[December 23, 2008]

Legislators: Bailout money is misused

(The Brunswick News Via Acquire Media NewsEdge) Dec. 23--U.S. Rep. Jack Kingston, R-1, is not the least bit surprised by news reports that banks receiving bailout funds awarded their top executives millions of dollars in bonuses and costly perks.

He said no one else should be shocked, either.

"This is the problem with government bailout and giving them taxpayer money," Kingston said Monday, responding to a report by The Associated Press that some banks used part of the bailout to sweeten the paychecks of their top executives. The Associated Press said gifts given to upper level executives by banks accepting federal aid totals $1.6 billion.

"Private enterprise is used to doing things their own way and giving bonuses, and using corporate jets and having expense accounts and things like that, which is their right," Kingston said. "But when they get bailout funds...suddenly everything they do is going to be second guessed by the government.

"Are the bonuses in the interests of the bank? Is it in the interests of taxpayers, or is this a frivolous waste of money? Or is this just something they are doing to enrich themselves and taking advantage of the taxpayers? The answers to those questions are not easy ones to answer because you don't know when they give a bonus to somebody if that is the money well earned or it is because the money is there and they can give it to them."

Kingston -- who voted against the $700 billion bailout in the House -- said no one should be taken aback either that Bank of America, which received $15 billion in bailout funds, bought interest in a bank of China.

"That was the problem with the bailout stuff," he said. "It was not the purpose of this money. It's not why it was voted on. It's not why it was donated, but I don't think the taxpayers or the government should be surprised or disappointed. The answer all along was not to do the bailout."

That doesn't mean Kingston doesn't care. He said news of what is happening has ignited the ire of Congress. He said it is bound to come up when Congress convenes in January.

"I am very concerned about it and Congress is somewhat outraged, but I don't know where it will go from here," he said. "I believe when we get back to Washington there will be a lot of oversight hearings. Banks compromised their independence by accepting the government money. I realize that they had to take the money in most of the cases but along with that a lot of government strings are attached. There is no such thing as free government money."

U.S. Sen. Johnny Isakson, R-Ga., said he himself will ask for hearings if the information is true and that the language of the agreement between the banks and the federal government clearly state that money can not be used to reward bank executives.

With or without the language, it should not have been used to beef up bank accounts or perks of executives, he said.

"I've been terribly disappointed...to see what is total insensibility on most of corporate America," Isakson said Monday. "To see incredibly high raises when we are in a difficult time and when people are tightening their belts illustrates the total lack of connection the corporate world has with the real world. These companies that accepted tax-dollars should be more sensitive with what is going on in main street America."

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