Bailout Firms Owe $220 Million In Unpaid Taxes
From the Washington Post:
A House panel looking into a federal bailout program has found that 13 recipients of government funds owe more than $220 million in unpaid federal taxes, a lawmaker said today.
Rep. John Lewis (D-Ga.), chairman of the oversight subcommittee of the House Ways and Means Committee, told a hearing on the Troubled Asset Relief Program (TARP) that the panel looked at the top 23 private recipients of taxpayer-funded bailouts under the $700 billion program enacted last year.
“We found that 13 of them owed more than $220 million in unpaid federal taxes,” Lewis said in an opening statement. “Two companies owe over $100 million each. How can this be? If we looked at all 470 recipients, how much would they owe?”
Under the program, which was signed into law by President George W. Bush in October 2008, the U.S. Treasury has doled out more than $300 billion to banks and private companies so far. Shortly after enactment, Treasury Secretary Henry M. Paulson Jr. revised the program, which was originally intended to allow the government to buy up toxic assets from insolvent banks and auction the assets off to investors. Instead, Paulson and the Bush administration opted to pour capital into the banks and companies in hopes of cleaning up their balance sheets, thawing frozen credit markets and spurring renewed lending.
To get the money, the recipients were required to sign contracts stating that they had no material unpaid federal taxes, Lewis said. But he said Treasury did not ask the banks and companies to turn over their tax records, relying instead on their signed statements.
“Are they signing contracts knowing that they owe taxes but thinking they will not get caught?” Lewis demanded at the hearing. “Did then-secretary Paulson turn a blind eye? Either way, this is shameful. It is a disgrace.”
Lewis declared, “The American people are fed up, they are fired up, and they’re not going to take it anymore. As members of Congress, we shouldn’t take it anymore either.”