[Congressional Record (Bound Edition), Volume 155 (2009), Part 1]
[House]
[Pages 577-580]
[From the U.S. Government Publishing Office, www.gpo.gov]




            WALL STREET'S BANKSTERS ARE COMING BACK TO MAMA

  The SPEAKER pro tempore. Under the Speaker's announced policy of 
January 6, 2009, the gentlewoman from Ohio (Ms. Kaptur) is recognized 
for 60 minutes as the designee of the majority leader.
  Ms. KAPTUR. Mr. Speaker, wake up, America. Get your telephone calls 
going to Congress. Set up your robodials in gear. Wall Street's 
banksters are coming back to mama. Here they come again, and shame on 
us if we let them do it to us again.
  America, pay attention. Batten down the hatches. Let your Member of 
Congress know the banksters are coming back to mama.
  We are about to be taken for a ride by the banksters again. These 
banksters bank on us making the taxpayers pay again.
  Don't let them do it. Why? Because what they are doing is trampling 
our democracy. We are getting set to have another piece of legislation 
crammed through the Congress regarding the bailout. They call it TARP, 
the Troubled Assets Relief Program. It's the old bank bailout bill from 
last year.
  Despite the fact that due deliberation is required of us as Members 
of Congress through regular order of this House, and, frankly, our 
Constitution,

[[Page 578]]

this new cram down comes with a twist. Instead of not holding any 
hearings on the reform of the TARP, like happened last time, and only 
letting us see the bill 18 hours before $700 billion of the taxpayers' 
money was to be put on the table, one hearing is being held, exactly 
one, tomorrow, and it happens to be being held at the same time that 
amendments to that bill are supposed to be filed upstairs in the Rules 
Committee.
  So Members who spent over 20 years on that committee are unable to 
take what they hear at the hearing, and the information learned, to 
make recommendations for amendments to the Rules Committee. Any Member 
who might not be on the committee, and who wants to go to the hearing 
and listen, and then maybe propose amendments, well, you can't do that 
because it's being held at the same time.
  The committee will be holding the hearing here in the Capitol where 
most Americans can no longer afford to travel. They are not bothering 
to go out to the country, to the communities that have been so badly 
devastated by the rising foreclosure crisis, that the TARP, the bank 
bailout bill is not solving.
  No, the public won't be included, and the subpoena power of the 
committee will not be used. So here we go, the banksters are back. They 
want another $350 billion of our taxpayers' money, and the 
deliberations inside this Chamber are throttled. Isn't that sad, 
particularly given what happened to the first 350 billion. Once again, 
we are being pushed and told we have to hurry this up. We are going to 
have a new President. So we are told to hurry up and be hasty and not 
be thoughtful, because, of course, something might happen. But you know 
what? It's already happening.
  What we are doing isn't working. But we are going to have to be 
voting this week on a big unthinkable wad of our taxpayers' money, $350 
billion more. And if we learned anything from the release of the first 
half of the TARP funds, it's that hurried legislative action brings 
undesired and sloppy results.
  Back in the fall we were told we didn't have the time to be 
deliberative, that if we didn't pass it, the economy was going to 
continue a downward spiral, that the economy would crash, and we would 
be to blame.
  Well, some Members voted for it, and it passed, and guess what 
happened? What they said wouldn't. Never mind that Secretary Paulson's 
management of the economy and the bailout still has resulted in 1.2 
million jobs lost in November and December. Believe me, people in my 
State know what those numbers really mean.
  One in 10 homeowners are in arrears or in foreclosure, imagine that, 
10 percent of the people who own homes in this country.

