Holes in the TARP: An Open Letter to Congress

An open letter to Congress:

I thank you for, and applaud, your effort to prevent the continued misuse of government "TARP" money, the current allocations of which are contrary to the original intent as proposed by the Secretary of the Treasury and approved by Congress.

This morning, again, we find, another massive government injection of taxpayer funds, largely borrowed from foreign nations, into CitiGroup, again, on the flawed premise Citi is "systemically important" and thus "too big too fail."

If we continue to allow these institutions to operate under the premise they are too big too fail, we forever will be held hostage to the consequences of poor management and risk-taking decisions, and these institutions will "fail" again and again, until at some point they are dismantled.

At minimum, Senator, the executive managements under whose tenure these institutions have failed, to the extent they require government assistance to assure their future (and this would include automakers, insurance companies and the like), should be forced to resign and forfeit any deferred compensation and golden parachute-type compensation.

Certainly in this great country of ours we can find talented individuals to take up the reins of these corporations and institutions to lead them to a more stable and profitable future. It is unconscionable employees of these companies are losing their jobs because of the bad decisions of these executives, but the executives are allowed to retain their positions without penalty or consequence.

At CitiGroup alone, more than 50,000 will lose their jobs, yet no one has called for its executive management to resign on the basis of incompetence.

If our federal, state and local governments can have regular, orderly "management" changes every two-to-four years at the direction of the voters, then certainly these rescued corporations, their employees, shareholders and their taxpayer benefactors would not inordinately suffer should the resignations of existing managements and boards of directors be required as a condition of receiving any (or any additional) taxpayer funds.

In your efforts to prevent continued abuse of EES Act of 2008 and improper allocation of TARP funds, I urge you to sponsor legislation to require any future recipients of taxpayer money to present a business plan prior to any request which includes the immediate resignation of the recipient's Chairman of the Board and its Chief Executive Officer (both, if held separately), and the resignation/replacement of all remaining executive officers and board members within one year of receiving rescue funds, with forfeiture of all deferred compensation or departure payments.

Again, thank you for your continued effort to insure the protection of taxpayer funds and to lift the veil of secrecy which has surrounded the actions of the Treasury and the Federal Reserve during the last three months.