The beginning banks, the first nine, the big banks, they all got their money one day after a meeting with Henry Paulson, in which he told them, “You’re taking this money.” But after that, the process was much more convoluted. And some banks lobbied for the money. Others banks didn’t lobby for the money but were told they were taking it. It all — what we basically concluded early on, that there was really no plan to this at all. While Treasury said that the purpose was to get credit flowing back into the system, the fact of the matter is, the way they went about this made no sense at all.
JUAN GONZALEZ: Well, what about that big meeting that you talk about — I think it was October 12th — the nine big banks? Eight of those banks, as you reported, ended up getting two-thirds of all of the money, 67 percent. How did that meeting come about, and who was there?
JAMES STEELE: Paulson actually called that meeting. He called the heads of those banks the night before and said, “I want you here tomorrow in Washington.” He was very vague as to what the purpose of the meeting was. But once they got there, he told them, “You are taking money. We are going to buy stock in your banks. And we need to get this economy going again.” Some bankers objected, saying by accepting this money it would look like they were weak. Others simply said they didn’t need it.
The fact of the matter is, one of the things we concluded very early on in this whole process is that while Treasury was trying to create the image that there was widespread weakness in these banks — and then there was a credit freeze, there’s no doubt about that — the way they went about this, just throwing the money out there in hopes that that would get the economy going, is not really what this was all about. There were just a handful of institutions that were terribly weakened. AIG the insurer, Bank of America, Citigroup, those three were clearly in very weakened form. So, many of the other big banks were not. And the best example that they didn’t need this money in the beginning was that many of them, within just a very few months, paid everything back.
AMY GOODMAN: Don Barlett, this meeting of the big nine, with Vikram Pandit of Citigroup, Jamie Dimon of JPMorgan Chase, Kenneth Lewis of Bank of America, Richard Kovacevich of Wells Fargo, John Thain of Merrill Lynch, John Mack of Morgan Stanley, Lloyd Blankfein, who succeeded Paulson as head of Goldman Sachs, Robert Kelly of the Bank of New York Mellon and Ronald Logue of State Street Bank, went to the secretary’s conference room. It was even difficult to find this information out. But what did he lay out for them there? And how does Paulson, who was former head of one of these banks, fit into it, as well?
DONALD BARLETT: Well, reduced to its simplest terms, he laid in front of them, each of them, a sheet of paper and saying, “Write on this the amount of money you’re going to take, and you are going to take it. Otherwise,” the implication was, “regulators will be looking at you and finding something wrong there. This is one of those areas in which you have no choice. By the end of the day, you will sign that you’re taking this amount of money. You know, call your boards, do whatever you need to do, but you will take the money.”
JAMES STEELE: Amy, this is one of the most astonishing things to us as part of this whole investigation. Here you have these people signing by hand their names, the date of the meeting, and filling in with a felt-tip pen how much money they wanted: $25 billion in one case, $15 billion in another, $10 billion. A one-page piece of paper. Wouldn’t we all like that the next time we take out a mortgage or a car loan or anything like that?
