Kucinich focuses attention on bailouts given to big banks.
UPDATE! 04/04
First video, April 2, 2009
REPORTER: All right, listen to this: If you are angry about the AIG bonuses, you better cover your ears for this next segment; ear muffs, everyone. Because our next guest is angry about a bailout bonus scandal that he says no one is talking about. And it has already cost American taxpayers billions -- that's right: with a "B" -- of dollars. Joining me is Democratic congressman, Dennis Kucinich of Ohio. He's the Chairman of the Domestic Policy Subcommittee in the House. Congressman, thanks so much for joining us this morning.
DENNIS: Thank you. Good morning.
REPORTER: You say that because of you, basically, appearing here on America's Newsroom, we are just now finding out about these huge billions of dollars worth of bonuses that were paid out to Bank of America or Merrill Lynch right before we gave them billions of dollars in TARP money. Explain this to us.
DENNIS: Merrill Lynch knew it was getting 10 billion dollars in TARP funds at the same time they were preparing to give 3.7 billion dollars in bonuses -- performance bonuses -- to their top executives at a time that they were losing 15 billion dollars in the fourth quarter. The United States had 800 thousand preferred shares. The shareholders of Bank of America, which eventually took over Merrill Lynch with the help of 25 billion dollars from the U.S. taxpayers, they were clueless. I'm trying to find out, "What did the United States Government know? Did they know that Merrill Lynch was giving these 3.7 billion in bonuses? What did Bank of America know? Did they know that Merrill Lynch was giving these 3.7 billion in bonuses?"
These bonuses are 22 times the bonuses that the AIG executives received. And this is not a small matter because it's U.S. taxpayers' dollars. People were told that, unless Bank of America got the money to take over Merrill Lynch, everything was going to collapse. And yet they gamed the taxpayers. I see this as a theft from the U.S. taxpayers, and we're on it, and we're going to stay on it.
REPORTER: Congressman, this is so incredible, what you've just told us; that the number was 22 times the 165 million-dollar bonuses to AIG that caused such a human cry that went out around the country. Why are we just learning about this now?
DENNIS: Well, I think that there was a certain amount of misdirection -- attention to the AIG bonus -- which is not a small matter, 165 million dollars. But I think the human cry about that was to divert attention away from the fact that Bank of America was sending over 40 billion dollars to counter parties, including people that shipped the money out of hte country; much bigger issue.
However, in this case, here is a clear case of people getting performance bonuses while a company is losing 15 billion dollars, in such trouble that they had to be taken over by Bank of America with another 25 billion from the taxpayers to facilitate that. And meanwhile, 3.7 billion in bonuses, the U.S. Government had 800 thousand preferred shares and warrants. What did our Government know about it? Bank of America owed it to their shareholders; why didn't they disclose it? I've sent letters to the head of the TARP fund, Neel Kashkari, the head of Bank of America and also the head of The Fed to see what everyone knew. And we're going to disclose what they knew to the American people.
REPORTER: These were paid out on December 8th. Which officials at this point, through your investigation, do you think knew about this?
DENNIS: It seems to me that U.S. officials would have to have known. And certainly, due diligence would require that Bank of America know exactly the condition of Merrill Lynch and whether or not there were substantial bonuses given.
Understand this: Who do these bonuses go to? Only Vice Presidents or people at a higher level. So these were bonuses that went to the top employees of Merrill Lynch. And they were performance bonuses; they weren't retention bonuses or any other kind of bonuses; they were performance bonuses. Think about it. Who do you know who gets a performance bonus in total of 3.7 billion when their company loses 15 billion and is in such shape that they have to be taken over by another company? I mean, this is an outrage. Especially because it involves U.S. taxpayers' dollars.
REPORTER: It is shocking. And as you know, the White House just put pressure on the head of GM to resign. Is it time for this CEO of Bank of America, Ken Lewis, to go?
DENNIS: Well, I think we have to see his response to this. Because this really raises questions about what Bank of America knew, and when did they know it, and whether they let their shareholders know. So I don't want to draw a conclusion about individual culpability until we get the responses from Mr. Bernanke, Mr. Kashkari, and Mr. Lewis.
REPORTER: How much support have you gotten on Capitol Hill for your investigation? Of course we know during the AIG bonus scandal, everyone was grabbing their bully pulpit to express all the outrage. Why not about this now?
DENNIS: You know, there are so many things going on in our economy, with all the people losing jobs and retirement security being in jeopardy, people without health care, people losing their homes. It's not as though there aren't other things happening, and Congress today is looking at the budget. But I'm just saying as the Chairman of Domestic Policy Subcommittee, we're focused on how the TARP money is being used. Wherever there is abuse, we're going to expose it. And this one looks like a whopper.
REPORTER: Congressman Dennis Kucinich, thanks so much for bringing it to our attention this morning.
