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Madoff Used Social Family Networks to Rake in Billions
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Employees Make a List Bosses Check it Twice
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A stampede to ‘banks’ as companies seek a piece of the bailout
The news that CIT Group Inc. and American Express were approved this week for $5.7 billion in bailout funds after becoming “bank holding companies” strikes us as a particular sort of American ingenuity.
After all, who wouldn’t call themselves a ‘bank holding company,’ if that qualified them for billions of dollars in taxpayer money?
Hint: Click in map to explore connectionsStory continues below interactive map
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(requires Java)MAP HINTS: Click expands a name. Control+Click centers map on a name. Solid lines are current relations. Dotted lines are former relations. For advanced tools choose Tools > Options from the menu at top. More help. Not seeing the maps? Please go here to check for the latest version of Java.The independent watchdog group, Project on Government Oversight (POGO), sent a letter to Congressional leaders last week identifying eight companies that have sought funds from the Troubled Asset Relief Program by purchasing banks, or else getting approved as “bank holding companies,” to which bailout money is restricted.
POGO suggested the companies “are trying to morph into different animals” to get a piece of the federal pie. A Dutch insurance company called Aegon is even attempting to purchase a bank in Maryland in order to get at TARP funds.
And who could blame them, really, when the list of companies applying for TARP funds grows longer each day?
POGO’s list includes:
- Lincoln National Corporation, which is in the process of acquiring Newton County Loan and Savings, an Indiana bank.
- Hartford Financial, which is acquiring Federal Trust Corporation, the parent company of Federal Trust Bank in Florida.
- Genworth Financial, which is purchasing InterBank FSB in Minnesota.
- CIT Group, which has converted its Utah Industrial Bank to a Utah State Bank.
- Morgan Stanley, which was approved as a bank holding company on Sept. 21.
- GMAC Financial Services, which opened GMAC Bank, a Utah-chartered bank, and was approved as a bank holding company on Christmas Eve.
- American Express, the nation’s fourth-largest credit card company, which was approved as a bank holding company on Nov. 10. The company owns American Express
Centurion Bank, an industrial loan bank, and American Express Bank FSB, a federal savings bank in Utah. - Goldman Sachs Group, which was approved as a bank holding company in mid-September and opened Goldman Sachs Bank USA in Salt Lake City.
Lincoln, Genworth, and Hartford are attempting to become Federal savings and loan holders through the Office of Thrift Supervision.
The others have added bank holding company to their list of services by opening branches in Utah and receiving approval from the Federal Reserve Board of Governors.
Yet POGO states that four of the companies claimed to be in good financial shape just weeks before applying for bailout money. The letter quotes American Express CEO Kenneth Chenault, for instance, asserting the company’s “business model is well positioned to generate earnings and excess capital, even in an economic environment that is likely to be among the weakest in many years.”
Of course, American Express has had to contend with higher credit costs and mounting losses as a result of the economic meltdown too. But when questioned about their interest in the bailout funds, neither American Express, nor CIT Group would explain how they intended to use it.
“The Fed has yet to meet a bailout it does not like,” Sean Egan, managing director at Egan-Jones Ratings Co., an independent credit-rating firm, told the Wall Street Journal.
Doesn’t exactly inspire trust that these companies will use the money to advance the goals set out by Congress to unfreeze the credit markets and strengthen the financial system.
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This post is tagged with: American Express, American Express Company, Business, Centurion Bank, CIT Group Inc., Genworth Financial, GMAC Financial Services, Goldman Sachs Group, Hartford Financial, Lincoln National Corporation, Morgan Stanley, Project on Government OversightRead related stories: Business · Recent Stories
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Madoff used social, family networks to rake in billionsDecember 28, 2008 at 1:42pm
Could one man operate an alleged $50-billion Ponzi scheme without help from anyone else?
The Stampede to Banks As Companies Seek a Piece of the Bailout
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Caroline Kennedy’s ties to Bloomberg may hurt her prospects
Caroline Kennedy has friends in high places, including President-elect Barack Obama, whom she supported in his quest for the presidency.
But her connections to New York City Mayor Michael R. Bloomberg may be hurting her push to be appointed to the U.S. Senate seat that Hillary Rodham Clinton will vacate when she becomes secretary of State.
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(requires Java)MAP HINTS: Click expands a name. Control+Click centers map on a name. Solid lines are current relations. Dotted lines are former relations. For advanced tools choose Tools > Options from the menu at top. More help. Not seeing the maps? Please go here to check for the latest version of Java.“Ms. Kennedy’s ties to Mr. Bloomberg’s political team and her waffling over whether she would support a Democrat in next year’s (New York City) mayor race appear to be angering some Democrats,” The New York Times reported Wednesday.
Among these Democrats is Sheldon Silver, the speaker of New York’s state Assembly.
He has said he would not advise Gov. David A. Paterson to appoint Kennedy, the daughter of the late President Kennedy, the Times reported.
“Her first obligation might be to the mayor of the city of New York rather than the governor who appointed her,” Silver told an Albany radio station.
Observers speculate that having Kennedy in his debt would help Bloomberg, a political independent, in his run next year for a third term, as the obligation might keep Kennedy from endorsing Bloomberg’s Democratic opponent.
Bloomberg has said that he’s not backing anyone to fill the Senate vacancy. However, he has strongly defended Kennedy against the criticism that she does not have the credentials for the job.
“Being a senator, you don’t have to know about every issue coming in. That’s what your staffs are for,” he told New York’s Daily News. “They’re one out of 100 people that vote together, and Caroline Kennedy is eminently qualified to be a senator.”
