Intro: "More than $4 trillion
in near zero-interest Federal Reserve loans and other financial assistance
went to the banks and businesses of at least 18 current and former Federal
Reserve regional bank directors in the aftermath of the 2008 financial
collapse, according to Government Accountability Office records made public
for the first time today by Sen. Bernie Sanders."
Sen. Bernie Sanders (I-Vt.). (photo: WDCpix)
Sanders Releases Explosive Bailout
List
Sen. Bernie Sanders,
Reader Supported News
13 June 12
ore
than $4 trillion in near zero-interest Federal Reserve loans and other
financial assistance went to the banks and businesses of at least 18 current
and former Federal Reserve regional bank directors in the aftermath of the
2008 financial collapse, according to Government Accountability Office
records made public for the first time today by Sen. Bernie Sanders.
On the eve of Senate testimony by JPMorgan Chase CEO
Jamie Dimon, Sanders (I-Vt.) released the detailed findings on Dimon and
other Fed board members whose banks and businesses benefited from Fed
actions.
A Sanders provision in the Dodd-Frank Wall Street Reform
Act required the Government Accountability Office to
investigate potential conflicts of interest. The Oct. 19, 2011 report by the
non-partisan investigative arm of Congress laid out the findings, but did
not name names. Sanders today released the names.
"This report reveals the inherent conflicts of
interest that exist at the Federal Reserve. At a time when small businesses
could not get affordable loans to create jobs, the Fed was providing
trillions in secret loans to some of the largest banks and corporations in
America that were well represented on the boards of the Federal Reserve
Banks. These conflicts must end," Sanders said.
The GAO study found that allowing members of the banking
industry to both elect and serve on the Federal Reserve's board of directors
creates "an appearance of a conflict of interest" and poses
"reputational risks" to the Federal Reserve System.
In Dimon's case, JPMorgan received some $391 billion of
the $4 trillion in emergency Fed funds at the same time his bank was used by
the Fed as a clearinghouse for emergency lending programs. In March of 2008,
the Fed provided JPMorgan with $29 billion in financing to acquire Bear
Stearns. Dimon also got the Fed to provide JPMorgan Chase with an 18-month
exemption from risk-based leverage and capital requirements. And he
convinced the Fed to take risky mortgage-related assets off of Bear Stearns balance
sheet before JP Morgan Chase acquired the troubled investment bank.
Another high-profile conflict involved Stephen Friedman,
the former chairman of the New York Fed's board of directors. Late in 2008,
the New York Fed approved an application from Goldman Sachs to become a bank
holding company giving it access to cheap loans from the Federal Reserve.
During that period, Friedman sat on the Goldman Sachs board. He also
owned Goldman stock, something that was prohibited by Federal Reserve
conflict of interest regulations. Although it was not publicly disclosed at
the time, Friedman received a waiver from the Fed's conflict of interest
rules in late 2008. Unbeknownst to the Fed, Friedman continued to purchase
shares in Goldman from November 2008 through January of 2009, according to
the GAO.
In another case, General Electric CEO Jeffrey Immelt was
a New York Fed board member at the same time GE helped create a Commercial
Paper Funding Facility during the financial crisis. The Fed later provided
$16 billion in financing to GE under this emergency lending program.
Sanders on May 22 introduced legislation to prohibit banking industry
and business executives from serving as directors of the 12 Federal Reserve
regional banks.
To read a report summarizing the new GAO information,
click here.
Jamie Dimon Is Not Alone
During the financial crisis, at least 18 former and
current directors from Federal Reserve Banks worked in banks and
corporations that collectively received over $4 trillion in low-interest
loans from the Federal Reserve.
US
Senator Bernard Sanders (I-Vt.)
Washington, DC
June 12, 2012
1.
Jamie Dimon, the
Chairman and CEO of JP Morgan Chase, has served on the Board of Directors at
the Federal Reserve Bank of New York since 2007. During the financial
crisis, the Fed provided JP Morgan Chase with $391 billion in total
financial assistance. JP Morgan Chase was also used by the Fed as a
clearinghouse for the Fed's emergency lending programs.
In March of 2008,
the Fed provided JP Morgan Chase with $29 billion in financing to acquire
Bear Stearns. During the financial crisis, the Fed provided JP Morgan Chase
with an 18-month exemption from risk-based leverage and capital
requirements. The Fed also agreed to take risky mortgage-related assets off
of Bear Stearns balance sheet before JP Morgan Chase acquired this troubled
investment bank.
2.
3.
Jeffrey Immelt,
the CEO of General Electric, served on the New York Fed's Board of Directors
from 2006-2011. General Electric received $16 billion in low-interest
financing from the Federal Reserve’s Commercial Paper Funding Facility
during this time period.
