WASHINGTON, Jan. 12, 2009
Where Did The Bailout Billions Really Go?
CBS Evening News Exclusive: Were Bank Bailout Winners And Losers Cherry-Picked?
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Play CBS Video Video Bailout Money Trail Congress is wary of how President-elect Obama plans to spend TARP funds as Bush bailout billions went to buy other banks and not to free up credit, reports Sharyl Attkisson.
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Video Bailout Bait And Switch? The financial industry bailout was supposed to help troubled mortgage holders and free up credit lending. So why have the firms used the money to buy up smaller banks? Sharyl Attkisson reports.
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Panelists testify at a Senate Banking Committee hearing Nov. 13, 2008. (CBS)
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Timeline Stopgap Measures A look at the series of government moves to try and stem the financial meltdown.
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Timeline Financial Meltdown Track major events that lead to one of the most tumultuous times in Wall Street's history.
Investigative correspondent Sharyl Attkisson keeps watch on how the government is spending your tax dollars
• Murtha's Defense Earmarks Questioned
• Bailout Banks Hike Up Charges
• Student Loan Charity Under Fire
• Bailout Money To Tax Havens
• Big Bank's Bailout Spending Spree
• The Impossible-To-Track Bailout
• Where Did The Bailout Billions Really Go?
• Pension System A Runaway Train
• Parking Garage To Nowhere
• Did D.C. Bribery Cost Troop Lives?
• Teach For America Gets Schooled
• USDA Jobs A Day At The Beach?
• From Lawmaker To Lobbyist
• Flying The Empty Skies
• Fishing For Tax $$
• Millions In Pills, Flushed
• Murtha's Defense Earmarks Questioned
• Bailout Banks Hike Up Charges
• Student Loan Charity Under Fire
• Bailout Money To Tax Havens
• Big Bank's Bailout Spending Spree
• The Impossible-To-Track Bailout
• Where Did The Bailout Billions Really Go?
• Pension System A Runaway Train
• Parking Garage To Nowhere
• Did D.C. Bribery Cost Troop Lives?
• Teach For America Gets Schooled
• USDA Jobs A Day At The Beach?
• From Lawmaker To Lobbyist
• Flying The Empty Skies
• Fishing For Tax $$
• Millions In Pills, Flushed
But once the bill became law on October 3, Henry Paulson's Treasury Department moved quickly on an entirely different front: Give bailout money to select banks to help them buy competitors. It was largely under the public radar, with only anonymous government officials acknowledging the strategy, CBS News investigative correspondent Sharyl Attkisson reports.
During the hearing on Nov. 13, Sen. Chris Dodd, D-Conn., called it "confounding to me."
Rep. Dennis Kucinich, D-Ohio, said it "breaks with congressional intent."
But CBS News has learned the banking industry was clued-in from the start.
Listen to what BB&T Bank's chief executive told analysts in a conference call shortly after the bailout passed. He's not talking about using bailout funds to help with mortgages or consumer credit - but to buy other banks.
"This is a relatively inexpensive way to raise capital for acquisition opportunities," said John Allison, CEO of BB&T.
A month later, they got $3 billion in bailout money.
Just look at all the banks we found that have gotten taxpayer bailout funds, and are gobbling up the competition:
Nobody from the Treasury Department would respond to CBS News' questions. But some analysts say the idea is to strengthen the banking industry by giving strong banks the means to take over weak ones.
It's not necessarily working out that way.
Some banks judged by federal regulators as "strong," like Merrill Lynch and Provident Bancshares, are the very ones getting bought out.
And some in Congress are upset that the Treasury Secretary is hand-picking winners and losers.
In a November 14 hearing, Rep. Darrell Issa, R-Calif., said: "Hank Paulson gets to decide who lives and who dies? Who buys whom?"Read more at Couric & Co. Blog: Bailout "Bait And Switch?"
Take PNC Bank and National City. Both wanted bailout money but only PNC got it: Then, it bought National City.
Rep. Kucinich is from Cleveland, where National City was based. He grilled the Treasury official in charge of the bailout, Neel Kashkari, saying in the Nov. 14 hearing: "You picked a winner, PNC, and you picked a loser, National City Bank."
