Disaster Capitalism in Action

Banks Refuse to Publicly Disclose How Bailout Money is Being Spent

Naomi Klein — Tue, 23 Dec 2008 13:47:50 -0500

December 23rd, 2008

"'We've lent some of it. We've not lent some of it. We've not given any accounting of, "Here's how we're doing it," said Thomas Kelly, a spokesman for JPMorgan Chase, which received $25 billion in emergency bailout money. 'We have not disclosed that to the public. We're declining to.'

"The Associated Press 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, and what's the plan for the rest? None of the banks provided specific answers....

"No bank provided even the most basic accounting for the federal money. 'We're choosing not to disclose that,' said Kevin Heine, spokesman for Bank of New York Mellon, which received about $3 billion....Heine, the New York Mellon Corp. spokesman who said he wouldn't share spending specifics, added: 'I just would prefer if you wouldn't say that we're not going to discuss those details.'"

Utah Student Poses as Bidder, Disrupts Auction of Environmentally-Sensitive Land for Oil Drilling

Naomi Klein — Tue, 23 Dec 2008 13:18:31 -0500

December 23rd, 2008

AMY GOODMAN: While many environmental groups launched campaigns to oppose the sale of the land [environmentally sensitive federal lands in Utah being sold to oil companies], one student in Salt Lake City attempted to block the sale by disrupting the auction itself. Twenty-seven-year-old Tim DeChristopher posed as a potential bidder and bid hundreds of thousands of dollars on parcels of the land, driving up prices and winning some 22,000 acres for himself, without any intention of paying for them. The Bureau of Land Management must now wait over a month before it can auction off these properties, but by then the bureau will no longer be run by the Bush administration....

TIM DECHRISTOPHER: I started off, actually, at a final exam at the university and went straight from there down to the BLM office. And I saw some protesters walking back and forth outside, and I knew that I wanted to do more than that and that this kind of injustice demanded a higher level of disruption. And so, I just decided that I wanted to go inside and cause a bigger disruption.

Bailed Out Banks Give $1.6 Billion to Executives

Naomi Klein — Tue, 23 Dec 2008 13:33:01 -0500

December 23rd, 2008

"Banks that have their hands out in Washington this year were handing out multimillion-dollar rewards to their executives last year. The 116 banks that so far have received taxpayer dollars to boost them through the economic crisis gave their top tier of executives nearly $1.6 billion in salaries, bonuses and other benefits in 2007, an Associated Press analysis found.

"That amount, spread among the 600 highest paid bank executives, would cover the bailout money given to several banks that have shared in the $188 billion that Washington has doled out in rescue packages so far.

"Some banks trimmed their executive compensation in the face of faltering performance that foreshadowed the current economic crisis, but they still granted multimillion-dollar packages. Benefits included cash bonuses, stock options, personal use of company jets and chauffeurs, home security, country club memberships and professional money management, the AP review of federal securities documents found."

Senator: Executive Pay Limits in Bailout "Are All but Gone"

Naomi Klein — Tue, 23 Dec 2008 13:56:56 -0500

December 23rd, 2008

"Congress wanted to guarantee that the $700 billion financial bailout would limit the eye-popping pay of Wall Street executives, so lawmakers included a mechanism for reviewing executive compensation and penalizing firms that break the rules. But at the last minute, the Bush administration insisted on a one-sentence change to the provision, congressional aides said. The change stipulated that the penalty would apply only to firms that received bailout funds by selling troubled assets to the government in an auction, which was the way the Treasury Department had said it planned to use the money.

Chicago Factory Workers Win!

Naomi Klein — Thu, 11 Dec 2008 01:01:48 -0500

December 11th, 2008

"Jubilant workers, cheering and chanting "Yes We Can," celebrated outside a Chicago factory after approving a $1.75 million agreement to end their six-day sit-in, a dispute that became a symbol of the plight of labor nationwide. Republic Windows & Doors, union leaders and Bank of America reached the deal Wednesday night.....

"Each former Republic employee will get eight weeks' salary, all accrued vacation pay and two months' paid health care, said U.S. Rep. Luis Gutierrez, who helped broker the deal. He said it works out to about $7,000 apiece."

