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Congresswoman Kaptur Warns of Potential Conflicts of Interest in Bailout Plan

Press Release

Date: Oct. 9, 2008
Location: Washington, DC
Issues: Finance and Banking Government Budget and Spending Housing and Property Criminal Justice


Marcy Kaptur today warned of potential conflicts of interest that could compromise the integrity of the $850 billion bailout plan that was passed in Congress over her strenuous opposition.

Pointing to the appointment of Neel Kashkari as interim director of the bailout plan, Kaptur said she is concerned that a former Goldman Sachs executive has been given such authority considering the firm's track record.

"The American people deserve to know how much taxpayer money Kashkari's former employer, Goldman Sachs, will receive in the bailout and how many of Goldman's former staffers will be involved," she said. "The American people are watching the Bush Administration's every move, and this appointment raises questions about insider access and self dealing."

Kaptur said that Goldman Sachs, under then chief executive officer Hank Paulson, received an exemption from the Securities and Exchange Commission in 2004 to engage in "unregulated, risky and highly leveraged investments. They turn out badly, and now the taxpayers are on the hook to pay Paulson's former firm enormous fees and massive capital to make it right for them. I wonder if anyone at Goldman Sachs is taking any kind of a pay cut." Paulson is now the Treasury Secretary.

As part of here nine-point plan to address the economic emergency, Congresswoman Kaptur has called for creation of a special prosecutor in the U.S. Justice Department to investigate financial crimes, including fraud, misrepresentation of asset value, insider trading and any other criminal activity related to the current crisis. The special prosecutor should have a staff of at least 500, including the attorneys and accountants necessary to conduct investigations, undertake forensic accounting and prosecute suspected wrongdoers. Recovery of assets that were either fraudulently or illegally obtained by individuals, board members or institutions involved in criminal activity should be required retroactive to 1990.


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