Submission + - Banks won't say how they spent bailout funds (sfgate.com)
Andrew Jacksons' student writes: "After receiving billions in aid from U.S. taxpayers, the nation's largest banks say they can't track exactly how they're spending it. Some won't even talk about it. Congress wants to know how banks spent bailout. The AP contacted 21 banks that received at least $1 billion in government money and asked four questions: How much has been spent? What was it spent on? How much is being held in savings? What's the plan for the rest? None of the banks provided specific answers, and most refused to explain why they are keeping the information secret. Nearly every bank AP questioned — including Citigroup Inc. and Bank of America Corp., two of the largest recipients of bailout money — responded with generic public relations statements explaining that the money was being used to strengthen balance sheets and continue making loans to ease the credit crisis. We're not providing dollar-in, dollar-out tracking," said Barry Koling, a spokesman for Atlanta's SunTrust Banks Inc., which got $3.5 billion in taxpayer dollars. "We manage our capital in its aggregate," said Regions Financial Corp. spokesman Tim Deighton, who said the Birmingham, Ala., company is not tracking how it is spending the $3.5 billion it received as part of the financial bailout. The answers highlight the secrecy surrounding the Troubled Asset Relief Program, which earmarked $700 billion — about the size of the Netherlands' economy — to help rescue the financial industry. The Treasury Department has been using the money to buy stock in U.S. banks, hoping that the sudden inflow of cash will get banks to start lending money. Pressured by the Bush administration to approve the money quickly, Congress attached nearly no strings to the $700 billion bailout in October. And the Treasury Department, which doles out the money, never asked banks how it would be spent. "Those are legitimate questions that should have been asked on Day One," said Rep. Scott Garrett, R-N.J., a House Financial Services Committee member who opposed the bailout as it was rushed through Congress. "Where is the money going to go to? How is it going to be spent? When are we going to get a record on it?""
