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.
© MMIX, CBS Interactive Inc. All Rights Reserved.
Add a Comment See all 161 Comments
- 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????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????
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- 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.
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- 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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- I think they are all crooks. At the end of the day, Democrats or Republicans they are all sailing in the same boat and enjoying the pleasures at the cost which Tax payers will be paying for. How could all of them be so stupid to give away billions of dollars without any rules or regulations?
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- Seems there''s a good parallel in history---
Marie Antoinette upon hearing the people had no bread--
Said:
"Then let them eat cake".
It seems to resonate here.
Perhaps its time for New American Revolution-
To bring out the Guillotine !!!
Place one on the steps of Congress-
And overthrow the ruling class!!!
Maybe then we would get some accountability!!! - Reply to this comment
- Unbelieveable! So much money going to banks that did not have to account for what they did with it. They did give $1.5 B for bonuses to the morons that put us in the place we are in the first place, with hands in the cookie jar and no one watching. I am so angry. My daughter, who made some foolish financial decisions, is struggling to make things right and one of the things this was supposed to do was help the folks that could lose their homes. She is behind and had been contacting her bank to let them know what had happened and was doing her best to make payments. No one cared and now she is working with all of them to do the right thing, but all are making it so hard. It''s "we will put you into this special program and you need to do this and then all will be well". However, it is not well and things are worse. She has to apply for help with the mortgage and if she is approved (takes 6 weeks and no guarantees), she will get a lower mortgage with a lower interest rate to make it more manageable for her to make the payments along with her other bills. Our congress hard at work to screw it up for the rest of the folks that are in the downhill part of stuff flowing downhill. UNBELIEVEABLE!
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- THE ELITE IN WALL ST. AND WASHINGTON HAVE CONSIDERABLE TROUBLE UNDERSTANDING NORMALITY. FOR THEM DOLING OUT BILLIONS FOR ACQUISITIONS IS JUST ONE OF THEIR TOYS.
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- This is an Outrage! These Crooks are still ripping off the Taxpayers. And the crazy part of this madness. They have been stealing and lying from the start. The Bail-out should have been given to the Tax-payers from the start. We could have paid our own debts ourselves. And boost our spending without these crooked Banks. Someone should be accountable for these Rip-offs.
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- repo_man_08 said
"Neither the wealthy nor the poor believe in the work ethic.
The poor don''''t believe because no matter how hard they work, they still can''''t make enough to live on. So they still have to eat food from the trash and steal to get by. And if you can do that, why work?"
Believe me, the poor are not poor by choice. Obviously you have never been poor or you would not make the ridiculous statements about poor people. And who says rich people don''t have a good work ethic. How do you think they got rich, by being lazy? You don''t make a bit of sense. - Reply to this comment
- I''m now convinced our government, media and the mob are the same beast. What happens to these people who pisssed through $350thousand million dollars in a few months? NOTHING!!!!! NOTHING AT ALL!!!!!!!! WHAT ABOUT THE HIDDEN $2TRILLION THAT WE DIDN''T HEAR ABOUT IN MAIN STREAM MEDIA? GONE, UNACCOUNTABLY!!!! BLOOMBERG NEWS ARE THE ONLY NEWS AGENCY TRYING TO FIND OUT WHERE THIS HIDDEN CASH HAS GONE.
Didn''t hear about that. I''M SHOCKED!!!! - Reply to this comment
- The house that the investors built must fall! There''s a room for each entity that has undermined and weakened this country to the point that the middle class exist solely as corporate slaves. There%u2019s a lot of money to be milked in the middle class and now the *** has run dry. There%u2019s a room for investors, speculators, politicians, executives, federal reserve, bond holders, treasury department, big businesses (banks, mega-marts, etc.), realty industry, developers, as well as any other industry with heavy political influence. Ask any wealthy person if they are apologetic for destroying the middle class for the soul purpose of living in excess. It''s just a game to them with no regard to future generations or the strength of this country. To these people, this game ends or rather this country does not exist past their lifetime so why worry about the long term consequences. That%u2019s how short-sighted and socially irresponsible these people are. Not the type of people I would associate with - of course unless I''m selfish sleazeball with zero character and no sense of duty, honor, country. There is a way to end this pathetic game and that is to pull out the BOYCOTT card. Do not associate with these entities personally, professionally and more importantly with your wallet! Today%u2019s stock is yesterday%u2019s gold and where there is gold there is corruption. Don%u2019t feed the corruption %u2013 boycott those entities that are have screwed America.
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- "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."
What is truly amazing is that Congress was being flooded with grievances from citizens and taxpayers resisting this use of taxpayer money BEFORE it was handed over. AND Congress actually by-passed decades if not century''s old legisilation regarding the use of taxpayer money for something like this and IN PARTICULAR acquisition legislation that would specifically allow Paulson uninhibited and unaccountable distribution of taxpayer dollars to whomever at whatever he deemed fit without any oversight.
Just so we know what sort of Congress we''re talking about. I can SPECIFICALLY recall sending e-mailing my own objections INCLUDING asking why most of this taxpayer socialized capital wasn''t in the immediate short term being use to provide direct loans and credit to people who needed it and do this at rates that banks would not.
I do believe the REAL CONCERN for Congress at the time and even NOW is saving capitalism/opportunism with no strings attached, BUT... and this can''t be stated more clearly... STRICTLY at the EXPENSE of taxpayers on the order of TRILLIONS.
Apparently what we''re trying to save in America is welfare for the elite, where consumers and taxpayers are NOT the capitalists in any way or form.
Nothing democratic about that... or free. - Reply to this comment
- To all of you who believe that government can do nothing right, get ready to learn some new skills. You will need to learn to build your own roads, bridgeds, dams, electric grid, and water purification plants. You will also need to learn how to maintain each of these. You will need to provide for your own defense. You won''t have to worry about having the money to go to the mall, you won''t have time. You will be far too busy just trying to survive from day to day. When you get too old to work, and are of no use to anyone anymore there will be no safety net in place to insure that you do not die homeless in the streets. You are right, government doesn''t work...not when it is being led by people who want to insure that it doesn''t work. Government only has a chance to work when it is administered by people who are genuinely concerned about the welfare of the governed, the people who make this country great, not the corporations and financial institutions that are trying to bleed this nation, and the world dry. What is sad is that I would be willing to bet that there is not one of you "neocons" that post on this site is the CEO of a major international corporation, or a millionaire defending his own position in the food chain. You are probably just working stiffs who have swallowed the "trickle". Wake up.....you are arguing against your own best interest.
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Best-selling author Mitch Albom on his first nonfiction work since "Tuesdays with Morrie."
