By Denis Campbell
Where’s Uncle Sam asking for our share back? As a symbol of the hubris with which bankers have treated both the TARP and their culpability, Citi Group announced their plan to sell brokerage crown jewell, Smith Barney. The sale could net as much as $10 billion dollars in today’s market onto Citi’s books.
The Treasury Department gave Citicorp $45 Billion in November under the TARP (Troubled Asset Relief Program) in exchange for the FDIC receiving a mix of preferred stock and warrants worth about $12bn that supposedly allows it to benefit from any upside gains. (I’m still trying to figure out why $45 billion was not then given the same amount in return but that’s another issue for another time.)
A week after receiving TARP funds, we learned the executive team had already cashed out with hundreds of millions of dollars in stock gains while other, not so well connected investors, lost billions of dollars as the stock price crashed. Strangely, the investors wiped out think that something stinks. They’ve filed suit in federal court.
They allege that executives, Rubin, Prince, ex-CFO Sallie Krawcheck and her successor CFO Gary Crittenden cleared huge sums in personal gains (according to their lawsuit Rubin cleared $30.6 million on his stock sales, while Prince got $26.5 million, former COO Robert Druskin got nearly $32 million and former Global Wealth Management unit chief Todd Thomson got $25.7 million and the list of un-indicted co-conspirators goes on and on and on…). They, of course, profess innocence and the beat goes on.
It’s also reported today that Bernie Madoff shafted his own sister for $3 million dollars of her investments wiped out. Bernie being a stand-up guy, tried to send her some jewellery to partly pay for it and got caught by the Feds and could go to jail after having bail revoked. Poor sis now cannot pay her country club bill of between $35,000 – $115,000 dollars, may have to sell her million dollar home and fire the maid. We’re left holding the Citi bill as victims of an even bigger Ponzi scheme than Bernie could have imagined. He looks like the lunatic amateur he is compared to this one.
Hank Paulson and George W. Bush pulled as big a fast one on the American people as his oil buddies did by legally storing coal ash near rivers and reservoirs. Now that a dam broke in Tennessee leaving water and fishing supplies fouled for miles around and decades to come, they count on the story slipping from the headlines (which, thanks to Gaza and the Inauguration, it has) and no one noticing it could take 20-years or more of lawsuits, they can wait, to then wear homeowners down and offer settlements of pennies on the dollar which exhausted homeowners will take.
They count on folks’ attention span lasting no longer than the next red carpet event such as the Golden Globes, football play-offs or next reality show. Thankfully for them, we oblige by making Paris Hilton and Brittney Spears hotter news than climate change.
And under sunset regulations, W and his team of thieves rushed through even more garbage for the next guy to clean up because they can.
Sigh, 8 days until something resembling adult supervision begins to return.
