Posted by
Stefano on Monday, April 06, 2009 1:48:53 PM
Now that the Obama brigade has stopped hyperventilating in mock rage at the AIG bonus babies, they are changing course in their approach to compensation of lead executives at financial institutions. Many TARP recipients are planning to return what they owe to the Treasury as quickly as possible and others are intent on avoiding taking TARP money to avoid the legislative restrictions on pay and to avoid the requirement allowing the government to purchase ownership stakes in their companies. The Pelosi/Reid Democrats in Congress put flesh on their mock rage by passing legislation restricting compensation of executives at firms who have received TARP money. Now Obama needs cooperation from these very institutions to successfully implement the new and improved toxic debt relief program of Treasury Secretary Geithner. TheWashington Post reports today that many financial institutions will not participate in toxic debt relief if current restrictions apply to them. From The Washington Post:
"Some private investors said, for instance, that they would not help the government buy toxic assets from banks if the congressional restrictions were applied to them. And every major provider of small-business loans has said that it will not participate in the government's program if it has to surrender ownership stakes to the government or submit to executive-pay limits."
The Obama gang has found a clever way to avoid the new compensation law passed by Congress and signed by the President. They've created "middleman" entities to launder the money passed out by the TARP and TALF programs. The money comes from the Treasury to the middle man entity and then on to the institution receiving the aid. By this clever process, the institution doesn't receive the aid directly from the Treasury and the compensation and ownership provisions of the law are avoided. Congress, so far, is feigning ignorance but this type of evasion may not be legal. The Washington Post reports:
"They are basically trying to launder the money to avoid complying with the plain language of the law," said David Zaring, a former Justice Department attorney who defended the government from lawsuits involving related legal issues. "They are trying to create a loophole to ignore Congress, and I think the courts will think that it's ridiculous."
I don't have to wonder what the reaction of Congress would be to this type of evasion if "W" were still President. No doubt it would be screaming and shouting and running abouting and high crimes and misdemeanors forever and ever from Pelosi, Reid, Schumer, Dodd, Frank, and the usual suspects.
The Obama administration and their leader, Barack Obama are again displaying their arrogance and hypocricy in spades. I say go after them on this nonsense without delay.
Here is The Washington Post article: