Thank You
-
Dear Friend,
Thank you for participating in the Relay For Life of Smithtown! I am happy
to tell you that this year’s Relay raised over $30,000 and it wou...
16 years ago
Monday, May 11, 2009
Thursday, April 30, 2009
Breaking: Supreme Court Justice Souter to Retire
Supreme Court Justice David Souter was appointed to the nation's highest court in 1988 by the first President Bush. He's set to retire in June. More on the newly redesigned TheMatadorOnline.com:
Tuesday, April 28, 2009
Developing Story: Arlen Specter Crosses the Aisle
Developing Story: CNN is reporting that Pennsylvania Senator Arlen Specter will be changing from the Republican to Democratic party.
Monday, April 27, 2009
First 100 days reveal similarities between Obama, Reagan
From TheMatadorOnline.com newsroom:
By Dick Polman
The Philadelphia Inquirer
(MCT)
On the cusp of his first 100 days in office, the new president is fully embarked on his transformative mission, dominating the news cycle by sheer force of his telegenic cool, exuding confidence, and prompting downhearted Americans to feel better about their troubled country. The New York Times praises his "remarkable political strengths and gifts," particularly his "gift for political ...
Read more:
http://www.thematadoronline.com/viewpoints/2009/04/27/first-100-days-reveal-similarities-between-obama-reagan/
By Dick Polman
The Philadelphia Inquirer
(MCT)
On the cusp of his first 100 days in office, the new president is fully embarked on his transformative mission, dominating the news cycle by sheer force of his telegenic cool, exuding confidence, and prompting downhearted Americans to feel better about their troubled country. The New York Times praises his "remarkable political strengths and gifts," particularly his "gift for political ...
Read more:
http://www.thematadoronline.com/viewpoints/2009/04/27/first-100-days-reveal-similarities-between-obama-reagan/
Calls to evaluate interrogation techniques ignored
From TheMatadorOnline.com newsroom:
By Greg Miller
Tribune Washington Bureau
(MCT)
WASHINGTON — The CIA used an arsenal of severe interrogation techniques on al-Qaida prisoners for nearly seven years without ever seeking a rigorous assessment of whether the methods were effective or necessary, according to current and former U.S. officials familiar with the matter.
The failure to conduct a comprehensive examination occurred despite calls to do so as early as 2003. That year, the agency's inspector general circulated drafts of a report that raised deep concerns about waterboarding and other methods, and recommended a study by outside experts on whether they worked.
That inspector general report described in broad terms the volume of intelligence that the interrogation program was producing, a point echoed in smaller studies later commissioned by then-CIA Director Porter J. Goss.
But neither the inspector general's report nor the other audits examined the effectiveness of interrogation techniques in detail, or sought to scrutinize the assertions of CIA counterterrorism officials that so-called enhanced methods were essential to the program's results. One report by a former government official — not an interrogation expert — was about 10 pages long and amounted to a glowing review of interrogation efforts.
"Nobody with expertise or experience in interrogation ever took a rigorous, systematic review of the various techniques — enhanced or otherwise — to see what resulted in the best information," said a senior U.S. intelligence official involved in overseeing the interrogation program.
As a result, there was never a determination of "what you could do without the use of enhanced techniques," said the official, who like others, described internal discussions on condition of anonymity.
Former Bush administration officials said the failure to conduct such an examination was part of a broader reluctance to re-examine decisions made early after Sept. 11.
The Defense Department, Justice Department and CIA "all insisted on sticking with their original policies and were not open to revisiting them, even as the damage of these policies became apparent," said John B. Bellinger III, who was legal adviser to former Secretary of State Condoleezza Rice, referring to burgeoning international outrage.
"We had gridlock," Bellinger said, calling the failure to consider other approaches "the greatest tragedy of the Bush administration's handling of detainee matters."
The limited resources spent examining whether the interrogation measures worked were in stark contrast to the energy the CIA devoted to collecting memos declaring the program legal.
Justice Department memos released this month show that the CIA repeatedly sought new opinions on the legality of depriving prisoners of sleep for as long as seven days, throwing them against walls, forcing them into tiny boxes and subjecting them to the simulated drowning technique known as waterboarding.
