Tuesday, March 24, 2009

Profs: Kanjo Subject To Scrutiny Over Financial Mess

Forgive me for not posting yesterday. The media portrayal of Paul Kanjorski has me on a mission. They are out to make him look like a savior with respect to the financial mess when he was actually an accomplice in creating this fiasco.

Andrew Seder of the Times Leader writes a story line yesterday about Paul Kanjorski's vulnerablity to questioning of his role in the financial storm that has wreaked havoc over the entire country.

U.S. Rep. Paul E. Kanjorski recently warned the heads of several large banks that took government bailout funds they’ve put themselves in a situation that opens them up to tough questions and criticism.

“You once lived behind a one-way mirror, unaccountable to the public at large,” said Kanjorski, D-Nanticoke, during the Feb. 11 committee hearing. “When you took taxpayer money you moved into a fishbowl.”

Two local professors said Kanjorski needs to heed his own warning.

Kanjo has been just as much a part of this disaster but it appears he hopes the public has a short memory. Rewind the Kanjorski Youtube videos and printed testimony.

Here is one from March, 2008 where he tries to pin the mess on Bush but actually acknowledges that the problems occured in 2006 while he was chairman of the Subcomittee responsible for oversight.- Comment at 1:24 into video. He grandstands for the media asking why the Federal Reserve and the Treasury ask questions. Paul, why didn't you act, forget the questions? He fails to acknowledge that the Financial Services Modernization Act of 1999 was responsible for the financial mess today. In his typical partisan fashion he tries to lay it at George Bush's doorstep. What a crock.

At 1.:26 he states "We are trying to save the American economy. Had Congress did its job in the first place we wouldn't be in this mess. Asking Paul Kanjorski to fix this mess is like asking the shooter to perform surgery on the patient. How well was the economy saved?

In this video he talks about the bailout legislation. He states to Paulson it "Does primarily what you want it to do but with the protections the public was asking for." Paul, what protections were they asking for, bonus retention perhaps? That' exactly what Christopher Dodd did but I am sure that this bill was rushed through so fast no one really knew about the provision.

In this video he admits knowing about the AIG bonuses over two months ago. Yet in his own press release the following information is provided.

I am therefore extremely disappointed that AIG will move forward with its plans to pay out 2008 bonuses totaling $165 million, on top of the $55 million paid out late last year, for employees at the very business that caused the company to collapse."

Chairman Kanjorski added, "While these bonuses were agreed to in early 2008 before AIG received any taxpayer money, considering the sweeping changes that have occurred since then, further concessions in AIG's contracts must be seriously considered, especially at the Financial Products unit. Although we must effectively and expeditiously wind down the systemic risks caused by AIG Financial Products, we cannot allow individuals who acted irresponsibly to reap undue benefits."

According to the statement he called, he wrote, but what did he actually do to prevent or stop the bonuses? Only after the bonuses were paid did Congress come up with the idea to tax them.

Congress creates messes then tells the American public they are the solution. They hurredly passed the Emergency Economic Stablization Act of 2008 but that didn't stop the economy from taking a nose dive.

Here is a quote from his opening statement on the third Regulatory Oversight Hearing of government sponsored enterprises. "Specifically, if we ultimately decide to alter the safety and soundness regulation of Fannie Mae and Freddie Mac and to move the regulator to the Treasury Department." Paul, the safety and soundness, are you kidding me??? The only thing safe and sound was the money you accepted from Fannie and Freddie. You were like a child getting money from his parents.

Here is the video that shows the real Paul Kanjorski. He is talking about a strong independent regulator being formed to oversee Fannie Mae and Freddie Mac. The transcript of his words can be found here specifically start on page 157.

Mr. KANJORSKI. Thank you, Mr. Chairman.
Listening to that discussion, I tend to agree that this is a very delicate area on how we handle mission and how we deal with what really independent strong role plus regulation will be and to tailor those two situations to these particular entities, not counting the fact that we have some earlier testimony about throwing in the Federal home loan bank system, which creates an entirely different problem we would have to address.

First of all, is anyone on the panel aware of a crisis situation where we have to do this in the next two or three weeks?

Do you really believe that some of the issues that have been raised here in the discussion with this panel, that this can all be accomplished with deliberative speed in a short period of time, like two or three weeks?

Mr. BARTLETT. Mr. Kanjorski, our organization and our companies have been quite concerned about this from a safety and soundness as well as a mission for the last several years. We have communicated that concern. But recently, that concern seems to have been highlighted by a number of factors.

So, yes, sir, I believe there is an urgency that is to the tune of some $3.3 trillion that is either owned or guaranteed by these two agencies that all the testimony that you have heard today bring in some question as to whether they are being properly regulated. So we think they are not being properly regulated. And we believe that with $3.3 trillion, you do not want to wait too long. And now is the time to act.

Mr. KANJORSKI. I would not suggest that everyone has questioned whether or not we can construct a better regulatory authority than what we presently have. I do not know whether we want to put a qualitative standard on what has existed. But my question is, we have so many fundamental questions, particularly missions and what is a strong independent regulator.

It seems to be we are going to have to wrestle a lot of things. Somebody suggested we write the mission. I think it was Mr. Raines. I venture to say I could anticipate taking weeks and weeks and weeks hammering that around and just what that description in statute should be of what the mission is so that it can be more readily applied.

My problem is I think we have a lot of haste here. We are going to run down and, Steve, having served on this committee before, you know what happens in haste. We sometimes do not dot all of our i's and cross all of our t's. And we can leave some awfully large holes in this mission.

Example, we are just starting to get down to people using the same description of what—you use the term independent and strong independent regulator and gave the example of the OCC and the OTS.

The Secretary, last week, said independent, strong, world-class regulator and gave the example of the IRS. I see a world of difference in that. And he may be more correct than we are or vice versa. But it seems we have to work.

If we are not defining our terms in the same way, we are going to put out a news release that Congress has passed a world-class, strong, independent regulator who cannot come up and talk to Congress, who cannot decide policy questions, who has limitations on supervision, has limitations on prosecutions, et cetera, et cetera, and going right down the line.

Or else, if we all put our minds to it and things do crystallize, we can come up with it.

I am just worried about doing in the limited amount of time left in this session. And I, myself, would like to have the legislation float for a while, so a lot of people could give us critiques of some of the problems that they see every day.

I left this session three or four times and met with people who critiqued me on various things happening here. I find that very informative and helpful, because, obviously, I do not think any of us on the committee are real experts in this area.

We are trying to craft language that will reflect expertise beyond the committee, actually.

With that, I appreciate all of the testimony of the panel. I look forward to hearing from you. As one member of Congress, look, if you see something happening, our names, you just have to call the Capitol operator and get a hold of us, give us some insight and some input as to, you know, how that big truck isn't going to fit in that little garage before we construct the garage.

And other than that, let's hope we can do something really contributory here to this system instead of ending up with just a whitewash on the garage door because there has been some circumstances that have brought this along.

With that, thank you very much for your testimony.
Mr. Chairman, I yield back.

What did he accomplish? He danced around pretty well but failed the people in the end. This testimony is from 2003 which proves he and the Democrats had plenty of time to attack this problem.

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