                              {time}  2000

  And $4 trillion of wealth has been lost by our families. The American 
people were played, and $350 billion later Secretary Paulson has given 
us no progress for the American people. We are in a deeper economic 
hole than when we began.
  TARP isn't working. It hasn't stemmed the foreclosure crisis, which 
is at the heart of what is wrong with our economy. It didn't help 
unfreeze credit inside our financial system. The auto industry didn't 
go into a nose-dive because people didn't want to buy cars. They 
couldn't get the loans from the banks to buy the cars because the 
housing foreclosure crisis froze up the credit system. Instead, TARP 
has brought the auto industry and hundreds of thousands of businesses 
across our country to their knees.
  A staggering 693,000 jobs were lost across this country in the last 
month, three-quarters of a million, following 533,000 jobs the month 
before, half a million more. There are now nearly four job seekers for 
every one job opening. And, again, one in ten homeowners nationwide are 
now in arrears or facing foreclosure. My advice to people in that 
position: Don't leave your property. You claim your own property, 
because chances are if you had a good lawyer and they went to court on 
your behalf, they couldn't find who really holds your mortgage. If they 
go to the Truth in Lending laws, you might be surprised. The law might 
be on your side. Don't leave your property.
  So what have the banks done with all this money? Shouldn't we know 
that before we vote to give them more? I ask every Member of Congress, 
shouldn't we know where the money went and what they did with it? Have 
they reworked mortgages and started lending again? No. No, they have 
not. Instead, they have had a party buying one another up. The big 
banks, particularly the Wall Street banks, they are getting bigger. 
Community banks are under stress. Many State-Headquartered banks are 
being bought by the bigger banks.
  PNC, already one of the Nation's largest banks, bought National City 
Bank in Ohio. They are throwing 4,000 people out of work in Cleveland, 
Ohio. But PNC became, hold on to your seats now, the fifth largest bank 
in the United States from the infusion of TARP funds it received. The 
fifth largest bank in our country, and their corporate expansion bought 
and paid for by you, our taxpayers.
  Now, look at who else is getting bigger. Last night, CBS news 
reported on CBS.com that Bank of America received $15 billion, and then 
they bought Merrill Lynch, that had gotten $10 billion even as it was 
put up for sale. Total that up. That is $25 billion. Now Morgan 
Stanley, the recipient of $10 billion, is buying China Trust Bank. 
Another half dozen banks, including M&T, Capital One Bank, US Bancorp, 
Hampton Roads Bankshares and PNC, got bailout money, and then they 
bought up other banks. They just keep getting bigger. And what is 
interesting about that, under the law, when they buy another bank, they 
can probably book losses on their 2008 tax returns.
  It is very interesting how the financial system works on behalf of 
the big, and yet for those losing their homes, they have almost no one 
to represent them. They are having a royal time with our money, the 
banksters up there on Wall Street.
  Money Morning reports the 116 banks that are receiving billions in 
taxpayer-provided bailout money this year actually paid out $1.6 
billion in compensation to their executives, plus benefits, even though 
the results at some of these institutions were so poor that they would 
soon have to turn to Washington for government-engineered rescues. The 
$1.6 billion in compensation and benefits to the banksters was paid out 
to nearly 600 executives at the 116 banks that have so far accepted 
Federal money to bolster their financial situation.
  The Associated Press concluded after a review of U.S. security 
filings that in addition to salary, the compensation included bonuses 
paid in both cash and stock. The benefits reaped by top executives 
included the use of company jets for personal purposes, personal 
chauffeurs, home security services, country club memberships and 
professional wealth management services, the news service said.
  Now, let's give them credit. These banksters know how to walk our 
money around. They even know how to create money when there isn't any 
there. They create fancy names; derivatives, credit default swaps and 
collateralized debt obligations. But those instruments are not worth 
anything, because the underlying assets cannot pay back the money if 
someone tries to collect it. That is usually called fraud or money 
laundering.
  But could it be a cruel twist of fate that the Secretary of the 
Treasury, Mr. Paulson, former chief executive officer of Goldman Sachs, 
oddly took care of Goldman, his firm, first during all of this, making 
it a bank holding company, so it could get its nose under the tent 
cover--I mean qualify for Federal insurance, like the well-run banks 
do, which had paid into the insurance system. He did that for his own 
institution, but then he shed crocodile tears and he pushed Lehman 
Brothers overboard with no mercy. I would really like to know the full 
truth behind that story.
  But then Mr. Paulson, by coincidence surely, picked his top money man 
at Goldman Sachs and moved him too, lock stock and barrel, into the 
U.S. Treasury to hand out our cash. Now,

