Journalism in the Public Interest

General Electric Tapped Fed To Borrow $16 Billion

General Electric Co. borrowed $16 billion through a Federal Reserve Board rescue program in the fall of 2008, even as the blue-ribbon company enjoyed the highest credit rating available at the time.


The GE building in New York City. (Chris Hondros/Getty Images)

Newly released documents from the Federal Reserve Board show that General Electric Co. was a significant user of one of the Fed's rescue programs in the fall of 2008, even as the blue-ribbon company enjoyed the highest credit rating available at the time.

Over several weeks in late 2008, GE borrowed $16 billion by selling commercial paper through the Fed. Companies like GE typically rely on these short-term IOUs to fund daily operations, but as the credit crisis unfolded that fall, private markets were virtually frozen.

GE publicly disclosed in late October 2008 that it had entered the Fed's program but did not reveal the extent of its borrowings.

Responding to a congressional mandate, the Fed this week released data showing that 82 companies borrowed $738 billion through the program, called the Commercial Paper Funding Facility.

In 2008, GE was the largest issuer of commercial paper in the United States, having almost $100 billion outstanding at one point. The company since has drastically cut its dependence on this form of financing.

The Fed program was a temporary bridge for GE. As we previously reported, by November 2008, the company had been accepted into another rescue program that allowed it to sell paper at lower rates.

Under that program, run by the Federal Deposit Insurance Corporation, GE sold more than $21 billion in commercial paper in the last weeks of 2008. By early 2009, GE was out of the Fed program but had become the FDIC program's largest customer.

Called the Temporary Liquidity Guarantee Program, the FDIC effort offered subsidized guarantees for medium- and short-term debt offerings by banks. This allowed GE to sell its debt at lower interest rates, and by spring of 2009 the company had issued $74 billion in commercial paper and longer-term notes under the FDIC program.

GE did not initially qualify for the program. But after lobbying by the company and assistance from Hank Paulson, then the secretary of the Treasury, the FDIC changed the eligibility rules and GE was accepted. Soon thereafter, GE stopped selling commercial paper via the Fed's facility.

In November 2008, as GE was using both the Federal Reserve and the FDIC programs, the company acknowledged their benefit on its website: "Both of these government programs provide additional levels of security for our investors, strengthen our ability to support the planned dividend in 2009, and do not place any restrictions on our dividend policy."

Despite the help from Uncle Sam, GE was forced to sharply reduce its dividend in early 2009.

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Not too surprising. GE is one of the Department of Defenses largest contractors. When you’re a big league thief you get bigger perks. I consider “defense” contracts a bail out of sorts. Guaranteed cash from taxpayers while very few taxpayers know they are being robbed by these large corporations. Billions of bucks dumped down the drain. The sad part is that the DOD thievery is not enough. They went to their buds at the FED and stuck it to us (our kids, grand kids, great grand kids) some more.

IT IS THEIR WORLD, We, the People”  are the spectators sitting in the bleachers watching this folly play out. Can we stop them? I don’t know,  anything short of a revolution I suppose but that is not going to happen either. The U.S. government has enslaved us and we can do nothing about it.

GE has never been the friend of the American people…from the Hudson River’s pollution to championing pitting the American worker against the hordes of the People’s Republic of China with their advantage of a rigged currency exchange rate, GE has long worked to bring suffering to those who do not have wealth as a birthright.

Which, on the surface, makes their tolerance of MSNBC (they do have NBC Universal, you know) talking heads like Maddow and Olbermann somewhat…puzzling.

Until, that is, you remember that Democrats occasionally win elections, there are always defense contracts that GE wants, and every once in a while they need $16 billion or so in really, really cheap money…

Is it any wonder why the administration enjoys such consistently fawning coverage from the GE owned network stations and their cable networks?

They claim to have an independent ‘News’ operation, but their coverage and ‘slant’ is anything but.

Russia couldn’t sustain their bastardized communism and the U.S. will fail with unbridled capitalism. As was always predicted, something in between will emerge and the corporations will be in charge.

It surely did not hurt GE to obtain Fed largess for it to have the Rockefeller foundations as a major stockholder or to be a ranking player in the Counsel on Foreign Relations.

Bosco LaMonte

Dec. 3, 2010, 9:20 p.m.


