“The best way to rob a bank is to own one.”
Jim Foley, a local newspaper delivery driver, offered this quip in passing on Friday in response to AIG (American Insurance Group) heads using federal bailout funds to extend big bonuses to company executives.
Foley’s joke expresses the anger many Americans feel for companies that continue the practices that contributed to the country’s fiscal failures and are paying enormous bonuses as many suffer.
Members of local workers dished their two cents Thursday at Bank of America Downtown at 100 N. Broadway, joining Americans across 35 cities.
Protesters demanded more responsible corporate behavior and called on Congress to enact laws that would ensure it. They also want said they want an economy that works for everyone, instead of just people at the top, and chanted in favor of Employee Free Choice Act (EFCA), affordable quality health care for everyone and strong banking reforms.
The EFCA would enable working people to bargain for better benefits, wages and working conditions by restoring workers’ freedom to choose for themselves whether to join unions.
“The bailout money was given to help them to stay afloat – not to put it in their pockets so they could keep living that lavish lifestyle,” said Kennard McDonald, a union rep for Local 1 of the Service Employees International Union (SEIU), as he stood in front of Bank of America on Thursday.
“We’re tired of them putting our money in their pocket. It’s time-out for that. We’re going down the same road that we have been down,” McDonald said.
SEIU Local 1 was joined in front of Bank of America by Jobs with Justice Missouri Pro-Vote, St. Louis Workers and Concerned Citizens to protest what they call corporate greed and irresponsibility.
AIG’s gross misappropriation of the bailout funds landed in the hands of roughly 400 employees in the insurance giant’s Financial Products division.
The employee bonuses totaled $165 million.
However, a bi-partisan U.S. House of Representatives has since swiftly levied a 90 percent tax on the bonuses to reprimand the company and recoup funds from their financial folly (see Business Briefs).
AIG and Bank of America are two of 23 firms across country that received TARP (Troubled Asset Relief Program) funds.
TARP funds have helped to give stability primarily to the banking system, though some changes in stipulations are very rigid.
“Big banks get money to help themselves; it’s hard for us to go into Bank of America (with tax dollars inside of Bank of America) and get a loan,” McDonald said.
“We’re tired of losing our jobs because they won’t lend to employers so they can keep employees, and we’re tired of losing our homes to foreclosure because of the mess they got us in.”
Some banks returned the funds – that in many cases total about $90 million – citing strict regulations.
Banks must first be cleared of any federal tax problems, since about 13 of them receiving bailout money were found to owe more $220 million to the government.
The government determines banks’ TARP-worthiness by evaluating the following factors:
? Value of company to overall economy
? Ratio of bonuses to overall revenue
? Ratio of CEO pay compared to overall revenue
? Number of “retreats” taken annually
? Growth potential
? Analysis of potentially impacting threats.
Diane Wagner, spokeswoman for Bank of America, said the bank is lending more because of TARP funds.
“We are using the TARP funds responsibly and carefully managing our expenses,” Wagner said.
The spokesman said that the bank’s new Lending and Investing Initiative will allow them to track and provide the public with quarterly, aggregated updates on the bank’s performance in 10 areas identified as key to reviving the nation’s economy.
The areas are: Consumer, small business and commercial lending; loss mitigation; community development and nonprofit support; real estate, private equity and mortgage-backed securities.
“Additionally, in February, Bank of America made its first dividend payment totaling $402 million to the U.S. government under the Troubled Asset Relief Program,” Wagner said.