Workers Occupying Chicago Factory Suffer as Bank of America Renegs on its $25 Billion Bailout Commitment to Extend Lending

Naomi Klein — Tue, 9 Dec 2008 02:36:43 -0500

December 9th, 2008

The nation's grim economy now has a rallying point: Employees at a window-and-door factory that went out of business have taken over the building in a siege that has come to symbolize the woes of the ordinary worker.

The Republic Windows and Doors factory closed abruptly last week after Bank of America canceled the company's financing. Since then, about 200 of the 240 laid-off workers have taken turns occupying the factory, declaring that they will not leave until getting assurances they will receive severance and accrued vacation pay....

Blagojevich on Monday ordered all state agencies to stop doing business with Bank of America to pressure the bank into using federal bailout money it received to help the laid-off workers. "We hope that this kind of leverage and pressure will encourage Bank of America to do the right thing for this business," Blagojevich said outside the plant. "Take some of that federal tax money that they've received and invest it by providing the necessary credit to this company so these workers can keep their jobs."

Report: Prospective FEMA Chief Overbilled Louisiana for Katrina Cleanup

Naomi Klein — Thu, 27 Nov 2008 11:32:06 -0500

November 27th, 2008

"There's increasing talk that former director James Lee Witt, who took over the then-troubled agency at the start of the Clinton administration and left it eight years later with a much-enhanced reputation, is coming back from retirement to run FEMA for six months to a year, to whip it into shape....

"Witt, however, is likely to be grilled about his work on Katrina relief. Witt and Merritt began their work in the days after the hurricane, when Louisiana Gov. Kathleen Babineaux Blanco (D) hired their disaster recovery firm with an open-ended no-bid contract.

Jay Garner, Former Administrator for Iraq, Now Helping Canadian Companies Secure Oil Deals in Kurdistan

Naomi Klein — Thu, 27 Nov 2008 11:49:21 -0500

November 27th, 2008

"In the history of the Iraq War, one name is perhaps synonymous with the collapse of the Bush administration's hopes for a post-Saddam world: Retired Lt. General Jay M. Garner. It was Garner who served as the first post-war administrator for Iraq, running the country during the fateful two months immediately following the invasion before being replaced by L. Paul Bremer III.

"However, Garner's frustrating tenure in Iraq wasn't entirely wasted. This year, he and a small group of former US military leaders, officials, and lobbyists have quietly used their deep connections in Kurdistan to help Canadian companies access some of the region's richest oil fields....

Firms Receiving Bailout Funds Continue Multi-Million Dollar Sports Sponsorships

Naomi Klein — Thu, 27 Nov 2008 11:56:59 -0500

November 27th, 2008

"AIG, Citibank and a number of other federally bailed-out financial institutions have no plans to cancel hundreds of millions of dollars in sports team sponsorships, even as they take billions in taxpayer support, ABC News has found....

"Struggling Citibank just sealed a multi-billion-dollar emergency "backstop" deal with the U.S. government. The financial behemoth, suffering with billions in bad mortgage-related assets on its books, recently shed 53,000 workers and saw its stock price lose over half its value. Yet it's in a 20-year contract to pay the New York Mets $400 million to name the team's new stadium 'Citi Field'....

"Citi isn't alone: Imploding insurance giant AIG is paying the British soccer team Manchester United $125 million for the privilege of having its logo appear on Man U's uniforms. That, despite the fact the firm is standing largely thanks to a $150 billion lifeline from the U.S. Treasury."

Bailout Lacks Oversight Despite Billions Pledged

Naomi Klein — Fri, 14 Nov 2008 10:30:32 -0500

November 14th, 2008

"The Bush administration has committed $290 billion of the $700 billion rescue package. Yet for all this activity, no formal action has been taken to fill the independent oversight posts established by Congress when it approved the bailout to prevent corruption and government waste. Nor has the first monitoring report required by lawmakers been completed, though the initial deadline has passed.

"'It's a mess,' said Eric M. Thorson, the Treasury Department's inspector general, who has been working to oversee the bailout program until the newly created position of special inspector general is filled. 'I don't think anyone understands right now how we're going to do proper oversight of this thing.'"