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Posted by on Mar 22, 2009 in Economy, Politics | 0 comments

Your TARP Dollars At Work? Some Bailed Out Companies Quietly Make Campaign Contributions

It’s almost mind-boggling now to watch corporate America and some politicians of both parties act oblivious to the backlash over whether bailout money is being used appropriately by companies that get it. Newsweek has this item that you are sure to hear about in coming days:

In recent filings with the Federal Election Commission, the political action committee for Bank of America (which got $15 billion in bailout money) sent out $24,500 in the first two months of 2009, including $1,500 to House Majority Leader Steny Hoyer and another $15,000 to members of the House and Senate banking panels. Citigroup ($25 billion) dished out $29,620, including $2,500 to House GOPWhip Eric Cantor, who also got $10,000 from UBS which, while not a TARP recipient, got $5 billion in bailout funds as an AIG “counterparty.” “This certainly appears to be a case of TARP funds being recycled into campaign contributions,” says Brett Kappell, a D.C. lawyer who tracks donations. (A spokesman for Cantor did not respond to requests for comment. A spokeswoman for Hoyer said it’s his “policy to accept legal contributions.”)

Two things on that:

1. As someone who was in the news business both overseas and on two big newspaper chain papers (Knight Ridder and Gannett) it is typical that if a newsperson calls a news source for a comment on a story that will make them look good — they respond ASAP. But if it’s something they hope will go away, or they don’t have a slick answer (yet). They’ll respond.

2. Hoyer saying it’s his campaign’s policy to accept legal contributions is full of holes. If a major, known child molester, or a Nazi, or a mafia figure tried to contribute and it would show up on the records or came to light, Hoyer’s staff would likely move to return it. What can you conclude? He wants and needs the money. So if AIG gave him $1,000,000 it would be OK? Under this criteria, sure. This is illustrative of the kind of tin ear that could well sink the Democrats (a party which should be in the Guinness Book of Records for snatching defeat from the jaws of victory) and lose them seats in 2010. More from Newsweek’s Michael Isikoff and Dina Fine Maron:

The cash flow is already causing angst inside the Beltway. “The last thing I want to do is wake up one morning and see our PAC check being burned on C-Span,” said one bank lobbyist, who asked not to be identified because of the issue’s sensitivity. House Speaker Nancy Pelosi and House Financial Services chair Rep. Barney Frank both said recently they won’t take donations from TARP recipients. But House Democratic fundraisers have quietly passed the word that the party’s campaign committee will resume accepting them—but down the road, not right now. Said one fundraiser, who also requested anonymity, “These are treacherous waters.”

These are treacherous waters — and it seems as if both parties at times act as if they’re sailing on a smooth, lake. Or that voters are too dumb to see the waterspout that threatens to consume the country.

h/T The Huffington Post