CRA, despite what Faux News told you. Bernanke, himself, commented to congress in 2007 that CRA loans offered normal profits without undue risk. Bernanke was GOP by appointment after Greenspan retired, and held no particular affinity for the CRA or Democrats, so his testimony stands as a remarkably objective endorsement of the function and effect of the CRA.

    And the CRA was involved in fewer than half the subprime loans issued by banks. Clearly, the banks, themselves, hotdogged through the subprime market and created their own toxic paper.

    All because, on a playing field without referees, the banks knew they could get away with anything.
    After all, deregulation is never having to say, "That''s illegal."
    Reply to this comment
    by apprxam November 13, 2008 2:28 AM PST
    U.S. Treasury Dept.: Exit vehicle of NEXT resort.

    You know, this is getting real tired. It''s exausting to see the RePugNaCons just shovel up the money as fast as they possibly can; this is fiscal conservative''s principles at its'' best. The hell with it, just let all of the banks fail under their on weight.

    Force the survivors to compete on a well-regulated field

    Takeover of all failing banks by the government and function as the United States Bank of America, gov.

    Use the Fed, FDIC, US Controller, SEC Dir, GOA dir, CBO, Dept of Commerce, etc. to sit on the Bank%u2019s board with congressional oversight and a commission to serve at the president%u2019s recommendation and the Dept of Justice%u2019s inspector general having full access, subpoena power; shared oversight and regulation by the individual state banking dept or state depts. or AG offices.

    Finally, arrest, prosecute and sue Halliburton and get our f*ckin Iraq War money back!

    Enough with the CitiGroups and JP MorganChases.
    Reply to this comment
    by james4truth November 13, 2008 2:47 AM PST
    Your antiBush bias is so strong, you can''t even understand simple things. The bailout was needed because of "SUBPRIME (replace with poor credit) LENDING" which was required by the US Congress and loudly supported by Barney Frank and company.

    Now a democratic controlled house and senate pass a bill, and you blame Bush for something in it you don''t like? You are sorry...
    Reply to this comment
    by daniel_yang November 13, 2008 2:59 AM PST
    I''d like to learn english from a American native(both guy and girl will do ), I can teach you chinese as a return. please leave or send your YM or Skype account to my maibox:xiaoyaliyi@163.com. :)
    Reply to this comment
    by pirmin3 November 13, 2008 3:34 AM PST
    This money is going to line the pockets of big contributors to BOTH parties. Congress and the administration are totally corrupt and totally out of control. Don''t expect any improvement with the new administration.
    Reply to this comment
    by ramos937 November 13, 2008 3:39 AM PST
    "We put in place tremendous regulatory oversight so that there will be absolute transparency," said Sen. Judd Gregg, R-N.H., on Oct. 1.

    -------------------------------------------

    Sen. Gregg does not understand that the system is not working. Paulson has hi jacked it.

    Once again, the banks get the mine and the taxpayers get the shaft.
    Reply to this comment
    by donlb-2009 November 13, 2008 3:58 AM PST
    Is this fair? I do not think so.

    Is this a scam? Maybe.

    What should we do? I think that John Wayne talked about what we should do in one of his movies. On second thought, it was Gabbie Hayes.

    No oversight. Wow.
    Reply to this comment
    by donlb-2009 November 13, 2008 4:02 AM PST
    What do expect from Congress? Are you aware that a member of Congress is exempt from the insider trading laws? If you do not believe, look it up on the internet.
    Reply to this comment
    by mikezembill November 13, 2008 4:17 AM PST
    I do not know what other people think about this but i am sick and tired of this bullshi! i do not give a damm where it be Republican or Democrat this is wrong and someone needs to pay the price.
    Reply to this comment
    by mikezembill November 13, 2008 4:23 AM PST
    There are 2 trillion dollars in loans that they will not answer for we as taxpayers have that right under the freedom of information act and we as taxpayers want to know and know now Palson you peice of dog shi!
    Reply to this comment
    by queenbee4758 November 13, 2008 5:00 AM PST
    Why isn''t the supposed oversight committee up and running on this yet? I''d like to know how the banks are spending MY money!! And with all this talk of the big dog automakers going down if they don''t get some help soon will be the start of the depression. We can''t let that happen. We elected these officials to take care of things and look at the **** poor job they''re doing! They have given banks too much reign on what they do and from what I see, they went from one extreme to another. They started lending so easily and now have money so tight up their a** they won''t lend now. This is only one reason the housing market and auto sales are so screwed now.
    Reply to this comment
    by pafiddler November 13, 2008 5:47 AM PST
    should this article surprise us? after all, we''re talking about the government here, a group of neanderthals, home of ''heck of a job brownie'' et. al.
    Reply to this comment
    by misha128-2009 November 13, 2008 6:49 AM PST
    ... The bailout was needed because of "SUBPRIME (replace with poor credit) LENDING" which was required by the US Congress and loudly supported by Barney Frank and company. ...

    Posted by James4Truth at 02:47 AM : Nov 13, 2008

    Yet another Republican myth soundly refuted by both Greenspan and Cox in Congressional Hearings.
    Reply to this comment
    by kittykatty2 November 13, 2008 6:52 AM PST
    I am so pis sed. I get a notice from my credit card company yesterday they are raising my interest rate, not much, but still raising it. I have no late payments, EVER. Then I read this ***, hear about homeowners in trouble getting their mortgage interest rates slashed to around 3% in some cases, banks getting bailed out. My 401(k) is going down the toilet and my plan does not allow me to take anything out unless it''s to save a house from going into foreclosure or for medical bills. And all the while I''m being told, don''t worry. Something stinks.
    Reply to this comment
    by wheear November 13, 2008 6:55 AM PST
    Bailoutgate - Bait and Switch - Flim Flam - Now you see it now you don''t..... And the people who need it, won''t see it. Paulson is shady!
    Reply to this comment
    by ybotheratall November 13, 2008 7:00 AM PST
    No one can possibly be surprised by this. I said from day one that it would be a way for big businesses to line their pockets and for Congress to hand out favors to big banking friends. That is EXACTLY what has happened. There should be a cry from the highest mountain asking for the heads of these lying thieves and there won''t be; they ALWAYS get away with it.

    They put a CYA clause in every one of their slimy packages. They''ve done it forever and will continue to and many will just keep on voting these morons into office. No surprises at all...
    Reply to this comment
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