Documents Reveal How Paulson Forced Banks To Take TARP Cash

[Disclaimer]

I can't read the documents because the proxy blocks access to Scribd, but I'm looking forward to reading them when I get home. I don't know if the article commentary is a little overboard or not ("put a gun to their head"), but I want to read the documents.

http://www.businessinsider.com/uncovered-tarp-docs-reveal-how-paulson-forced-banks-to-take-the-cash-2009-5

Remember the infamous meeting when then Treasury Secretary Hank Paulson had the heads of 9 major banks come down to Washington? It was then that he made them the offer they couldn't refuse. Take TARP cash, or else! Now Judicial Watch -- the conservative watchdog organization which was famous for giving the Clinton administration fits -- has uncovered secret documents from that meeting via the Freedom of Information Act. A few of them are really quite stunning.

The first 1-pager is Paulson's talking points for the bank. It basically confirms that he put a gun to all their heads. It says they must agree to take their cash, and that if they protested, then each bank's regulator would force them to take it anyway.

Treasury CEO Talking Points

The next document is perhaps even more mindblowing. It's the one-page agreement whereby each CEO agreed to let the government make its preferred stock injeciton. As you can see, both the amounts of the injection and the name of the bank are just handwritten scrawl.

Treasury Participation Commitment

Better link on Judicial watch page: http://www.judicialwatch.org/news/2009/may/judicial-watch-forces-release-bank-bailout-documents

Washington, DC -- May 13, 2009Documents Detail Historic Treasury/Bankers Meeting – but Geithner Input on Key Document Withheld from the Public

Judicial Watch, the public interest group that investigates and prosecutes government corruption, announced today that it forced the Obama administration to release documents about the October 13, 2008, Treasury Department meeting that coerced major banks to allow the government to take $250 billion equity stakes. Among the other news, the documents confirm former Treasury Secretary Hank Paulson told the CEOs of nine major banks that they had no choice but to allow the government to take equity stakes in their institutions. The documents show Obama Treasury Secretary Tim Geithner, FDIC Chairman Shelia Blair, and Fed Chairman Ben Bernanke co-hosted the meeting with Paulson.

Judicial Watch filed a Freedom of Information Act (FOIA) request about the bankers meeting on October 16, 2008. After months of stonewalling, a FOIA lawsuit was filed against the Obama Treasury Department on January 27, 2009. Incredibly, on February 4, Treasury responded it had no documents about the historic meeting. Pressure from Judicial Watch forced Treasury to reevaluate its response, which resulted in this document release last month. Included in the new documents are:

• "CEO Talking Points" used by former Treasury Secretary Hank Paulson confirming that the nine bank CEOs present at the October 13 meeting had no choice but to accede to the government's demands for equity stakes and the resulting government control. The talking points emphasize that "if a capital infusion is not appealing, you should be aware your regulator will require it in any circumstance." Suggested edits of the "talking points" by Tim Geithner, then-New York Fed President, were withheld by the Obama Treasury Department.
  
• "Major Financial Institution Participation Commitments" signed by the nine bankers on October 13. The CEOs not only hand wrote their institution's names but also hand wrote multi-billion dollar amounts of "preferred shares" to be issued to the government.
  
• Email documenting that, on the very day of the meeting, the Chief of Staff to the Treasury Secretary and other top Treasury staff did not know the names of any of the banks that would be in attendance.
  
• Email showing Treasury officials wanted to use the Secret Service to help keep the press away from the CEOs arriving at the meeting.
  
• Email showing a public relations effort, run in part out of the Bush White House, to tamp down public concerns about "nationalizing the banks."
  
• Email showing that Paulson was able to brief Barack Obama about the bankers meeting almost immediately, but could not reach Senator John McCain.
  

The CEOs present at the October 13 meeting were Vikram Pandit of Citigroup, Jamie Dimon of JP Morgan, Richard Kovacevich of Wells Fargo, John Thain of Merrill Lynch, John Mack of Morgan Stanley, Lloyd Blankfein of Goldman Sachs, Robert Kelly of Bank of New York, and Ronald Logue of State Street Bank.

"These documents show our government exercising unrestrained power over the private sector. Despite promises of transparency, the Obama administration tried to cover up the very existence of these smoking-gun documents. And the cover-up continues, as the Obama administration protects Timothy Geithner by withholding a key document about his role in this infamous bankers meeting," stated Judicial Watch President Tom Fitton.

Documents

• Documents Part 1
  
• Documents Part 2
  
• Documents Part 3

[justin0469]

I heard about this on the news yesterday...very interesting...

[V4junkie]