As the leaders of our country's oldest, largest and most prestigious financial institutions plunged our economy into a near 1929 style depression; they paid themselves billions of dollars in bonuses. Now, they want middle-class America to step-in and rescue them with its hard earned tax dollars. Hard working Americans could be paying for this bailout of Wall St. billionaires for decades.
According to Jesse Fried, a nationally recognized expert on executive compensation, during the last two years, Wall Street financiers received over $60 billion in bonuses. Lehman Brothers alone paid out $6 billion in bonuses during 2007 before recently filing bankruptcy.
Now, as part of the Bush Administration's bailout bill, Section 107 will give current Treasury Secretary and former Goldman Sachs Chairman and CEO, Henry Paulson the power to waive any provisions of the Federal Acquisition Regulation (FAR) he chooses. In its current form, Treasury Secretary Paulson's power to waive provisions of the Federal Acquisitions Regulations has no time limit. The waivers could go on indefinitely and could conceivably apply to any and all areas of federal contracting.
Secretary Paulson will no doubt be leaving Washington and be back on Wall St. in a matter of months; therefore, giving him the broad power to waive provisions of the Federal Acquisition Regulation that might be unpopular with his friends and associates on Wall St. is very bad idea.
Every man, woman and child in America will suffer from this financial fiasco in one-way or another. This devastating financial crisis is the direct and undeniable result of a total lack of proper oversight by Bush Administration officials. If Congress is sincerely attempting to solve this problem, the last thing they should do is give Secretary Paulson the power to waive the very federal laws that were passed to keep federal officials in check.
During the Bush Administration, more than 15 federal investigations have uncovered hundreds of billions of dollars in abuses and outright fraud in federal contracting programs. (http://www.asbl.com/documentlibrary.html) In just one example, Bush officials claim to have lost $9 billion dollars in cash in Iraq.(http://edition.cnn.com/2005/WORLD/meast/01/30/iraq.audit/) Four separate federal investigations have been released during the last sixty days that found hundreds of millions of dollars in abuses to have taken place in federal small business contracting programs. (http://www.sba.gov/IG/05-15.pdf)
Bush Administration officials have clearly shown they do not need less regulation, quite to the contrary, they need more regulation and they should be required to strictly adhere to all existing federal acquisition laws.
If the bailout bill passes with Section 107 intact, it could prompt billions of dollars in abuses and even fraud in a variety of areas. Section 107 is more of the same lax oversight and failure to adhere to federal law that created this financial meltdown in the first place. Section 107 should be removed from the bailout bill immediately.
Follow Chris Gunn on Twitter: www.twitter.com/chrisgunn