How well those methods worked is facing independent scrutiny for the first time only now, three months after President Barack Obama banned the CIA from using them.
As part of an executive order shutting down the CIA's secret prisons, the White House has set up a task force to examine the effectiveness of various interrogation approaches.
The Senate Intelligence Committee launched a similar review, and began combing through classified CIA cables that describe daily developments in the agency's interrogations of al-Qaida prisoners.
"To the best of our knowledge, such a review has not been done before," said a Senate aide involved in the probe.
CIA spokesman Paul Gimigliano declined to comment on the reviews, saying their contents remain classified.
A U.S. intelligence official who defended CIA interrogation practices said, "Productivity was an obvious and important measure of the program's effectiveness. The techniques themselves were not designed to elicit specific pieces of information, but to condition hardened terrorists to answer questions about al-Qaida's plans and intentions.
"By that yardstick — the generation of reporting that was true and useful, that led even to other captures — it worked."
Obama has described the agency's activities as "a dark and painful chapter in our history," and senior members of his administration, including Attorney General Eric H. Holder Jr., have called the techniques torture.
Defenders of the program, including former Vice President Dick Cheney, have accused Obama of dismantling a capability that was critical to keeping the country safe. Cheney also has called for the release of classified documents that he said will show how effective the program was.
Officials said that Cheney probably was referring to memos that were drafted by leaders of the CIA Counterterrorism Center to serve as talking points when the program was the subject of briefings to members of Congress and White House officials.
Many of those talking points have been cited publicly in recent years by senior government officials, starting with President George W. Bush when he disclosed the CIA's secret prison system in September 2006.
At the time, Bush said that "alternative" interrogation methods had been critical to getting al-Qaida operatives, including Abu Zubaydah and alleged Sept. 11 mastermind Khalid Sheikh Mohammed, to talk.
"I cannot describe the specific methods used," Bush said. "But I can say the procedures were tough, and they were safe, and lawful and necessary."
By then, Bush administration officials were concerned with a shifting legal landscape. Congress had passed new laws on the treatment of detainees, and the Supreme Court issued a ruling that undercut the Bush administration's claim that al-Qaida prisoners were not entitled to the protections of the Geneva Conventions.
But officials said that the first high-level concern about the direction of the CIA's interrogation program had come in 2003, when then-CIA Inspector General John L. Helgerson began distributing draft copies of his report on the program across the executive branch.
The document triggered alarms about waterboarding, documenting that it had been employed far more frequently — including 263 times against two al-Qaida prisoners — than widely understood.
(EDITORS: BEGIN OPTIONAL TRIM)
The report also faulted how agency operatives applied the method, dumping large quantities of water on prisoners' faces, apparently violating the agency manual and its agreements with the Justice Department. Nervous about the report's implications, then-CIA Director George J. Tenet suspended the use of waterboarding in 2003.
The document also was critical of other approaches, including sleep deprivation. For all its criticism of the program, the 200-plus page document also included passages that have been cited by some as evidence that the interrogation operation was effective.
A May 2005 Justice Department memo noted that the inspector general's report described an "increase in intelligence reports attributable to the use of enhanced techniques."
A U.S. intelligence official familiar with its contents confirmed that the inspector general's report contains language that is consistent with the assertions by former CIA Director Michael V. Hayden and others that the interrogation program accounted for more than half of the intelligence community's reports on al-Qaida.
But officials said the document did not assess the quality of those reports. It also did not attempt to determine which methods were yielding the best information, or explore whether the agency's understanding of al-Qaida would have suffered significantly without the use of coercive techniques.
"Certainly you got additional considerable volume of reporting when you started up with anything enhanced," the U.S. intelligence official said. "But nobody went back to say exactly what were the conditions under which we learned that which was the most useful."
In fact, Helgerson's team had steered away from that question by design, the official said, hoping that agency leaders would turn to interrogation experts for a thorough study on which methods were working and which should be discarded.
