Citi Has The Mets And Bank Of America Gets The Yankees
Citigroup and Bank of America each received $45 billion of funds from the Trouble Assets Relief Program. When the package was originally sold to the American public, it was based on dire need. If the companies don't get these funds, then life as we know it might cease to exist, we were told by our so-called political leaders. George W. Bush, at the time the head honcho of these United States, put it most succinctly: “This sucker could go down,” he said.
Now we've all had some time to review the bailout, and what it means to us. How are companies spending our hard earned tax dollars? The two biggest recipients of such funds have placed big bets on sports. Citigroup is under fire for negotiating a deal with the New York Mets that includes naming rights to their new stadium, and their rival Bank of America, is involved with a similar deal with the New York Yankees. That deal won't involve naming rights, but it has an equally high price tag. The cost for each company for these exclusive baseball sponsorship deals is $20,000,000 yearly. Bank of America is also coming under fire for their sponsorship of the NFL Experience, a 5 day Super Bowl party that is rumored to have cost the company another $10 million. It looks like the boom times are here again for Wall Street, all the while Main Street remains mired in an economic quagmire. Job losses continue to pile up for the “little guy”, while the “fat cats” continue to remorselessly party while projecting an image of prosperity. All this on money borrowed from the US government. Shame, shame indeed. Worse yet, there's no indication that these companies “get it” at all.
Wells Fargo, another TARP funds recipient to the tune of $25 billion has hastily withdrawn their plans for an event in Las Vegas. The company didn't care for the way news reports had labeled the event.
"The event is not a 'junket' for executives but a four-day business meeting and recognition event for hard-working team members who made homeownership achievable and sustainable for borrowers across the nation," the company said in a statement.
Henry Paulson actually got down on a bended knee and begged for these bailout funds to be released back in September. Without this bailout, the poor consumers of the U.S wouldn't be able to get car loans or new credit cards he said. As he sold this plan to the public, most people assumed that TARP funds would be used to shore up capital and get banks back to their core business of lending. Some even expected mortgage relief. Now the crows are coming home to roost, and the reports of corporations spending like drunken sailors are increasing in frequency.
$350 billion of TARP funds still haven't been paid out. All indications are that the Obama administration is much more likely to add serious restrictions to the use of the funds than what's currently being done. They're expected to limit executive pay at companies that received bailout money to $500,000.
"The American people understand we've got a big hole that we've got to dig ourselves out of, but they don't like the idea that people are digging a bigger hole even as they're being asked to fill it up," said Obama.
So far the changes aren't huge, but it looks like restrictions will become a major component of the bailout in coming months.
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