Thursday, May 21, 2009

Eye Opening Bank Bailout Documents Released Under FOIA Pressure

A friend has brought to my attention some recent news out of Judicial Watch (JW).

JW, the conservative oriented public interest group that investigates and prosecutes government corruption, announced that it recently forced the release of documents about the October 13, 2008, Treasury Department meeting that coerced major banks into taking government bailout money.

Among other details, the documents confirm former Treasury Secretary Hank Paulson told the CEOs of nine major banks that they had no choice but to allow the government to take equity stakes in their institutions. The documents show Obama Treasury Secretary Tim Geithner, FDIC Chairman Shelia Blair, and Fed Chairman Ben Bernanke attended the meeting with Paulson.

JW filed a Freedom of Information Act (FOIA) request about the bankers meeting on October 16, 2008. After months of stonewalling, a FOIA lawsuit was filed against the Obama Treasury Department on January 27, 2009. On February 4, get this, the Treasury responded that it had no documents about the historic meeting. Pressure from JW forced Treasury to reevaluate its response, which resulted in this document release. Included in the documents are:

"CEO Talking Points" used by former Treasury Secretary Hank Paulson confirming that the nine bank CEOs present at the October 13 meeting had no choice but to accede to the government's demands for equity stakes and the resulting government control. The talking points emphasize the muscle warnings Paulson should giv ethe banks that "if a capital infusion is not appealing, you should be aware your regulator will require it in any circumstance."

There's probably more dirt surrounding the Talking Points but edits of the Talking Points suggested by Tim Geithner, then-New York Fed President, were not released to JW.

"Major Financial Institution Participation Commitments" signed by the nine bankers on October 13. The CEOs not only hand wrote their institution's names but also hand wrote multi-billion dollar amounts of "preferred shares" to be issued to the government. You have to see this doc to believe it.

An email documenting that, on the very day of the meeting, the Chief of Staff to the Treasury Secretary and other top Treasury staff did not know the names of any of the banks that would be in attendance.

An email showing Treasury officials wanted to use the Secret Service to help keep the press away from the CEOs arriving at the meeting.

An email showing a public relations effort, run in part out of the Bush White House, to tamp down public concerns about "nationalizing the banks."

An email showing that Paulson was able to brief Barack Obama about the bankers meeting almost immediately, but could not reach Senator John McCain.

The CEOs present at the October 13 meeting were Vikram Pandit of Citigroup, Jamie Dimon of JP Morgan, Richard Kovacevich of Wells Fargo, John Thain of Merrill Lynch, John Mack of Morgan Stanley, Lloyd Blankfein of Goldman Sachs, Robert Kelly of Bank of New York, and Ronald Logue of State Street Bank.

"These documents show our government exercising unrestrained power over the private sector. Despite promises of transparency, the Obama administration tried to cover up the very existence of these smoking-gun documents. And the cover-up continues, as the Obama administration protects Timothy Geithner by withholding a key document about his role in this infamous bankers meeting," stated JW President Tom Fitton.

Here is the full document dump:

Documents Part 1
Documents Part 2
Documents Part 3


  1. The links don't work.

  2. I get 404 error on your pdf links but I've seen the docs elsewhere and I could hardly believe my own eyes. Be sure to note the last minute correction to the value of GS shares issued from $25 to $10bn.

  3. When the mafia insists on becoming a partner in your business it is called "extortion", when the government does it, it is called a "rescue package"