Citizens Against Government Waste (CAGW) today named House Financial Services Committee Chairman Barney Frank (D-Mass.) its March 2009 Porker of the Month. The chairman, having somehow eluded this dubious award in the past, finally delivered enough of Barney’s blarney to be recognized, appropriately, on St. Patrick’s Day.
On Monday, March 16, 2009, Chairman Frank expressed public umbrage over reports that insurance giant AIG, a recipient of $173 billion from the U.S. Treasury, had distributed $165 million in retention bonuses to some of the employees who helped bring the company to the verge of collapse. Chairman Frank fulminated that AIG had “rewarded failure” in awarding the bonuses. That’s rich.
Chairman Frank has never been shy about rewarding failure in the past and he generally favors using taxpayer dollars to do it. He was front and center in support of enactment of TARP, which noticeably had no enforceable strings attached related to executive compensation. Indeed, he helped promote perks for bank executives. According to a January 24, 2009 Boston Herald editorial, Chairman Frank made sure “one of the recipients of a $12 million infusion of federal cash was the troubled OneUnited Bank in Boston – a bank that had already been accused of ‘unsafe and unsound banking practices.’ Its CEO, Kevin Cohee had also been criticized by regulators for ‘excessive’ pay that included a Porsche.” Chairman Frank included specific provisions in TARP aimed at bailing out OneUnited and spoke directly to Treasury officials about it.
Perhaps most damning is Chairman Frank’s irresponsible defense of the activities of Fannie Mae and Freddie Mac over the years, even when it became clear that executives at the two giant government-sponsored enterprises (GSEs) had manipulated earnings statements and gifted themselves with huge bonuses based on the bogus numbers, misled regulators, and steered the companies into such shoddy condition that they posed a systemic risk to the entire financial system. Chairman Frank must regret his September 11, 2003 statement to The New York Times that Fannie and Freddie “are not facing any kind of financial crisis…[t]he more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing.” During a 2003 committee hearing related to establishing oversight over the GSEs, he casually announced that he didn’t want “the same kind of focus on safety and soundness that we have in Office of the Comptroller of the Currency and the Office of Thrift Supervision. I want to roll the dice a little bit more in this situation towards subsidized housing.” We know how that worked out: the GSEs are now almost entirely owned by the taxpayers; Freddie Mac tapped the Treasury for $13.8 billion in 2008; and Fannie Mae is on deck to get $15.2 billion this year.
“Even in this global capital of hot air, bait-and-switch politics, and double-talk, Chairman Frank deserves singular recognition,” said CAGW President Tom Schatz. “It strains credulity to hear him rebuking anyone for rewarding failure after he helped create the disaster in the first place.”
For his ample and under-appreciated contributions to the nation’s current economic meltdown and his near-genius ability to engage in the two-faced blame game, CAGW names House Financial Services Committee Chairman Barney Frank March Porker of the Month.
Citizens Against Government Waste is the nation’s largest nonpartisan, nonprofit organization dedicated to eliminating waste, fraud, abuse, and mismanagement in government. Porker of the Month is a dubious honor given to lawmakers, government officials, and political candidates who have shown a blatant disregard for the interests of taxpayers.