Governor Sanford: Make Voice Heard to End Bailout Excesses
GOVERNOR SAYS CITIZENS MUST PUSH CONGRESS TO EXERCISE BETTER OVERSIGHT
Governor Mark Sanford today called on South Carolinians to make their voices heard to Congressional leadership about the "gaming of the nation's taxpayers" being spurred by Congress's lack of oversight of the recent federal bailout bill.
In a letter sent Friday to U.S. Treasury Secretary Henry Paulson, the governor urged the Secretary to take whatever steps he could to prevent taxpayers being exposed to additional and unnecessary liability from the bailout, writing that, "The federal government, and by extension taxpayers, are being gamed. I think it's dangerous over the long run the way that taxpayers are being sapped, and this dynamic is playing out in South Carolina."
The governor cited a number of examples today and in Friday's letter, including:
- The sooner-than-expected retirement of Carolina First CEO Mack Whittle. Some have surmised that Whittle's retirement date was moved up so that his bank could apply for federal bailout money while Whittle retained his "golden parachute." The estimated value of Whittle's retirement package is $18 million, a deal that would have been compromised if the bank had asked for a taxpayer bailout before Whittle left.
- A growing number of banks are applying for federal bailout money despite not having engaged in risky lending practices, to make sure they receive a portion of federal "free money" and not be put at a competitive disadvantage.
- The Federal Reserve is now putting $150 billion in AIG after an initial bailout attempt failed to stem massive losses, $27 billion more than previously extended. After an initial bailout with taxpayer money in September, AIG treated some staff to spa retreats in California ($440,000) and a hunting trip in England ($500,000). The Wall Street Journal reported last week that some $40 billion is being paid to executives of banking giants that are getting bailout payments. On top of that, Bloomberg reported today that the Federal Reserve is refusing to identify who is even getting $2 trillion in emergency loans.
"In the rush to "do something' about the turmoil in the credit markets, Congress has failed miserably in keeping an eye out for the taxpayers and watching for unintended consequences of this bailout," Gov. Sanford said. "To put it simply, taxpayers are getting gamed. While we continue to believe that the bailout was an incredibly bad idea in the first place, it's being made worse by loose rules and oversight that are putting taxpayers on the hook for billions more. I'd urge every South Carolinian to make their voices heard to Washington D.C. about the need for real oversight of the bailout going forward."