Bailout Update: $179.5 Billion for 94 Banks
While you’ve been going about your daily life, the Treasury Department has been busily signing up banks who want a piece of the bailout pie. By our count, 94 banks have so far been approved to receive a total of $179.5 billion. (Treasury is buying preferred shares in the banks, which will pay out 5% annually.)
The government is shoveling that money out the door as fast as it can. At least 11 banks announced today that they’d closed the deal with Treasury, bringing the total actually invested to $150.2 billion.
It’s a sum that’s sure to keep on growing. $250 billion of the $700 billion bailout bill was set aside to juice the nation’s financial institutions (notably including insurers and other financial service companies) via the Capital Purchase Plan, so about $70 billion remains. We’ll keep updating our list as the money’s doled out.
This Week in Scandals
Every week, we take stock of how the week unfolded for the stories we're tracking in Scandal Watch (see the right sidebar). Here is how we do it. And, as always, feel free to suggest new scandals.
Is it 2007? Must be, because subprime lenders are back in the hot seat. BusinessWeek explored the seamy underworld of mortgage dealing, where bribes and sex for loans were a natural part of the world of mortgage wholesalers, brokers and underwriters. The magazine also reports the reckless subprime lenders who got us into this mess are still doling out loans, and this time they’re taking advantage of an expanded Federal Housing Administration program that insures those loans. Taxpayers will be on the hook if they default.
Decoder: What Docs Can the White House Put in the Shredder?
With the Bush administration’s well-earned reputation for secrecy, Democrats are concerned that the administration will rev up the paper-shredder as its White House days draw to a close. After all, Cheney has said that he is not part of the executive branch, raising eyebrows and questions about whether his office is covered by records laws.
The White House insists, somewhat obliquely, that it will abide by the law.
But just what are the rules governing what documents need to be saved?
Judge: Air Marshals Stiffed on Overtime
Federal air marshals have been unlawfully denied overtime, and as a result the U.S. government could be liable for millions of dollars in back pay, according to a court opinion (PDF) unsealed this week in Washington, D.C.
The lawsuit, filed in 2006, involves 1,805 air marshals who said they haven't been fully compensated for flight delays, time for writing reports and off-duty fitness and firearms training needed to pass quarterly tests. The judge's opinion cited a 2004 study by the Air Marshal Service which showed that agents in the Chicago field office averaged about 10.5 hours a day.
Justice Department attorneys, defending the government, argued that air marshals weren't entitled to overtime pay because they already receive a 25-percent salary bonus intended to compensate law enforcement officers for always being on call.
Bosnia Exonerated Gitmo Detainees Before Judge Did
A court order today to release five Guantanamo detainees comes six years after Bosnian authorities declared them to be innocent.
A federal judge concluded the government had insufficient evidence against the five Algerians. In an unusual statement, he urged government prosecutors not to appeal his verdict, saying they had already suffered "seven years of waiting for our legal system to give them an answer."
The judge also ruled that evidence of an al-Qaida link involving a sixth detainee, Belkacem Bensayah, was enough to keep him in government custody.
Plan to Save Transit Agencies Floated in Congress
Help might be on the way for cash-strapped city transit agencies seeking relief from the lame duck Congress.
As ProPublica and others reported recently, the meltdown of insurance giant AIG could leave more than 30 public transit agencies on the hook for up to $3 billion in payments to banks. The problem stems from the recent failure of longstanding financing deals that gave banks sizeable tax breaks and the agencies much-needed cash up front. AIG guaranteed about 75 percent of these so-called tax shelters – until its credit rating was slashed in September, sending the deals into default.
With many banks lining up to collect heavy termination fees, the agencies this week dispatched lobbyists and top transit officials from 11 cities to Capitol Hill. It looks like their work is paying off.
Can Obama Turn Back The Clock On Bush’s Midnight Rules?
This story was originally published in Politico
Whether it’s relaxing pollution-control standards for power plants or allowing loaded weapons into national parks, the Bush administration is scrambling to approve or change as many federal rules as it can before it hands off power to President-elect Barack Obama. This surge of "midnight regulations" presents a thorny question for the next administration: What can it do to void rules it thinks should be undone?
An Obama spokesman told ProPublica that the transition team can’t comment on the new administration’s strategy yet. However, John Podesta, a leading member of the transition team, has said Obama will use his "executive authority without waiting for congressional action" to reverse many of Bush’s policies.
But that authority has its limits.
ProPublica is assembling a list of these "midnight regulations" and will track them through the rulemaking process, regularly updating its Web site and detailing how the proposed changes might affect the public.
