Henry A. Waxman, a California Democrat who heads the House Committee on Oversight and Reform, sent letters this week to the chief executives of nine banks slated to receive $125 million in aid from the Treasury Department.

 

He requested information on their compensation and bonus plans, noting that public filings show that those companies spent or reserved $108 billion for those purposes in the first nine months of 2008 - nearly the same amount as last year.

 

Waxman noted that some news reports suggesting that year-end bonuses would be bolstered by the infusion of federal money.

 

"While I understand the need to pay the salaries of employees, I question the appropriateness of depleting the capital that taxpayers just injected in the banks through payment of billions of dollars in bonuses, especially after one of the financial industry's worst years on record,'' he wrote.

House Republicans Were Right on the Bailout

House Republicans voted down the first bailout bill because they were afraid it would become just another government boondoggle. But after it was loaded up with more pork than all the pigs in Iowa, they changed their minds. Guess what? It has become just another government boondoggle. Sec. Henry Paulson's idea was to buy up all the toxic mortgages to get them off the banks' books. He long since shelved that plan. His next idea was to buy stock in the banks so they would have fresh capital and could start making loans again. However, instead of making loans, some banks are using the money to pay dividends, give executives bonuses, and buy other banks. For example, PNC Financial Services received $7.7 billion in government money and promptly spent $5.6 billion of it to buy National City Corp. Lawmakers are protesting but they should hardly be surprised since they gave Paulson unlimited authority to spend the money any way he wanted to, with hardly any supervision and no restrictions on what the recipients did with the money. In addition, Paulson hired the Bank of New York Mellon to run the program. On the same day Bank of New York Mellon received $3 billion itself, apparently deciding that it could use some cash. Hardly anyone noticed.