Kashkari responded: "With deep respect, it is not appropriate for me to speak about an individual institution, but I can talk generally about …"
"Well, with deep respect, you know, you put 4,000 people out of work in the city of Cleveland," Kucinich said. "You're, you know … are you taking a Fifth Amendment here?"
"No, sir," Kashkari said. "I don't think it's a good use of taxpayer money to put taxpayer capital into a financial institution that's going to fail."
"Boy, you know that statement that you just made you will hear about for the rest of your career," Kucinich said.
With billions going to banks and so far not helping with the mortgage crisis, congressional leaders this week said no further bailout money will be given to Treasury without much stricter conditions.
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- morphndol8
You, sir, are a babbling IDIOT. - Reply to this comment
- As usual the Taxpayers are the last on the Pole. Who is really looking out for our behalf. Because it sure is not Washington. We need to take a Good look at these people that run for Office. And get someone in to Bail the American People out for a Change.Washington need to Clean House.
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- "Nobody from the Treasury Department would respond to CBS News'' questions. But some analysts say the idea is to strengthen the banking industry by giving strong banks the means to take over weak ones."
Anybody who believes that truly is a fool. This is naught but a scheme to centralize control of the money supply in the U.S. - and thus ultimate control of the nation itself.
Why do you think Goldman''s cycled so many alumni through the White House? For the fabulous salaries?
lolllllllllllllllllll...... - Reply to this comment
- USA is not the welfare department
Posted by mrdadguy
I agree with you on this issue. I am sure that while we sit here so smug when we think of all our so called freedoms here in the U.S., intellegent people elsewhere in the world are having a good laugh at how stupid and incompetant we are. We pay out the nose in taxes every year to support any jerk who holds their hand out, and then we borrow massive amounts of money to buy things we can''t afford and don''t need, just because we can. Then at tax time every year we whine and complain, but re-elect the same corrupt cretins who give more rights to illegal freeloaders than we are allowed ourselves, and we believe it when they tell us that it''s too expensive to deport them. - Reply to this comment
- Of today''s news stores I have read, this is the only one which deserves my time for comment...
HA HA HA - Reply to this comment
- people are upset the people got there money,, the state(ca) is broke, says no money from sales tax??,, what is going on here, we have non taxed sales at every neighborhood corner, weekend, retail sales garage sales, how many lawn people sucking up all that gas, food stamps for illegals, free lunch at schools for illegals, illegals are all races in here, mexicans think they are the only ones this affects, i am sorry to sound so cold, but citizens have to make room for illegals??,,, only mass deportation is the fair thing to do, how many jobs where lost, how many more illegals came in yesterday,, USA is not the welfare department, deport all illegals now, the economy will rebound as citizens trying to collect unemployement will fill those jobs illegals currently have, i have five kids, who now will have to pay for all this when i die, i stopped voteing as the vote does not get counted, there is nothing to vote for in this area, people are just accepting it, give em amnesty, automatic welfare with all these babies there making, why do i have to pay for this????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????
- Reply to this comment
- Before any additional money is handed over to any financial institution, let them agree to:
Lloyds of London only accepts members who are willing to commit all their personal wealth behind the insurance contracts (bets) that they place. Only after three years of the annual closing are the profits or losses declared. This lapse of time allows for the claims to be settled and any gain or loss is paid out or money paid back.
This principle should be adopted by anyone collecting and investing funds on behalf of third parties.
Simple and clean. Most speculators will disappear. - Reply to this comment
- I have a grandson who goes to Northwestern Oklahoma State University, and he could not get a student loan to cover his tuition and yet the big banks got all that bailout money. Maybe it''s time that the people REQUIRE those in government be made accountable to their actions. It''s a down right shame that they (and not just the president, but those in congress) give the big banks all that money and yet the ones who really need it can''t even get a loan.
- Reply to this comment
- Lets face it folks we are being manipulated and robbed by a Terrorist Organization which has disguise its self as our Government.
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- Not one reporter asked the right question to Mr. Bush yesterday as: Where is the bail out money? When did federal help get to New Orleans? How much surplus was there when he took the white house? Why did they not attack Saudi Arabia if all of the criminals were from Saudi Arabia? and more. The reporters were all mesmorized by his defensive attitude and did not say a word. No one really asked a tough question. I feel sorry for our country.
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