You ask “Can we stop them?”  Yes, We The People can stop them by demanding that Congress adhere to the mandate in the U.S. Constitution—Article V—which provides a mandated method to propose amendments.  We just need a tipping-point majority to demand that Congress call a convention when 34 states make application.  So far more than 700 such applications are on file in the Congressional Record, many, many more than required.

Just Google “Article V Convention” and learn that We The People have a choice—demand Congress call a convention as mandated by Article V of the U.S. Constitution.

What amendments are needed?  How about a Standard Voting Unit with Transparent Code and a Paper Trail, Strict Term Limits to End Career Politicians Imperialistic Behavior, Balanced Budget to Bring Taxpayers Out of Debt, Immediate Removal of Public Servants who violate both the Letter and Intent of the Law, and many others which Congress will never propose.

It’s time for an Article v Amendments Convention!

Was Jack Welch really a great CEO?

I agree with you Bosco, but…be aware that ‘they’ make the rules…“GE did not initially qualify for the program.”...“the FDIC changed the eligibility rules…”

I guess what I’m trying to say is that, like Pam…“anything short of a revolution” is NOT going to work.

Cmon, fellow commenters. Get real. It’s true that GE (esp. GE Capital) is a big company who serves their stockholders, not the people.  But they’re not exactly the Great Satan.

Their role in the economy is financing machinery for use by business.  At the time of the great meltdown the little company where I worked was expanding.  We needed a half dozen computer servers (which we bought used and cheap).  GE Capital financed them.  In hindsight I suppose they got the dough to loan us from the treasury.

So here’s one taxpayer that doesn’t mind that the late 2008-early 2009 finance rescue programs were in place.  It’s also good that we now know what happened.

We have plenty of real demons prowling around; let’s not demonize those who are merely crass.

Bosco LaMonte

Dec. 4, 2010, 8:34 a.m.


Nothing worthwhile is easy, and it requires lots of patience and persistence.

An Article V Amendments Convention IS a Revolution—a peaceful revolution.  It’s only a matter of time.  Join Us!

Ollie - you must not have heard Immelt glorifying inequitable free trade as much as I did.

You must not have heard him throw in that caveat that “Some sectors will be hurt…” and then hurry on before anyone thought to inquire further and so learn that a targeted “sector” was America’s entire industrial base - and so those harmed would be millions of American workers.

And so the victims would be those workers and their families…and so the American casualties would number in the tens of millions…

GE knew that the futures of tens of millions of Americans would be sacrificed to further enrich a handful of major shareholders and the suits in GE’s executive suite…yet they championed inequitable free trade anyway.

Had a foreign power deliberately set out to bring great harm to tens of millions of Americans, we would have given them steel rain in return - if not THE bomb.


Dec. 4, 2010, 2:44 p.m.

This shows that our whole economy was in a frickin’ mess.  Auto industry, financial services companies, and now GE?!?!?!?  Thank God the government saved our collection butts…and stepped in.  As Buffett said many times, they were the only ones who could do it.

The obvious fact is that the US government and the corporations are in bed together, robbing the rest of us to enrich themselves. War profiteers, bankers, the corporate criminals, the Fed, and politicians from both parties are on the same team. We have been gamed completely.

Michael Piazza

Dec. 4, 2010, 7:41 p.m.

I am encouraged by the comments above.

This country is ruled by a “Dictatorship of the Mega - Corporations”.

This is the issue our generation is faced with. The problem is not capitalism—the USA has been manifesting a gross distortion of capitalism. The Reagan years flooded slightly purer form of capitalism dam with graft filth. Big corporations routinely fund and influence and hence almost control our political parties to satisfy their greed and power lust. The oil companies have sucessfully squashed alternatively powered vehicles for decades, large corporations swallow up smaller corporations with better technology and then kill the leaner more efficient technology. Pharmaceuticals buy doctors. Financials steal via algorythyms and we bail them out if they cannot steal enough. Profit is king and it no longer matters how it arrives. Economic Hitmen are heros.  We have propaganda posing as news reported by Rupport Murdock et al.

The real issues are smoke screened via clever decoys such as: capitalism vs socialism, the war on terror to save us from WMD and Osama Bin Laden, FOX News vs. MSNBC. Political leaders, pundits, and academia (including scientists) are spinning and lying openly. Was Glenn Beck born or hatched? 