[[Page 579]]

this surely must have been done accidentally. How can you have two men 
from the same Wall Street firm delegated all this power? Oh, you might 
have heard his name. It is Mr. Kashkari. Yes, Neel Kashkari. He came 
from Goldman.
  It must surely be another coincidence that Goldman was also Wall 
Street's largest contributor to Federal campaigns last year. Check it 
out yourself at opensecrets.org. That is a Web site, opensecrets.org. 
In fact, Wall Street overall became the largest donor to Federal 
elections. And they are not showing any signs of slowing down. 
According to the Wall Street Journal, 90 percent of donations received 
so far for the Inaugural Committee have been raised by well-heeled 
fund-raisers, including Wall Street executives whose companies have 
received billions of dollars in Federal bailout money.
  Well, think about that one. Of the 207 fund-raisers that have 
collected $24.8 million of the $27.3 million in contributions through 
Thursday for the coming inauguration, according to an analysis by the 
nonpartisan campaign finance group Public Citizen, Wall Street 
employees as a group have been the biggest single source of these 
donations. Much of their donations, in fact $5.7 million total, has 
been channeled through financial services executives who each have 
bundled together donations worth hundreds of thousands of dollars.
  Goldman Sachs has provided $175,000 in donations primarily through 
the bundling efforts of Jennifer Scully, who has raised over $100,000; 
Bruce Heyman who raised $50,000, including $10,000 of his own money; 
and another gentleman, David Heller, who donated another $25,000. Think 
about what is going on here.
  But, you know, a lot of people say they don't influence peddle. 
Banksters don't influence peddle. They just want good government. Sure 
they do. Of course, all this is accidental. Nobody planned it this way. 
Just like Bernie Madoff. Oh, he didn't plan anything either. Some might 
believe what these banksters do in their private affairs has absolutely 
no relationship to what happens here in Washington, and if you believe 
that, you were born yesterday. Fool me once, shame on you; fool me 
twice, shame on me.
  There are problems with the bill drafted to address the 
administration's mishandling of the bailout. This is the bill that is 
going to come before us, we think, H.R. 384, the TARP Reform 
Accountability Act of 2009. TARP doesn't need reforming. We need to 
kill it. We need to put the attention at the Federal Deposition 
Insurance Corporation and the Securities and Exchange Commission in 
order to resolve the interbank lending problem and the foreclosure 
credit crisis. We don't need to give this job to the Treasury. The 
wrong agency has the lead.
  Let's look at title II, called ``foreclosure relief.'' Number one, 
the legislation provides no new plan to stop foreclosures. That is what 
it was passed to do in the first place. This bill doesn't have it 
either. It continues to do more of the same, which simply hasn't 
worked. Servicers are not motivated through this bill to modify loans, 
because they are making money hand-over-fist servicing defaulted loans, 
foreclosing on loans and profiting from real estate that they have come 
to own. And they are awaiting booking huge tax losses on their 2008 
income tax filings. The Tax Code favors them, not us, not the people 
who sent me here.
  This legislation that is proposed does not help homeowners defend 
themselves against criminal acts of fraud being perpetrated against 
them in processing foreclosures. A majority of the loans originated 
between 2000 and 2008 have legal defenses against foreclosures, but 
because the scheme has drained consumers of financial resources and 
because there are so few consumer law attorneys who know how to raise 
these defenses in a court of law, consumers have no access to their 
rights, for example, under the Truth in Lending Act.
  The legislation continues to shift both the risk and the cost of the 
program off corporations who perpetrated the scheme and on to 
homeowners, our American taxpayers. The legislation does not address 
the root of the problem and it will be just as ineffective as the first 
round of TARP funding in addressing the core problem, the home 
foreclosure crisis. The current loan modification restrictions are 
unsustainable and they will redefault.
  Let's go to title V, and I can't go through every title tonight, 
called Hope For Homeowners Program Improvements. Hope for Homeowners 
consists of industry players who created the mortgage mess to begin 
with. They are milking the system and not providing any relief to 
homeowners now. New nonprofit companies and loan modification companies 
are cropping up all over, and most of these have been established by 
the very mortgage brokers who defrauded consumers and sold them into 
subprime slavery. They should not now be rewarded with a new business 
opportunity to revictimize the victims.
  So let's look at some recommendations that make sense. The bill that 
will be sent to us will not correct the root of the problem and it will 
not achieve the goal of preventing foreclosures and keeping people in 
their homes. There are many effective foreclosure prevention strategies 
being deployed by attorneys and advocates, and we need to translate 
these into systemic solutions.
  We need to investigate, and it is a sham that this Congress is not 
doing appropriate oversight; how the shadow banking sector created by 
the Wall Street investment banks after the repeal of Glass-Steagall, 
which was called Gramm-Leach-Bliley, constructed a private money 
creation system that in a short 10 years equals or exceeds the assets 
of all regulated banks nationwide.
  In short there are solutions. We need a consumer-centric model. What 
we have now is a creditor-centric model. It will eventually lead to a 
complete collapse, because consumers and taxpayers cannot handle this 
burden.
  Let's go back to Ohio and take the case of National City, which has 
been an institution headquartered in Ohio, in Cleveland, since 1845.