4.
5.
Stephen Friedman.
In 2008, the New York Fed approved an application from Goldman Sachs to
become a bank holding company giving it access to cheap Fed loans. During
the same period, Friedman, who was chairman of the New York Fed at the time,
sat on the Goldman Sachs board of directors and owned Goldman stock,
something the Fed’s rules prohibited. He received a waiver in late 2008 that
was not made public. After Friedman received the waiver, he continued to
purchase stock in Goldman from November 2008 through January of 2009
unbeknownst to the Fed, according to the GAO. During the financial crisis,
Goldman Sachs received $814 billion in total financial assistance from the
Fed.
6.
7.
Sanford Weill, the
former CEO of Citigroup, served on the Fed's Board of Directors in New York
in 2006. During the financial crisis, Citigroup received over $2.5 trillion
in total financial assistance from the Fed.
8.
9.
Richard Fuld, Jr,
the former CEO of Lehman Brothers, served on the Fed's Board of Directors in
New York from 2006 to 2008. During the financial crisis, the Fed provided
$183 billion in total financial assistance to Lehman before it collapsed.
10.
11.
James M. Wells,
the Chairman and CEO of SunTrust Banks, has served on the Board of Directors
at the Federal Reserve Bank in Atlanta since 2008. During the financial
crisis, SunTrust received $7.5 billion in total financial assistance from the
Fed.
12.
13.
Richard Carrion,
the head of Popular Inc. in Puerto Rico, has served on the Board of
Directors of the Federal Reserve Bank of New York since 2008. Popular
received $1.2 billion in total financing from the Fed's Term Auction
Facility during the financial crisis.
14.
15.
James Smith, the
Chairman and CEO of Webster Bank, served on the Federal Reserve's Board of
Directors in Boston from 2008-2010. Webster Bank received $550 million in
total financing from the Federal Reserve's Term Auction Facility during the
financial crisis.
16.
17.
Ted Cecala, the
former Chairman and CEO of Wilmington Trust, served on the Fed's Board of
Directors in Philadelphia from 2008-2010. Wilmington Trust received $3.2
billion in total financial assistance from the Federal Reserve during the
financial crisis.
18.
19.
Robert Jones, the
President and CEO of Old National Bancorp, has served on the Fed's Board of
Directors in St. Louis since 2008. Old National Bancorp received a total of
$550 million in low-interest loans from the Federal Reserve's Term Auction
Facility during the financial crisis.
20.
21.
James Rohr, the
Chairman and CEO of PNC Financial Services Group, served on the Fed's Board
of Directors in Cleveland from 2008-2010. PNC received $6.5 billion in
low-interest loans from the Federal Reserve during the financial crisis.
22.
23.
George Fisk, the
CEO of LegacyTexas Group, was a director at the Dallas Federal Reserve in
2009. During the financial crisis, his firm received a $5 million
low-interest loan from the Federal Reserve's Term Auction Facility.
24.
25.
Dennis Kuester,
the former CEO of Marshall & Ilsley, served as a board director on the
Chicago Federal Reserve from 2007-2008. During the financial crisis, his
bank received over $21 billion in low-interest loans from the Fed.
26.
27.
George Jones, Jr.,
the CEO of Texas Capital Bank, has served as a board director at the Dallas
Federal Reserve since 2009. During the financial crisis, his bank received
$2.3 billion in total financing from the Fed's Term Auction Facility.
28.
29.
Douglas Morrison,
was the Chief Financial Officer at CitiBank in Sioux Falls, South Dakota,
while he served as a board director at the Minneapolis Federal Reserve Bank
in 2006. During the financial crisis, CitiBank in Sioux Falls, South Dakota
received over $21 billion in total financing from the Federal Reserve.
30.
31.
L. Phillip Humann,
the former CEO of SunTrust Banks, served on the Board of Directors at the
Federal Reserve Bank in Atlanta from 2006-2008. During the financial crisis,
SunTrust received $7.5 billion in total financial assistance from the Fed.
32.
33.
Henry Meyer, III,
the former CEO of KeyCorp, served on the Board of Directors at the Federal
Reserve Bank in Cleveland from 2006-2007. During the financial crisis,
KeyBank (owned by KeyCorp) received over $40 billion in total financing from
the Federal Reserve.
34.
35.
Ronald Logue, the
former CEO of State Street Corporation, served as a board member of the
Boston Federal Reserve Bank from 2006-2007. During the financial crisis,
State Street Corporation received a total of $42 billion in financing from
the Federal Reserve.
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RSN Te
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