May 14, 2009, - 11:11 am

Obama-Style Blackmail: Bush’s Paulson Told Banks “Accept Bailout $s . . . Or We’ll Force You To”

By Debbie Schlussel
Throughout all of our collective outrage over the last year about America’s banks taking gazillions in bailouts and then spending it foolishly, there was one “tiny” little detail left out.
Kudos to Judicial Watch for obtaining this info, which shows us that our government often operates more according the fantasies of Karl Marx than the behavior of a free, market-driven society.
Remember, this is the work not of Barack Obama–though we know he’s not above this behavior either (see the Chrysler bankruptcy deal and his threats to hedge funds and other investors)–but the work of Bush’s Paulson and a certain guy who is now Treasury Secretary.

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They Blackmailed & Extorted the Banks

Former Treasury Secretary Henry Paulson, saying nine U.S. banks were “central to any solution” of the credit crisis, told their leaders to take government aid or be forced to by regulators, according to a memo prepared for an October meeting.
If a capital infusion is not appealing, you should be aware that your regulator will require it in any circumstance,” Paulson’s one-page list of talking points for the session with the banks’ chief executives said. “We don’t believe it is tenable to opt out because doing so would leave you vulnerable and exposed.”
Investing $125 billion in the banks was a shift for the Bush administration, which had proposed buying troubled assets with $700 billion Congress approved 10 days earlier. The memo was among Treasury Department documents containing details about the Oct. 13 meeting.
“Most Americans are going to be uncomfortable with the government forcing the banks into this arrangement,” said Tom Fitton, president of Judicial Watch, a nonprofit research group in Washington that obtained the documents under a Freedom of Information Act request. . . .
Three and a half hours after the meeting was scheduled to begin, Paulson had obtained the bankers’ signatures on half-page forms along with the handwritten amount of the federal government’s investment, according to the documents. He announced the actions publicly the next day.

Correction. He announced some of the actions publicly the next day. We weren’t informed of the blackmail and extortion tactics he used.

In releasing the documents yesterday, Judicial Watch said Treasury initially said it had no records about the meeting. It didn’t release a transcript of discussions between government officials and bankers.
The CEOs who attended included Kenneth Lewis of Bank of America Corp., Vikram Pandit of Citigroup Inc., Lloyd Blankfein of Goldman Sachs Group Inc., Jamie Dimon of JPMorgan Chase & Co., John Thain of Merrill Lynch & Co., now part of Bank of America;Robert Kelly of Bank of New York Mellon Corp., Ronald Logue of State Street Corp., John Mack of Morgan Stanley and Richard Kovacevich of Wells Fargo & Co.
Accompanying Paulson were Federal Reserve Chairman Ben Bernanke, Federal Deposit Insurance Corp. Chairman Sheila Bair and New York Federal Reserve Bank President Timothy Geithner, who succeeded Paulson as Treasury secretary.
The Monday meeting came after Paulson huddled with Geithner, Bair and Treasury aides Sunday afternoon and then placed calls that evening to each CEO except Blankfein, according to the secretary’s daily log.

Yup, now we can add blackmail and extortion and accessory to and conspiracy to commit those to Timothy Geithner’s rap sheet. Whatta guy!
This is the narrative of dictators and tyrants, not the United States of America. But, sadly, this is the USA of today.
If they can strong arm wealthy CEOs of giant banks like this, they can certainly do it to you and me.

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5 Responses

This is quite scary. What’s even scarier is that there isn’t any outrage over this. In the past Americans never got a dictatorial government because they didn’t deserve one. Now it seems due to wide-spread apathy, left-wing brainwashing and liberal immaturity, we do.

Tempus Fugit on May 14, 2009 at 1:10 pm

It’s hard to defend capitalism when the most powerful business leaders are too cowardly to do so.

Tempus Fugit on May 14, 2009 at 1:14 pm

We have a bunch of self serving cowards in leadership positions in both government, the military and businesses. These CEOs did not stand up to the intimidation from the government. They are more concerned about their fat salary and bonuses than principle. They stand for nothing. If push comes to shove, do you see them standing up for the companies that they are supposed to be running? No! Look at the US auto makers? Did they do what was right for their companies over these failing years? No! They capitulated to the unions. That seems to be their operating stance: capitulate under pressure.

norman on May 14, 2009 at 1:44 pm

What is also bad is that the bank has to get permission from the feds to pay the money back. The banks are being forced to jump thru hoops and still get denied.

ender on May 14, 2009 at 8:43 pm

Ron Paul warned the American people that the Federal reserve was running this country and he was ostracized for being a crazy nut by the Rockefeller Republicans.
Every single Government official in this grand theft and mafia takeover are former Federal Reserve officials and members of the Council on Foreign Relations.
It is no longer a Conspiracy Theory we are seeing it happen live on TV and in the news.

ScottyDog on May 15, 2009 at 2:15 pm

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