(END OPTIONAL TRIM)
White House National Security Council officials who saw the inspector general's report became concerned with its conclusions, current and former officials said. Stephen Hadley, then the deputy national security adviser, was particularly persistent on pushing the CIA director to follow up on the inspector general's recommendation.
Porter J. Goss, who had taken the helm at the CIA four months after the inspector general's report was filed, eventually complied. But while Helgerson had envisioned a group of experts, perhaps including specialists from the FBI, Goss turned to two former government officials with little background in interrogation.
Gardner Peckham, who was a national security adviser to former GOP House Speaker Newt Gingrich, produced the approximately 10-page document that praised the program. It concluded that the program was "very structured and very disciplined," said a former official familiar with its contents, but did not assess the effectiveness of various methods.
A separate report, submitted by John J. Hamre, a former deputy Defense secretary, was similar in scope and led to no significant alterations of the program. Hamre and Peckham both declined comment.
Despite the high-level attention, former Bush administration officials said they never saw the results of the audits that Goss had commissioned.
"They never came and presented anything to the White House that said in response to the I.G. report they have commissioned a review," said a former Bush administration official. "They essentially came back with the recommendations that this was the program and it couldn't be changed."
———
(Julian E. Barnes of the Tribune Washington Bureau and Doyle McManus of the Los Angeles Times contributed to this report.)
———
(c) 2009, Tribune Co.
Distributed by McClatchy-Tribune Information Services.
By Greg Miller
Tribune Washington Bureau
(MCT)
WASHINGTON — The CIA used an arsenal of severe interrogation techniques on al-Qaida prisoners for nearly seven years without ever seeking a rigorous assessment of whether the methods were effective or necessary, according to current and former U.S. officials familiar with the matter.
The failure to conduct a comprehensive examination occurred despite calls to do so as early as 2003. That year, the agency's inspector general circulated drafts of a report that raised deep concerns about waterboarding and other methods, and recommended a study by outside experts on whether they worked.
That inspector general report described in broad terms the volume of intelligence that the interrogation program was producing, a point echoed in smaller studies later commissioned by then-CIA Director Porter J. Goss.
But neither the inspector general's report nor the other audits examined the effectiveness of interrogation techniques in detail, or sought to scrutinize the assertions of CIA counterterrorism officials that so-called enhanced methods were essential to the program's results. One report by a former government official — not an interrogation expert — was about 10 pages long and amounted to a glowing review of interrogation efforts.
"Nobody with expertise or experience in interrogation ever took a rigorous, systematic review of the various techniques — enhanced or otherwise — to see what resulted in the best information," said a senior U.S. intelligence official involved in overseeing the interrogation program.
As a result, there was never a determination of "what you could do without the use of enhanced techniques," said the official, who like others, described internal discussions on condition of anonymity.
Former Bush administration officials said the failure to conduct such an examination was part of a broader reluctance to re-examine decisions made early after Sept. 11.
The Defense Department, Justice Department and CIA "all insisted on sticking with their original policies and were not open to revisiting them, even as the damage of these policies became apparent," said John B. Bellinger III, who was legal adviser to former Secretary of State Condoleezza Rice, referring to burgeoning international outrage.
"We had gridlock," Bellinger said, calling the failure to consider other approaches "the greatest tragedy of the Bush administration's handling of detainee matters."
The limited resources spent examining whether the interrogation measures worked were in stark contrast to the energy the CIA devoted to collecting memos declaring the program legal.
Justice Department memos released this month show that the CIA repeatedly sought new opinions on the legality of depriving prisoners of sleep for as long as seven days, throwing them against walls, forcing them into tiny boxes and subjecting them to the simulated drowning technique known as waterboarding.
How well those methods worked is facing independent scrutiny for the first time only now, three months after President Barack Obama banned the CIA from using them.
As part of an executive order shutting down the CIA's secret prisons, the White House has set up a task force to examine the effectiveness of various interrogation approaches.
The Senate Intelligence Committee launched a similar review, and began combing through classified CIA cables that describe daily developments in the agency's interrogations of al-Qaida prisoners.