Sweet Payoffs for Troubled Industries’ CEOs
Even as the Dow flirts with the 7,000s, not everyone is suffering. The Wall Street Journal today looks at CEOs in companies directly related to the financial crisis -- including mortgage financers and insurers, student loan companies and home builders -- who have done quite nicely, thank you very much.
The Journal's analysis looks at executive compensation and stock sales for the period between July 2003 and June 2008. At the top of the list of those who enriched themselves is Charles Schwab, CEO of the brokerage firm of the same name, who took home $816.6 million largely in sales of his shares.
While Schwab's company continues to hold up well during the crisis, others have sunk. High-profile names on the list include congressional enemy No. 1 Richard Fuld ($184.6 million) of Lehman Brothers and James Cayne ($163.2 million) of Bear Stearns.
New Mexico Battles Feds to Stop Gas Drilling Near an Aquifer
New Mexico officials say a gas drilling proposal on federal lands threatens a pristine aquifer that could someday provide drinking water to 15 million households, but the state's protests have met with resistance from the federal office administering the project.
The Bureau of Land Management, which governs development on the 20 percent of New Mexico's lands owned by the federal government, approved drilling on the Otero Mesa, a 1.2 million acre wilderness grassland in southern New Mexico, earlier this month. Because the BLM relied on decade-old data in a four-year-old environmental review, neither the Environmental Protection Agency nor the state's environment departments were involved in the decision.
"The likelihood of contamination is just not there, that's our perspective," said Bill Childress, district manager for the BLM in Las Cruces, N.M.
I Beg Your Pardon
Our Midnight Reg Watch
Buried Secrets: Natural Gas Drilling Harmful to Water?
A series of contaminations raises fears that chemicals used in drilling may harm our drinking water.- ★ A Hospital’s Risky Drive to Boost Transplant Business - WSJ ($)
- ★ Food Makers’ Faulty Allergy Warnings Threaten Kids - Chicago Tribune
- Stevens Trial Witness: False Evidence From DoJ - Politico
- Ex-Regulator: Where Are the Financial Crisis Arrests? - Yahoo Finance
- Network Security Breaches Plague NASA - BusinessWeek
- Hospitals X-Ray Patient Credit Scores - BusinessWeek
- Kansas City Mayor Fights Wife’s Ban from City Hall - WSJ ($)
- L.A. Police Falsified Reputed Drug Dealer’s Arrest Report - LA Times
- DHS Criticized for Lax Oversight of Programs Worth Billions - GovExec
- IG Report: Joe the Plumber’s Records Improperly Searched - WaPo
- Interior Dept. Takes Action After Scandal - AP
More Links from 11/22 | Browse Category:
★ = editors' pick
- Ex-Regulator: Where Are the Financial Crisis Arrests? Yahoo Finance, 11/21
- This Week in Scandals ProPublica, 11/21
- More
- Bosnia Exonerated Gitmo Detainees Before Judge Did ProPublica, 11/20
- Prosecutor: No Sign Pakistani Suspect Was Abducted, Tortured AP, 11/20
- More
- No Retroactive Immunity for Iraq Contractors McClatchy, 11/21
- This Week in Scandals ProPublica, 11/21
- More
Scandals are selected by our editors and ranked in order of our assessment of intensity of coverage. How we do this. Are we missing something? .
Total committed so far: $179 billion
Last updated: Nov. 20, 2008 5:49 PM EST
Recently announced:
| M&T Bank Corporation | $600 |
| Int'l Bancshares Corp. | $216 |
| Sandy Spring Bancorp | $83 |
| Southwest Bancorp | $70 |
| Wilshire Bancorp | $62 |
A ProPublica investigation finds that California nursing boards allow convicted violent felons, sex offenders, and drug dealers to have clean records as nurses
Air Marshals: Undercover and Under Arrest Since 9/11, more than three dozen air marshals have been charged with crimes.
Was AIG Watchdog Not Up to the Job? U.S. regulators say they failed to grasp what pushed the company to the brink of collapse.
Rape Kit Backlog Grows Law agencies slow to use federal money for DNA analysis
Iraqi Army Headcount Unclear
Private contractor in charge of counting is criticized in audit
Degrees of Hank Paulson See where Wall Street's CEOs fit into Treasury Secretary Paulson's network.
History of U.S. Gov't Bailouts See How Past Gov't Bailouts Measured Up
The House Oversight Committee hearings continue with Fannie Mae and Freddie Mac finally taking the stage to discuss their role in the financial crisis (Time TBA).
