McHugh Demands Wall Street Be Held Accountable, Calls for Congressional Action

Press Release

Congressman John M. McHugh (NY-Pierrepont Manor) today released the following statement on the country's financial markets, following news that the Department of Treasury and Federal Reserve are taking steps to stabilize the U.S. economy. Additionally, leaders of the House of Representatives and the Senate are meeting with Administration officials to develop legislation that will be considered by Congress in the coming week.

"As every New Yorker knows, our country's economy is facing unprecedented challenges that are posing a clear threat to the financial health of every American family. I have continued to hear from constituents who are deeply concerned about the future of our economy, and I understand their concern and frustration that no one is being held accountable for the massive financial failures on Wall Street. I have taken some initial steps to help to ensure that our local communities don't pay the price for the blatant irresponsibility that has caused this crisis and will continue to work with the bipartisan leadership in Congress to protect the American taxpayer from further peril.

"First, I have sponsored legislation that demands we don't reward the massive incompetence of the Fannie Mae and Freddie Mac executives by awarding them bloated and undeserved severance packages of $15 million or even of one dollar. These irresponsible CEOs should not get one cent more of taxpayer money. This was similar to a provision I voted for in July in the Housing bill that passed Congress, but goes one step further and requires that regulators prohibit any ‘golden parachute' payments rather than just giving them the option of stopping payments.

"Second, I have called for creating a Select Committee on Financial Bailouts to investigate the root of this economic problem and the associated bailouts by the federal government. We need to ensure that the action the federal government is taking, and will take in the future, is the correct course, and not unduly influenced by political pressure. Importantly, the Committee would also review what steps can be taken to avoid future financial bailouts. This will help to ensure it is the American taxpayer that is always the first priority, and they are the ones that are protected first.

"It is unfathomable to me that through this turmoil, we have not taken any meaningful steps to look at who is responsible for this financial catastrophe and begin the process of holding them accountable. This needs to change. I will also work with the bipartisan leaders of the House through the weekend and into next week to determine what is the best comprehensive solution that Congress can enact now. We cannot continue to just rely on ad hoc and rifle shot solutions and buyouts and instead need to seek Congressional action that protects those who have made the right decisions - everyday Americans - and not the irresponsible actors on Wall Street."

Congressman McHugh is a sponsor of the bipartisan bill, H.R. 6864, to prohibit golden parachute payments being made to the former executives and board members of Fannie Mae and Freddie Mac. Recent news reports have indicated that Daniel Mudd and Richard Syron, the respective former CEOs of Fannie Mae and Freddie Mac may pocket severance packages of up to $15 million, which Congressman McHugh strongly rejects.

Additionally, Congressman McHugh is a sponsor of the bipartisan House Resolution, H.Res. 1452, that would establish the Select Committee on Financial Bailouts. The committee, which would be bipartisan in its makeup, would be charged with the task of investigating the federal government's bailout actions, making recommendations to prevent future bailouts, and examining the "role of political activities and influence in exacerbating the current market situation."

Source