"To the best of our knowledge, such a review has not been done before," said a Senate aide involved in the probe.
CIA spokesman Paul Gimigliano declined to comment on the reviews, saying their contents remain classified.
A U.S. intelligence official who defended CIA interrogation practices said, "Productivity was an obvious and important measure of the program's effectiveness. The techniques themselves were not designed to elicit specific pieces of information, but to condition hardened terrorists to answer questions about al-Qaida's plans and intentions.
"By that yardstick — the generation of reporting that was true and useful, that led even to other captures — it worked."
Obama has described the agency's activities as "a dark and painful chapter in our history," and senior members of his administration, including Attorney General Eric H. Holder Jr., have called the techniques torture.
Defenders of the program, including former Vice President Dick Cheney, have accused Obama of dismantling a capability that was critical to keeping the country safe. Cheney also has called for the release of classified documents that he said will show how effective the program was.
Officials said that Cheney probably was referring to memos that were drafted by leaders of the CIA Counterterrorism Center to serve as talking points when the program was the subject of briefings to members of Congress and White House officials.
Many of those talking points have been cited publicly in recent years by senior government officials, starting with President George W. Bush when he disclosed the CIA's secret prison system in September 2006.
At the time, Bush said that "alternative" interrogation methods had been critical to getting al-Qaida operatives, including Abu Zubaydah and alleged Sept. 11 mastermind Khalid Sheikh Mohammed, to talk.
"I cannot describe the specific methods used," Bush said. "But I can say the procedures were tough, and they were safe, and lawful and necessary."
By then, Bush administration officials were concerned with a shifting legal landscape. Congress had passed new laws on the treatment of detainees, and the Supreme Court issued a ruling that undercut the Bush administration's claim that al-Qaida prisoners were not entitled to the protections of the Geneva Conventions.
But officials said that the first high-level concern about the direction of the CIA's interrogation program had come in 2003, when then-CIA Inspector General John L. Helgerson began distributing draft copies of his report on the program across the executive branch.
The document triggered alarms about waterboarding, documenting that it had been employed far more frequently — including 263 times against two al-Qaida prisoners — than widely understood.
(EDITORS: BEGIN OPTIONAL TRIM)
The report also faulted how agency operatives applied the method, dumping large quantities of water on prisoners' faces, apparently violating the agency manual and its agreements with the Justice Department. Nervous about the report's implications, then-CIA Director George J. Tenet suspended the use of waterboarding in 2003.
The document also was critical of other approaches, including sleep deprivation. For all its criticism of the program, the 200-plus page document also included passages that have been cited by some as evidence that the interrogation operation was effective.
A May 2005 Justice Department memo noted that the inspector general's report described an "increase in intelligence reports attributable to the use of enhanced techniques."
A U.S. intelligence official familiar with its contents confirmed that the inspector general's report contains language that is consistent with the assertions by former CIA Director Michael V. Hayden and others that the interrogation program accounted for more than half of the intelligence community's reports on al-Qaida.
But officials said the document did not assess the quality of those reports. It also did not attempt to determine which methods were yielding the best information, or explore whether the agency's understanding of al-Qaida would have suffered significantly without the use of coercive techniques.
"Certainly you got additional considerable volume of reporting when you started up with anything enhanced," the U.S. intelligence official said. "But nobody went back to say exactly what were the conditions under which we learned that which was the most useful."
In fact, Helgerson's team had steered away from that question by design, the official said, hoping that agency leaders would turn to interrogation experts for a thorough study on which methods were working and which should be discarded.
(END OPTIONAL TRIM)
White House National Security Council officials who saw the inspector general's report became concerned with its conclusions, current and former officials said. Stephen Hadley, then the deputy national security adviser, was particularly persistent on pushing the CIA director to follow up on the inspector general's recommendation.
Porter J. Goss, who had taken the helm at the CIA four months after the inspector general's report was filed, eventually complied. But while Helgerson had envisioned a group of experts, perhaps including specialists from the FBI, Goss turned to two former government officials with little background in interrogation.