                              {time}  2015

  Now, Treasury's money, the taxpayers' money, our money, went to 
another out-of-state bank, PNC, of Pittsburgh, whose vice president, 
Mr. Demchuk, invented the derivative instrument. They came to Ohio, 
PNC, and they bought National City Bank, putting all the National City 
Bank employees on notice with pink slips, 4,000 of them, that they 
would be out of work on the tape. PNC became bigger.
  So what Mr. Kashkari did was take our money and give it to PNC, that 
hasn't worked out any of its mortgage loans. They, then, came to Ohio 
and bought out National City Bank. So PNC got bigger, our banking 
system gets more concentrated, and PNC became more powerful. Some say 
they actually have price control power now over all of Western 
Pennsylvania.
  So, PNC got $7.5 billion from us. Cleveland and Ohio lose a Fortune 
500 company. They lose 4,000 National City Bank workers, and in Ohio, 
foreclosures are raging. And Ohio, it gets nothing. We get nothing. We 
need $20 billion just to fix what's wrong in Ohio. But all we get is 
more foreclosures.
  Now, take another institution. In 2008, Citigroup, one of the main 
culprits that caused the financial meltdown, was bestowed $25 billion. 
They got more than PNC. They got it from us, the taxpayer. And then 
they just kept foreclosing. In my district alone, another 235 families 
just were told, you're out of your house.
  Last November I found an advertisement in my local paper that said 
there was going to be an auction in my home community, and I was 
surprised. I didn't know the company coming in. It was called Hudson 
and Marshall of Dallas, Texas. So I went to the auction.
  And guess what? Citigroup was one of the banks selling the properties 
through Hudson Marshall. I attended. And I watched homes in my 
community sold for as little as $7,900, a price so low that we could 
have put the original owners back in those homes.

[[Page 580]]

