Just when you thought it was impossible to find more proof of the bungling of the bailout … Rep. John Lewis (D-GA), chairman of the House Ways and Means oversight subcommittee, announced this morning that his panel had found 13 of the top 23 recipients of TARP owing the government $220 million in back taxes.
Making matters worse was the fact that any company getting TARP aid had to certify to the Treasury Department that they didn’t owe back taxes before getting their share of the bailout, as Lewis explained. It appears that Treasury took the bailed-out businesses at their word rather than asking to actually see their tax records.
If there’s any doubt remaining that Congress would not approve any more spending on the financial rescue, Lewis’ opening statement this morning should put it to rest:
Taxpayers have no sense that there is any control over this money. They have no idea what, if anything, they will get in return. This entire program is based on trust – trust in the givers and trust in the takers. At this point, there is no trust.
To get money from Treasury, banks and others must sign a contract that states they have no material unpaid Federal taxes. Treasury did not ask these banks and companies to turn over their tax records. Treasury relied on the signed statements when it agreed to invest billions of taxpayer dollars. When you or I go to the bank to take out a mortgage to buy a house, we are asked for our tax returns. They’re not going to just take our word for it, and we are not asking for millions of dollars.
The Subcommittee looked at the top 23 TARP recipients. We found that thirteen of them owed more than $220 million in unpaid Federal taxes. Two companies owe over $100 million each. How can this be? If we looked at all 470 recipients, how much would they owe?
Are they signing contracts knowing that they owe taxes but thinking they will not get caught? Did then-Secretary Paulson turn a blind eye? Either way, this is shameful. It is a disgrace. 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.