Gardner Peckham, who was a national security adviser to former GOP House Speaker Newt Gingrich, produced the approximately 10-page document that praised the program. It concluded that the program was "very structured and very disciplined," said a former official familiar with its contents, but did not assess the effectiveness of various methods.
A separate report, submitted by John J. Hamre, a former deputy Defense secretary, was similar in scope and led to no significant alterations of the program. Hamre and Peckham both declined comment.
Despite the high-level attention, former Bush administration officials said they never saw the results of the audits that Goss had commissioned.
"They never came and presented anything to the White House that said in response to the I.G. report they have commissioned a review," said a former Bush administration official. "They essentially came back with the recommendations that this was the program and it couldn't be changed."
———
(Julian E. Barnes of the Tribune Washington Bureau and Doyle McManus of the Los Angeles Times contributed to this report.)
———
(c) 2009, Tribune Co.
Distributed by McClatchy-Tribune Information Services.
Wednesday, April 22, 2009
Breaking: Freddie Mac Exec. Allegedly Commits Suicide
CNN: Acting chief financial officer of mortgage financier Freddie Mac has been found dead in suspected suicide, police say.
Check back for updates on this developing story...
Check back for updates on this developing story...
Geithner says bailout funds remain for economic initiatives
From TheMatadorOnline.com Newsroom:
By Jim Puzzanghera
Tribune Washington Bureau
(MCT)
WASHINGTON — The Obama administration has enough money left for its economic initiatives with $110 billion remaining in the federal financial rescue fund and $25 billion more coming this year as some banks return bailout money, Treasury Secretary Timothy F. Geithner said Tuesday.
Geithner disclosed the new numbers as he defended the administration's bailout efforts in the face of tough questioning from a special panel overseeing the $700 billion Troubled Asset Relief Program, or TARP. In his first appearance before the panel, Geithner said federal funding has helped stimulate consumer and business lending, but more work was needed to revive an economy mired in recession.
"The lessons of financial crises (are) that early action, forceful action, sustained action to repair financial systems, promote the flow of credit, is essential to limit the damage recessions cause and to make it possible to bring recovery about at least cost to the taxpayer over time," he said.
In his written testimony, Geithner said the vast majority of banks "have more capital than they need to be considered well-capitalized by their regulators," a comment that helped boost the stock market a day after it had been shaken by huge loan losses reported Monday by Bank of America Corp.
The Dow Jones industrials jumped 1.6 percent, and the Standard & Poor's 500 index surged 2.3 percent, as each gauge erased almost half the decline it recorded Monday.
The TARP money has been used primarily to bolster the financial industry — both giants such as Bank of America and Citigroup Inc. and smaller banks — but also to try to steady the teetering U.S. auto industry, specifically Chrysler and General Motors Corp.
Geithner tried to blunt criticism of the bailouts by saying the government was doing its best to balance the protection of taxpayer money with prevention of a collapse of the financial system.
"My basic obligation and our responsibility is to make sure that the system as a whole has the ability to provide the credit that recovery requires. And so we need to make a careful judgment about what policies are going to best promote that objective," Geithner told the congressional oversight panel, which was created last fall to monitor use of the $700 billion fund.
In a separate letter to panel Chairwoman Elizabeth Warren, a Harvard University law professor, Geithner said the fund had at least $109.6 billion remaining after a series of unprecedented investments in U.S. banks and other financial institutions through TARP.
With repayments, the administration expects to have $134.6 billion to use for additional rescue efforts the rest of the year.
Noting that the administration plans to provide additional money to banks, as well as to GM and Chrysler, "we believe that even under the conservative estimate of available funds described here, we have the resources to move forward implementing all aspects of our financial stability plan," Geithner wrote.
(EDITORS: STORY CAN END HERE)
The administration has not said how much more money it would provide to GM as it aims to restructure by June 1 and to Chrysler as it seeks a government-brokered merger with Italian automaker Fiat by May 1. But a report Tuesday from the office of the TARP special inspector general said GM would receive up to $5 billion and Chrysler up to $500 million in working capital.
In February, the White House said it might need an additional $750 billion in bailout money should economic conditions worsen. But administration officials have since stressed that they have no plans to ask Congress for more money.