Neutral or not, Bloomberg is linked to Kennedy’s candidacy in a variety of ways.
Kevin Sheekey, Bloomberg’s deputy mayor for government affairs, has been advising Kennedy. A former aide to U.S. Sen. Daniel Patrick Moynihan, Sheekey ran Bloomberg’s 2001 and 2005 mayoral campaigns.
Kennedy has hired Knickerbocker SKD, a political consulting firm with ties to Bloomberg, to help her secure the appointment.
Josh Isay, Knickerbocker’s founder, was a key adviser to Bloomberg in his successful effort this year to get around New York City’s two-term limit for mayors.
Kennedy is also linked to the Bloomberg administration through Joel Klein, the chancellor of New York City’s Department of Education.
Nicole K. Seligman, Klein’s wife, lived across the hall from Kennedy when they attended Harvard’s Radcliffe College, and Seligman was a bridesmaid at Kennedy’s wedding to Edwin A. Schlossberg
Klein, a Bloomberg ally, recruited Kennedy in 2002 to head the education department’s Office of Strategic Partnerships and effort to secure private funding for public education initiatives.
Kennedy worked in that position until 2004 at a salary of $1 a year. She’s now the vice chair of the Fund for Public Schools, another effort to secure funds for city schools.
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A stampede to ‘banks’ as companies seek a piece of the bailoutDecember 26, 2008 at 9:08am
The news that CIT Group Inc. and American Express were approved this week for $5.7 billion in bailout funds after becoming “bank holding companies” strikes us as a particular sort of American ingenuity.
Kennedys Ties to Bloomberg May Hurt Her Prospects
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French Investor Who Lost 14b With Madoff Kills Himself
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One Ponzi Schemer Eclipses Another
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Mamma Mia’s a hit, no matter what the critics say
Greeted by mixed reviews, Mamma Mia! The Movie is getting its revenge – at the box office.
Released in July, the cinematic version of the long-running musical did well in the U.S., grossing $143.8 million to be the year’s 12th biggest earner.
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(requires Java)MAP HINTS: Click expands a name. Control+Click centers map on a name. Solid lines are current relations. Dotted lines are former relations. For advanced tools choose Tools > Options from the menu at top. More help. Not seeing the maps? Please go here to check for the latest version of Java.But strong sales in Europe, especially in the United Kingdom where it became the highest-grossing film of all time, have pushed the movie’s total revenue to more than $572 million. This makes it the 48th highest grossing movie in history.
Meryl Streep“No one writes about that,” Meryl Streep, the movie’s star, told David Carr of The New York Times, as reported in his The Carpetbagger blog.
“It doesn’t get the press, partly because it is perceived as a woman’s movie, but Mamma Mia! has buried, and I mean buried, all the conventional blockbusters,” she continued.
And most of those blockbusters cost much more to make than “Mamma Mia!,” which came in at $52 million.
“I mean, the budget for that musical would have fit into the props budget for any Matrix film, or you know, Hellboy,” Streep told reporters at a studio briefing, as reported on the website collider.com.
When they do write about it, critics attribute the movie’s success to a variety of factors, including Streep’s ability to put people in the seats. “The Devil Wears Prada,” her 2006 summer movie, grossed $125 million and $327 million worldwide.
In addition to Streep, Mamma Mia!, now out in DVD, starred Pierce Brosnan and Colin Firth, two solid draws.
The movie also had a built-in audience, those millions of people worldwide who had seen the theatrical production.
The musical featuring ABBA songs debuted in England in 1999 and has since been performed in many countries and many languages.
Phyllida Lloyd, who directed the stage version in England also directed the film version, her first movie. In another case of the rich getting richer, actor Tom Hanks and his wife, Rita Wilson, were two of several executive producers of the film.
Though it received some positive reviews, the movie was blasted by some critical big guns.
Kenneth Turan of the Los Angeles Times scolded Lloyd and writer Catherine Johnson for “rookie mistakes” such as cramming too many actors and singers into the film.
Anthony Lane of The New Yorker wrote that the movie would make a “useful contribution” to the debate over the legal definition of torture.
Brosnan, especially, seemed to Lane to be someone who had been dragged to an island against his will (the movie is set in Greece) and then forced to sing.
“There is no delicate way of putting this,” Lane wrote, “but anyone watching Brosnan in mid-delivery will conclude that he has recently suffered from a series of complex digestive problems, and that the camera has, with unfortunate timing, caught him at the exact moment when he is finally working them out. What has he done to deserve this?”
Critics never have to eat crow, but they should get ready for Mamma Mia 2.
Asked about rumors of a sequel in the works, Streep responded, “Now! Now! Now!”
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One Ponzi schemer eclipses anotherDecember 24, 2008 at 9:11am
What’s a Ponzi scheme got to do to get lasting respect? In October, Thomas J. Petters, a Minnesota businessman, was the talk of the business world for allegedly defrauding investors of $3 billion or more.
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#1. William Perry 12.28.2008
Looks like a modified chain letter with a lot more letters… Post Office figured out that there would be a lot of losers of (The enticing prize)and just a few that were going to get lots of other peoples prize. Our government figured out the scheme and outlawed the chain letter to be sent thru the mail…. Right? Just keep diggin and let’s get a handle on the US Dollar baby… Greed will wipe out every country if we don’t get a handle on honest business… Borrow at 6%, save at 3% and put down 30% on houses and cars… This country needs industry right now to put Americns back on course…. Old fashioned? Maybe…. But it’s the real thing when you save up for something and pay cash to the merchant who makes it avail-able. I’m 72 and see greed tearin us up. William P.
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