GE and similiar ilk now have the “freedom of speech” to donate $millions($billions) to the elections of candidates who will be eternally grateful.  We the people through our elected representatives make sure they have the money to do.

But, I have absolute faith in humankind—we will evolve. Truth and benevolence always pervails. I feel grateful to have Pro-Publica and similiar organizations and individuals shine some light into the dark dirty swamps.

At the time of the Great Meltdown in the fall of 2008, I had only one question:

Has capitalism failed?

It is now clear that it did fail. In the period since its collapse, the predictable has happened: Millions of innocent people are suffering, and the perps are laughing all the way to the bank.

but what about their great six sigma program?

Six Sigma?  Who needs Six Sigma when rigged currency exchange rates and environmental policies of ‘Important people don’t live close to toxic pollutant point sources.’ mean that you can produce at far lower cost in India and China - an 80% reduction in production costs, in fact - and so afford to throw away what comes off the line but doesn’t work and still make a profit?

And there is the fact that America’s corporations have done so even though the consequence is that America’s industrial infrastructure - a nation’s true arsenal and primary defense against aggression - has been shattered…

Their finding the risk that consequence creates to be acceptable in turn suggests that one of their primary and most myopic goals is to stick it to ‘labor’ (as they think of the American people) at all and any cost.

stephen verchinski

Dec. 4, 2010, 11:56 p.m.

Ollie tates that it’s great that GE Capital was there to bail them out when they neede commercial credit.
We could have done the same thing by imposing a capital transfer tax on all money going out of the country, a tobin tax on financial transactions that are speculative…stocks derivatives etc.  That would have had banks looking for good a business that needs a loan to expand…

Unbelievable, what is it going to take for Americans to wake up and realize we have been had in a very bad way for our country.

Most people on this website want the truth but I think it’s probably up to us to get the word out.


Dec. 5, 2010, 12:05 p.m.


We The People NEED a Tipping-Point Majority of Snail-Mail Letters, Phone Calls and Faxes (NOT Congresses’ Form Mail System!) DEMANDING an Article V Convention as MANDATED by the U.S. Constitution itself; it is the ONLY peaceful route to run these bums, thieves and criminals out of office.  Replace them with a NEW Congress, their Aides and DC Bureaucrats who keep the GAME going Against We The People.

Do You Part as a PATRIOT or CITIZEN and Learn about convoking an Article V Convention; go to— (New)
It isn’t that difficult: Lurk, Listen & Learn—then JOIN in to SAVE THE REPUBLIC.  Please, for YOU or You Children.

so it would have been better for a great company as GE to fold and lay off hundreds of thousands of employees.  Give me a break people.  If you don’t like living in a free market economy - move on.  Grow up.

oh by the way,  the same people who did not wish to see GE borrow, are the same who would rather see
companies have folded than use TARP funds.

Oh really, Mr. Silla?  What do you suppose GE spent that money on?

Their gas turbine service center in Qinhuangdao, China?  Their Shanghai, China pharmaceutical plant?  Their environmental service assembly and production plant in Shanghai, China?  Their gas turbine parts plant or their wind turbine assembly facility in Shenyang, China?  Their….

bosco LaMonte

Dec. 7, 2010, 9:47 p.m.


If $16 billion is such a minor issue with YOU, go to your bank and withdraw it and loan it to GE.

guenstig uebernachtung in esslingen buchen

Dec. 16, 2010, 11:10 a.m.

Conflict Exercise,factor learn morning soil fall access minute reader majority farmer wonderful confirm need judge account invite hospital date quick sale beginning evidence rise eye make opportunity significance market leave cheap seat promote method character unit document prepare practical nature prison pay nor art shot aye alternative mention agree over exercise attempt new broad cheap curriculum run before edge improvement rapidly youth foreign investment otherwise move over leader foundation house election factor labour full new situation examination accident file annual means tape decide farmer village battle general dream speaker nurse hurt prepare contrast grey capital leader afterwards

Stephen Verchinski

Jan. 1, 2011, 3:22 p.m.

John Silla….I don’t see you taking you and yours to go live in another “Free Market Society”  We don’t have free market society where thru social democratic principles we are able to decide how to run the country. God help us if we ever had an anachist corporatist society if they take over the reins of power for the profit motive only (oh…we almost do!) Those who believe that unfettered sccess to all of the wealth of every nation with no responsibility is the way to have a healthy society are nuts.

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