Such a request would be a hard sell because many lawmakers from both parties have been upset about the way the program has been run, particularly with the large amounts of money injected into banks with no requirements that they lend it.
Critics received more ammunition Tuesday from the inspector general's 250-page report, which said it had opened 20 criminal investigations into fraud and other misuse of the money.
So-called stress tests to assess the financial condition of the nation's 19 largest banks might require the government to provide more money to some large banks if they can't raise additional capital themselves.
Those funds could be offset by repayments by some financial institutions, such as Goldman Sachs, that want to get out of restrictions on executive compensation and other government conditions that come with the federal money.
During his congressional appearance, Geithner was questioned sharply about recent comments indicating that even if some of the largest recipients of bailout money wanted to return the money and had the funds to do so, government officials might not allow them.
"If there are firms that wish to repay taxpayers their money ... why wouldn't you take the money back?" asked Rep. Jeb Hensarling, R-Texas, one of two lawmakers on the panel.
Geithner said that "nothing would make me happier," but that administration officials and banking regulators would need to weigh the potential effect on the economy.
"One is, do the institutions themselves have enough capital to be able to lend?" he said. And is the overall financial system working well enough to start pulling back the extra cushion that the bailout money provides, he said.
Warren said the panel was trying to address criticism of the bailouts from the public.
"People are angry because they're paying for programs that haven't been fully explained and have no apparent benefit for their families or for the economy as a whole but that seem to leave enough cash in the system for lavish bonuses or golf outings," she told Geithner. "None of this seems fair." Another panel member, Damon Silvers, associate counsel for the AFL-CIO, questioned the taxpayer risk in the proposed public/private partnership to purchase bad mortgage loans and other toxic assets from financial institutions.
There seemed to be a "profound and inexplicable imbalance" between the risk that taxpayers were making in funding the purchases and the upside they could get from sale of the assets at a later date compared with the lower risk and greater upside for private investors, he said.
"Now, I just don't get it, Mr. Secretary, how this represents protecting the taxpayer, and I would like you to explain why it does," Silvers said.
Geithner said the alternative would be for the government to take on all of the risk and to determine, in the absence of private investors, the fair market value for the assets.
"Now, they would get in return all the potential upside in this case," Geithner said of taxpayers, "but that trade-off is a bad trade-off for the government, because the government is highly unlikely to be in a position to be able to get the valuation right."
———
(c) 2009, Tribune Co.
Distributed by McClatchy-Tribune Information Services.
—————
ARCHIVE PHOTO on MCT Direct (from MCT Photo Service, 202-383-6099): "timothy geithner"
By Jim Puzzanghera
Tribune Washington Bureau
(MCT)
WASHINGTON — The Obama administration has enough money left for its economic initiatives with $110 billion remaining in the federal financial rescue fund and $25 billion more coming this year as some banks return bailout money, Treasury Secretary Timothy F. Geithner said Tuesday.
Geithner disclosed the new numbers as he defended the administration's bailout efforts in the face of tough questioning from a special panel overseeing the $700 billion Troubled Asset Relief Program, or TARP. In his first appearance before the panel, Geithner said federal funding has helped stimulate consumer and business lending, but more work was needed to revive an economy mired in recession.
"The lessons of financial crises (are) that early action, forceful action, sustained action to repair financial systems, promote the flow of credit, is essential to limit the damage recessions cause and to make it possible to bring recovery about at least cost to the taxpayer over time," he said.
In his written testimony, Geithner said the vast majority of banks "have more capital than they need to be considered well-capitalized by their regulators," a comment that helped boost the stock market a day after it had been shaken by huge loan losses reported Monday by Bank of America Corp.
The Dow Jones industrials jumped 1.6 percent, and the Standard & Poor's 500 index surged 2.3 percent, as each gauge erased almost half the decline it recorded Monday.
The TARP money has been used primarily to bolster the financial industry — both giants such as Bank of America and Citigroup Inc. and smaller banks — but also to try to steady the teetering U.S. auto industry, specifically Chrysler and General Motors Corp.
