Letter to Timothy F. Geithner, Secretary of the Treasury

Letter

PASCRELL: FEDERAL MONEY FOR FINANCIAL STABILITY, NOT PRICEY MARKETING SCHEMES

U.S. Rep. Bill Pascrell, Jr. (D-NJ-08) today requested that Treasury Secretary Timothy Geithner intervene in the naming rights agreement between Barclays PLC and the proposed Atlantic Yards arena in Brooklyn on the grounds that Barclays is the recipient of $8.5 billion dollars in bailout money from U.S. taxpayers through credit default swap payments by AIG.

"I believe that any further payments of taxpayer money, whether through TARP or the Federal Reserve System, be conditioned on the cancellation of any stadium or arena naming-rights agreements that may be in place," stated Pascrell a member of the House Committee on Ways and Means. "Federal money was made available to banks and companies like AIG in order to stabilize the financial system and free up credit markets, not for high priced marketing opportunities."

The text of the letter follows and is attached in a portable document format.

March 23, 2009

The Honorable Timothy F. Geithner
Secretary of the Treasury
U.S. Department of the Treasury
1500 Pennsylvania Avenue, NW, Room 3134
Washington, DC 20220

Dear Secretary Geithner:

I am writing to request that the Department of Treasury take all appropriate and legal steps to reign in the questionable business practices engaged in by Barclays PLC. Specifically, Barclays plans on spending almost $400 million for the naming rights to the proposed Atlantic Yards arena in Brooklyn, despite recently receiving $8.5 billion dollars in bailout money from U.S. taxpayers through credit default swap payments by AIG.

As you are aware, Barclays is one of the world's largest financial services companies. While the company is headquartered in London, it has operations that stretch across six continents, including a significant presence in the U.S. Like most banks, Barclays' business has suffered and continues to weaken as a result of the current global economic crisis, leading to thousands of employees being laid off worldwide, including here in the United States. However, this has not stopped the company from moving ahead with their plan to spend $400 million over the next twenty years to have their name on an arena. This situation is aggravated by the fact that the arena's construction will be financed, in part, by taxpayer dollars. Considering Barclays' financial position, the recent revelation that they have received almost $8.5 billion in U.S. taxpayer dollars through AIG, and that taxpayer money will be contributed to the funding of this stadium project, I believe that allowing this naming rights deal to remain in place makes little sense for both taxpayers and Barclays.

I understand that the Treasury Department allowed CitiGroup, which had a similar naming rights agreement with the New York Mets in place, to move forward even after receiving federal bailout money. However, unlike that deal, construction on the Atlantic Yards arena has not yet broken ground. Furthermore, press reports indicate that the agreement between Barclays and the Atlantic Yards arena includes an opt-out clause and no money has exchanged hands.

I believe it is appropriate for the U.S. to request that Barclays cancel this naming-rights agreement as a result of the payments made to it through AIG and respectfully request that you take action to that effect. Furthermore, I believe that any further payments of taxpayer money, whether through TARP or the Federal Reserve System, be conditioned on the cancellation of any stadium or arena naming-rights agreements that may be in place. Federal money was made available to banks and companies like AIG in order to stabilize the financial system and free up credit markets, not for high priced marketing opportunities. We must do everything in our power to ensure that taxpayer money is being effectively utilized to restore our economy and return our country to prosperity.

Please do not hesitate to contact me if you require any further information. I thank you for your attention to this matter, and look forward to the favor of your reply.

Sincerely,

Bill Pascrell, Jr.
Member of Congress

cc: The Honorable Barney Frank, Chairman, United States House of Representatives Committee
on Financial Services

The Honorable Ben S. Bernanke, Chairman, United States Federal Reserve

Source