  Not only was Citigroup auctioning homes that night, but so were lots 
of other bailout recipients. Those are the banks that got the money 
from Treasury through us. Here they are: Wells Fargo, US Bank, Deutsche 
Bank, ABN/Amro, Chase Home Finance, Fifth Third Bank, Standard Federal, 
and LaSalle. They all got the money, and then they turned their backs 
on the very people that they were meant to help. That's what the people 
who passed the bailout bill last year said, that we would help those 
being foreclosed. But that hasn't happened.
  It is clear that the recipients of the Treasury money are unwilling 
to craft real workouts. And so what happens in our region is people 
just keep getting kicked out of their homes.
  Wall Street hired the auction company from Dallas, Texas. They didn't 
even hire an Ohio auctioneer. They came to our region. They sold all 
those properties for very little money. And they're going to get big, 
huge tax losses written off their IRS filings for the tax year of 2008.
  But where are our families who lost their homes? Out on the street. 
Our people lost their homes and they lost their way of life.
  I would like to invite Mr. Kashkari and Secretary Paulson and all the 
PNC executives to come to Ohio. I want you to live in one of the 
neighborhoods that your actions have affected. We're going to give you 
a little heater, a Bunsen burner heater overnight so you don't get too 
cold in those houses. And we'd like you to experience the results of 
what you are doing to the American people. You're holed up here in 
Washington with lots of security.
  We need to get people back on Main Street. That's where we represent. 
Last year 4,100 homes, just in my home county, were foreclosed. And in 
the last 2\1/2\ years, 10 percent of the properties in my home 
community foreclosed. 10 percent of the entire housing stock. And as 
foreclosure rates continue to rise in places like Ohio, it's pretty 
obvious that what's happening here in Washington isn't connecting to 
Main Street.
  Why don't people here see that? Why are people afraid to look at the 
details of what's being proposed to us and say, no, no, to the 
banksters?
  Sadly, Hudson and Marshall, the auction house that Wall Street hired 
to sell all those homes in my community, they're coming to your town 
too. This month alone they're slated to be in several cities, in 
Michigan, Arizona, Connecticut, Massachusetts, Rhode Island, New 
Jersey. Think about this. Think how much money they are making. And 
they're going to auction at least 1,455 properties. They've now sold 
over 70,000 homes just in the last few years, and they are expecting, 
just this one company, to sell another, to auction another 30,000 
properties in 2009.
  Mr. Paulson and Mr. Kashkari, your program isn't working.
  What is happening is an outrage to the American people, and they are 
being asked to pay for this. There shouldn't be any more TARP bills 
clearing this Congress. Full hearings must be held in the communities 
being affected, not some little hearing up here in one room in the 
Capitol on one afternoon or in a couple of hours. We need to use our 
power to get to the truth and represent the voters that sent us here.
  Equity is bleeding profusely from our communities, and the sheer 
volume of the properties sold at auction is disturbing. Financial 
institutions which have been capitalized through the TARP program have 
failed to do mortgage workouts. FDIC and SEC are the institutions to 
take care of this mess, and they must be required to do mortgage 
workouts, rather than foreclosing on homes and participating in these 
auctions.
  Hudson and Marshall stated in a press release today that they have 
made over $1.2 billion recently doing auctions. $1.2 billion. These are 
dollars that could have been turned to do mortgage workouts at the 
local level and put people back in their homes.
  The intent of the TARP was to help stabilize our financial system, 
which includes, in large measure, our housing industry. Yet, what are 
the financial institutions doing? Enriching themselves, merging, 
creating mega-giant institutions and foreclosing on families, rather 
than working to stabilize families and neighborhoods across this 
country.
  A stable home permits people to focus on obtaining and maintaining 
employment, purchasing food and contributing to society in positive 
ways, rather than relying on Social Services funded by State and 
Federal dollars.
  We see communities falling apart. Community members and local banks 
are effectively locked out of the opportunity to reinvest in themselves 
because monies from the Department of Housing and Urban Development, 
which we were told would get to the communities so they could buy these 
homes, guess what? They're not there. They weren't there in October. 
They weren't there in November, they weren't there in December. They're 
not there in January. Now we're told maybe they'll be there by March. 
Nobody seems to know. So all of these programs that were supposed to 
work to help the American people who are paying the bill aren't 
working.
  No second round of bailout money, under TARP, should emerge from this 
Congress unless real hearings are held under all the committees of 
jurisdiction, unless the subpoena powers of this Congress are used, and 
that the victims of this crisis can have their voices heard in the 
deliberative process, not just here in Washington but where they live, 
where we live, in the real America. The committees should treat the 
American people with respect, and they should travel to the communities 
most impacted.
  Why should we trust the banksters, those Wall Street banks that are 
going to be up here again this week, as we watch families in our 
regions pushed over the edge every day of every month, as the year 
proceeds?
  Mr. Speaker, this is probably the worst financial crime I've ever 
seen committed against the American people. And yet, Congress seems 
almost somnambulant. It seems to be walking around in a daze, the 
institution largely shut down, all of this happening before the new 
President even assumes office.
  Think about the politics of the timing of this. I think the new 
President should suspend foreclosures. He should make a statement on 
that, and he should ask that this action be suspended. What's going to 
happen in 7 days that hasn't happened already? And then assume office 
and appoint people at the FDIC and SEC who will use the normal means to 
resolve real estate problems across the banking system of this country.
  To give $350 billion more, 1/3 of a trillion dollars, to the 
banksters who have led America to this precipice, is absolutely 
backwards.
  I ask my colleagues, wake up.
  I ask the American people, get your calls coming in. Let's let the 
new President and the new Congress use the full powers they have been 
given to address this deeply, deeply rooted economic crisis. Until we 
fix the housing crisis, and we get those real estate loans worked out 
on the books of institutions locally, and we stand up to Wall Street, 
we are not going to fix this problem, and the American people are going 
to continue to bleed, and that is morally wrong. That is simply morally 
wrong.
  I agree with the new President-elect who said he believes in a 
moratorium on foreclosures. That ought to happen until he puts people 
in place who can remedy this problem without $350 billion more dollars 
walking out the door before he even assumes office. As a former 
community organizer, he must know the pain that exists across this 
country.
  And just because Wall Street has more money and a lot of political 
power doesn't mean that it's right. We, as a Congress, must do what's 
right for the American people. We must say ``no'' to the second $350 
billion, and we must represent the people who depend on us to do what's 
right for them and right for the country.

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