Saturday, October 24, 2009

Waiting for a Reply

I have emailed Senator Bill Nelson (d FL) and Senator George LeMieux (R-FL) asking them to demand hearings into the GE TARP loan and why they were given preferential treatment.

Let's see what if anything I get in response

"Hi ,
I saw one of Obama’s hatchet men is dictating how much certain people can earn. You know as well as I if compensation limits are not addressed in the terms of the original loan, the government has no legal basis to demand them after the fact.
My concern is why some companies don’t have to reduce and restructure the compensation packages of their top executives while others do. Will you demand hearings to investigate why GE one of Obama’s biggest supporters has received preferential treatment by being allowed to maintain their executive compensation, and why the rules were changed so GE could meet the requirements to obtain billions in TARP funds?
I do expect a reply to my query.
I have provided excerpts of a June 29 article in the Washington Post; the full article provides details on what was done to benefit Jeffrey Immelt chairman and CEO of GE.

“How a Loophole Benefits GE in Bank Rescue
Industrial Giant Becomes Top Recipient in Debt-Guarantee Program

By Jeff Gerth and Brady Dennis
ProPublica and Washington Post Staff Writer Monday, June 29, 2009

Banking companies are regulated by the Federal Reserve and not allowed to engage in commerce, but federal law has allowed a small number of commercial companies to engage in banking under the lighter hand of the Office of Thrift Supervision. GE falls in the latter group because of its ownership of a Utah savings and loan.
Unlike other major lenders participating in the debt guarantee program, including Bank of America, Citigroup and J.P. Morgan Chase, GE has never been subject to the Fed's stress tests or its rules for limiting risk. Also unlike firms that have received bailout money in the Troubled Assets Relief Program, or TARP, GE is not subject to restrictions such as limits on executive compensation.”

Well I got a reply from George LeMieux.
Oct. 30th 2009
Dear Friend:Thank you for your correspondence on the Federal Reserve. I appreciate hearing from you and would like to respond to your concerns. As you know, Senator Bernard Sanders (I-VT) introduced the Federal Reserve Sunshine Act of 2009 (S.604). This legislation would direct the Comptroller General of the United States to complete an audit of the Federal Reserve banks and the Board of Governors before the end of 2010. The Comptroller General must also report to Congress with the findings of the audit and any recommendations for further action. This bill has been referred to the Senate Committee on Banking, Housing and Urban Affairs. While I am not a member of this committee, I will keep your thoughts in mind should it be brought to the Senate floor. It is an honor and privilege to serve the people of the great State of Florida in the United States Senate. I take great pride in being a native Floridian, and I look forward to the tremendous opportunity to better the lives of all Floridians. I assure you I will work hard to represent our state to the best of my ability in the U.S. Senate. If I can be of any further help to you, please do not hesitate to contact me.Sincerely,George S. LeMieuxUnited States Senator
Here is Bill Nelson's reply,
Nov. 5th 2009
Dear Mr. Ewetender:
Thank you for contacting me regarding financial regulatory reform. I believe we must review and improve how we regulate the financial services industry.The President recently proposed reforms to our financial system including: extending Federal regulation to all financial derivatives such as credit default swaps, requiring larger hedge funds to register with the Securities and Exchange Commission (SEC), creating a regulator to monitor the financial system for threats of excessive risk, and enabling the Federal Reserve to impose tougher standards on institutions that are judged to be so big that their failure would threaten the entire financial system. The proposed reforms would also establish a new agency to protect consumers from unfair and deceptive financial services, and allow for the takeover of major financial firms in emergency situations. Congress is currently debating these measures among others and is working to craft legislation that best meets the needs of our economy.I believe we must promote and support high standards in business while discouraging companies from acting recklessly and forcing others to clean up their mess. We can no longer allow our financial system to be held hostage by a few companies that are deemed too big to fail, and we must guard against excessive regulation and an uninhibited concentration of power that would degrade the values of a free-market society.I am glad that you took the time to send me your thoughts. As Congress considers measures to reform our financial system, I will keep your views in mind. Please don't hesitate to contact me in the future.
Senator Bill Nelson
P.S. From time to time, I compile electronic news briefs highlighting key issues and hot topics of particular importance to Floridians. If you'd like to receive these e-briefs, visit my Web site and sign up for them at

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