Geithner tried to blunt criticism of the bailouts by saying the government was doing its best to balance the protection of taxpayer money with prevention of a collapse of the financial system.
"My basic obligation and our responsibility is to make sure that the system as a whole has the ability to provide the credit that recovery requires. And so we need to make a careful judgment about what policies are going to best promote that objective," Geithner told the congressional oversight panel, which was created last fall to monitor use of the $700 billion fund.
In a separate letter to panel Chairwoman Elizabeth Warren, a Harvard University law professor, Geithner said the fund had at least $109.6 billion remaining after a series of unprecedented investments in U.S. banks and other financial institutions through TARP.
With repayments, the administration expects to have $134.6 billion to use for additional rescue efforts the rest of the year.
Noting that the administration plans to provide additional money to banks, as well as to GM and Chrysler, "we believe that even under the conservative estimate of available funds described here, we have the resources to move forward implementing all aspects of our financial stability plan," Geithner wrote.
(EDITORS: STORY CAN END HERE)
The administration has not said how much more money it would provide to GM as it aims to restructure by June 1 and to Chrysler as it seeks a government-brokered merger with Italian automaker Fiat by May 1. But a report Tuesday from the office of the TARP special inspector general said GM would receive up to $5 billion and Chrysler up to $500 million in working capital.
In February, the White House said it might need an additional $750 billion in bailout money should economic conditions worsen. But administration officials have since stressed that they have no plans to ask Congress for more money.
Such a request would be a hard sell because many lawmakers from both parties have been upset about the way the program has been run, particularly with the large amounts of money injected into banks with no requirements that they lend it.
Critics received more ammunition Tuesday from the inspector general's 250-page report, which said it had opened 20 criminal investigations into fraud and other misuse of the money.
So-called stress tests to assess the financial condition of the nation's 19 largest banks might require the government to provide more money to some large banks if they can't raise additional capital themselves.
Those funds could be offset by repayments by some financial institutions, such as Goldman Sachs, that want to get out of restrictions on executive compensation and other government conditions that come with the federal money.
During his congressional appearance, Geithner was questioned sharply about recent comments indicating that even if some of the largest recipients of bailout money wanted to return the money and had the funds to do so, government officials might not allow them.
"If there are firms that wish to repay taxpayers their money ... why wouldn't you take the money back?" asked Rep. Jeb Hensarling, R-Texas, one of two lawmakers on the panel.
Geithner said that "nothing would make me happier," but that administration officials and banking regulators would need to weigh the potential effect on the economy.
"One is, do the institutions themselves have enough capital to be able to lend?" he said. And is the overall financial system working well enough to start pulling back the extra cushion that the bailout money provides, he said.
Warren said the panel was trying to address criticism of the bailouts from the public.
"People are angry because they're paying for programs that haven't been fully explained and have no apparent benefit for their families or for the economy as a whole but that seem to leave enough cash in the system for lavish bonuses or golf outings," she told Geithner. "None of this seems fair." Another panel member, Damon Silvers, associate counsel for the AFL-CIO, questioned the taxpayer risk in the proposed public/private partnership to purchase bad mortgage loans and other toxic assets from financial institutions.
There seemed to be a "profound and inexplicable imbalance" between the risk that taxpayers were making in funding the purchases and the upside they could get from sale of the assets at a later date compared with the lower risk and greater upside for private investors, he said.
"Now, I just don't get it, Mr. Secretary, how this represents protecting the taxpayer, and I would like you to explain why it does," Silvers said.
Geithner said the alternative would be for the government to take on all of the risk and to determine, in the absence of private investors, the fair market value for the assets.
"Now, they would get in return all the potential upside in this case," Geithner said of taxpayers, "but that trade-off is a bad trade-off for the government, because the government is highly unlikely to be in a position to be able to get the valuation right."
———
(c) 2009, Tribune Co.
Distributed by McClatchy-Tribune Information Services.
—————
ARCHIVE PHOTO on MCT Direct (from MCT Photo Service, 202-383-6099): "timothy geithner"
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