Taxpayer Fleecing Must Be Stopped

Taxpayer Fleecing Must Be Stopped

By Ed Koch - March 17, 2009

Apparently, even under a forward looking, honest, able and liberal president, the forces of government are such that the public -- like sheep meeting the shears -- is being fleeced again.

The average citizen is terrified about the future and does not fully comprehend the implications of all of the bailout money - trillions of dollars - that is being handed out to the business institutions. Those in charge of the carnage are telling the American people that we do not have the right to know how or where those trillions will end up. Because of public outrage over A.I.G., which has received $170 billion in bailout funds, this week A.I.G. released a partial list of the companies receiving TARP money, a list that includes Goldman Sachs, Merrill Lynch, Citigroup, Bank of America and Wachovia. While the payments are apparently legitimate, the attempted cover-up was infuriating.

Remember the phrase from the Nixon years and Watergate - follow the money. Well, it still applies. Prior to the release of the partial list of names, the Secretary of the Treasury and the Chairman of the Federal Reserve, who knew where the money was going, told us that it is "proprietary information" and not publicly available. Only the proprietor - the owner - should have that information.

When banks lend money to you, the consumer, they can and do put restrictions on what you can do with it. What is worse, in this case, is that as a result of our pushing money into the coffers of institutions like A.I.G., we, the American public, have become the real owners of those companies, and we have a right to know. We were promised transparency by the Obama administration.

The New York Times this week reported on another outrage relating to A.I.G. That company which has now, according to the Times of March 15, "received more than $170 billion in taxpayer bailout money from the Treasury and Federal Reserve, plans to pay about $165 million in bonuses by Sunday to 400 executives in the same business unit that brought the company to the brink of collapse last year."

Treasury Secretary Tim Geithner "told the firm they were unacceptable and demanded they be renegotiated, a senior administration official said. But the bonuses will go forward because lawyers said the firm was contractually obligated to pay them." Adding to the insult to the public is the revelation that "The payments to A.I.G.'s troubled financial products division are in addition to $121 million in previously scheduled bonuses for the company's senior executives and 6,400 employees across the sprawling corporation."

These are the very reasons A.I.G. should have been forced into bankruptcy before the bailout. No bankruptcy court would have permitted the bonuses to be paid or those granted bailout payments protected with anonymity. Remember who now owns A.I.G. According to the Times "A.I.G., nearly 80 percent of which is now owned by the government..." and the new chairman, Edward M. Liddy, is "government-appointed" In effect, a government owned and operated private sector company is giving out government tax dollars like there is no tomorrow, while trying to bar transparency.

The Times editorial of March 15 on the subject points out, "The bailouts of American International Group are also rescues of its trading partners - banks and other financial firms - that would have lost out if the insurer had been allowed to fail. But even after four bailouts between last September and this March, no one knows with certainty who those partners are or how much of the bailout money, now totaling $160 billion, has gone to make them whole." As a result of that editorial, we now have been given a partial list by A.I.G.

The Watchmen - Geithner and Bernanke - have sought to prevent transparency. President Obama trumpets transparency, even promising that the wonders of the Internet will be available for taxpayers to follow all government transactions involving the expenditure of taxpayer money.

Congresswoman Carolyn Maloney plaintively expressed taxpayer concerns when, in response to being told that information concerning the identity of TARP recipients is proprietary information and not available to the Congress, she said, "They have told others it is proprietary information. But we are the proprietors now. Taxpayers own the store, and we should be able to see the books." Indeed.

Where are all the blowhards in Congress who tell us they are protecting the public? Why don't we have a committee comparable to the committee that examined and publicly reported on 9-11? The devastation to the U.S. economy and individual Americans is enormous. Surely this self-inflicted debacle requires an honest reporting on how it happened and who was and is responsible in public office and in the private sector.

A non-Congressional blue ribbon panel should be appointed by the president forthwith while memories are fresh. TIME magazine recently identified 25 people who the magazine believes bear culpability. I have no doubt there are many times that number who, at the very least, deserve public identification and some who should end up in prison. Let's hold the thieves and their enablers accountable.

Ed Koch is the former Mayor of New York City.

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