WASHINGTON, D.C. - Vermont's U.S. Rep. Peter Welch is calling for banking executives to abide by strict compensation limits Congress intended for recipients of federal bailout money, despite a last-minute loophole orchestrated by the Bush administration.
During last-minute negotiations leading up to the passage of the $700 billion Emergency Economic Stabilization Act in October, Treasury Secretary Henry Paulson insisted on a one-sentence change that effectively mooted any caps on executive compensation to banks receiving money through the Troubled Asset Relief Program, according to the Washington Post. Additionally, the Associated Press reported Sunday that TARP recipients doled out nearly $1.6 billion in salaries and bonuses to top executives last year.
In response, Welch has rallied 22 members of Congress to insist that banks receiving federal bailout funds curtail executive spending.
"It is unacceptable for banking executives to pad their pockets with massive bonuses and benefits after mismanaging their companies and coming to the American taxpayer for aid," Welch said. "The American people acted in good faith during the financial industry's time of need, and now it's time for banking executives to take responsibility for their actions and curtail their outrageous compensation practices."
A letter Welch sent last week to CEOs of eight top banks receiving bailout funds is attached and copied below. Twenty-two members of Congress signed on to the letter.