Washington, DC – Congresswoman Carol Shea-Porter today urged the House Financial Services Committee to close a loophole that allows top banking executives to continue to receive massive compensation packages after taking federal bailout money. Shea-Porter signed a letter to Chairman Barney Frank with 18 other Members of Congress.
“It is outrageous that banking executives are continuing to receive big bonuses even after taxpayers were forced to bailout Wall Street late last year,” said Shea-Porter. “It is critical that we close this loophole immediately and put a stop to excessive executive bonuses.”
A copy of the letter is below:
Dear Chairman Frank:
As you know, due to a loophole inserted into the Emergency Economic Stabilization Act (EESA) at the last minute by the Bush administration and a surprise change of course in the execution of the bill, companies currently participating in the Troubled Asset Relief Program (TARP) are not subject to any of the executive compensation limits that Members of Congress insisted upon before passage of the EESA.
On December 19, 2008, 23 Members of Congress sent letters to the CEOs of eight major banks calling for their top executives to not take advantage of the loophole and abide by the compensation limits intended by Congress. Following the letter, Citigroup joined Goldman Sachs in voluntarily forgoing bonuses for top executives.
As the House Financial Services Committee considers legislation to modify and improve the administration of the TARP prior to the release of the third tranche of funding, I urge you to recognize the original intent of Congress and decisively close this loophole.
It is unacceptable for banking executives to be allowed to pad their pockets with massive bonuses and benefits after mismanaging their companies and coming to the American taxpayer for aid. Thank you for your service. I look forward to working with you to bring health to the financial services industry and protect the taxpayer during the 111th Congress.