Andy Kroll

Andy Kroll

Senior Reporter

Andy Kroll is Mother Jones' Dark Money reporter. He is based in the DC bureau. His work has also appeared at the Wall Street Journal, the Detroit News, the Guardian, the American Prospect, and TomDispatch.com, where he's an associate editor. Email him at akroll (at) motherjones (dot) com. He tweets at @AndrewKroll.

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Congress: Hey Geithner, Show Us the Bailout Money!

| Tue Jul. 14, 2009 2:17 PM EDT

Congress is fed up with the Treasury Department's lack of bailout transparency and, more specifically, its refusal to account for how rescued financial institutions have used their billions in taxpayer funds. And rightly so. It's only fair that, in bailing out struggling financial institutions, Geithner and Co. track how those taxpayer dollars have actually been used. Specifically, whether they've been used for their intended purpose (boosting lending to small businesses and consumers), or simply to shore up their balance sheets—as appears to be closer to the truth. Since Geithner failed to respond to a May letter from 20 House and Senate Democrats on this subject, Congress is taking matters into its own hands. It has inserted into the FY 2010 Financial Services and Government Appropriations bill language to legally mandate that Geithner either increase oversight and transparency over the use of bailout funds, or show up before Congress and explain why not.

The Treasury's rationale for not tracking these funds, an excuse they've been peddling for months now, is that it's essentially impossible to track the flow of bailout funds once they're in the banks' coffers. But that's BS. The Special Inspector General for TARP, or SIGTARP, said in its April quarterly report to Congress (PDF) that it had gathered this very information by surveying 364 banks that had received funds before January 31. All SIGTARP did was send letters to the banks and ask nicely. As the 20 lawmakers wrote in May:

Although the results of the [SIGTARP] survey still need to be analyzed, one thing is clear: Treasury's arguments that such an accounting was impractical, impossible, or a waste of time because of the inherent fungibility of money were unfounded. Banks generally provided a reasonable level of detail regarding their use of TARP funds, and, while the response quality was not uniform, some banks were able to provide detailed, at times even granular, descriptions of how they used taxpayer money.

The Financial Services and Government Appropriations bill mandating that Geithner explain himself should come up for a vote before the full House later this week. After countless reports and statements from individuals like SIGTARP point man Neil Barofsky, Congressional Oversight Panel chairwoman Elizabeth Warren, lawmakers, and others calling for far greater transparency over the bailout, perhaps Congress' latest effort will shine a light on how taxpayers’ billions have actually been used—hardly an unreasonable proposition.

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The Next Big Bailout Bamboozle

| Fri Jul. 10, 2009 7:15 PM EDT

One of the main watchdogs over the government's $13 billion financial bailout, the Congressional Oversight Panel, released its monthly report for July today, bringing some much needed scrutiny to the repayment of TARP funds and the Treasury Department's questionable oversight of that process. The COP highlighted the sale of government-held warrants (options to buy stock for a set price over a predetermined time period) back to bailout recipients exiting TARP, who, according to Treasury's guidelines, get the first crack at repurchasing their own warrants. This repurchasing process began earlier this spring, when the first bailed-out banks bought their stocks and warrants to extricate themselves from the taxpayer-funded TARP; since then, the process has been dogged by numerous reports showing that the Treasury sold warrants for much less than they could have. By one estimate, taxpayers were shortchanged in those early transactions by millions of dollars.

The COP's latest report puts a number to what many suspected: The Treasury, the panel estimates, sold warrants back to the 11 small banks who've so far completely exited the bailout for only 66 percent of their value. If the Treasury had sold them for closer to market value, taxpayers could’ve recouped $10 million more—a small sum compared to the entire bailout, but nothing to scoff at. And though the warrant-repurchasing process will differ for megabanks like JPMorgan Chase, Wells Fargo, and several others currently trying to buy back their warrants, applying that 66-percent rate to all government-held warrants could result in a loss of $2.7 billion.

If you've closely followed the COP's reports, you'll notice a troubling similarity to previous reports in this latest finding. The panel's widely cited February report (PDF), which analyzed the Treasury's 10 largest TARP investments in 2008, found that the Treasury had received, on average, only $66 for every $100 spent, resulting in a $78 billion shortfall. (This while Berkshire Hathaway received $110 assets for every $100 when it invested in Goldman Sachs, and Mitsubishi received $91 in assets for every $100 invested in Morgan Stanley.) Which means that the Treasury received a 34-percent markdown on assets it bought (with taxpayer money) last year with its early TARP investments, and received only a 34-percent markdown for its early warrant sales back to banks.

Coincidence? Hardly.

Geoengineering Won't Save Our Oceans

| Thu Jul. 9, 2009 6:13 PM EDT

Last month I wrote about geoengineering, controversial schemes to deliberately manipulate the Earth’s climate to slow the planet’s warming. I focused mostly on a proposal often called “solar radiation management” (PDF), in which sunlight is blocked in the upper atmosphere in order to reduce warming at the planet’s surface. A new study, cowritten by one of the main sources in my piece, Stanford’s Ken Caldeira, makes a major conclusion about this type of geoengineering: It may cool the planet, but it won’t prevent dangerously high levels of carbon dioxide from wreaking havoc on our oceans.

As MoJo’s environmental correspondent Julia Whitty has written, our oceans are already at their breaking point: Man-made emissions have negatively impacted the ocean's chemistry, and toxic waste is being dumped into our oceans without regard for its harmful impact on fragile marine ecosystems. To make matters worse, scientists fear that large-scale geoengineering proposals could cause further acidification of our oceans (for instance, the sulfur injected into the atmosphere in a solar radiation management scheme would fall back to the Earth's surface through precipitation), damaging the lifeforms that live there. More recent geoengineering studies (PDF), however, allayed those fears, finding that solar radiation management wouldn’t acidify the oceans as much as first anticipated.

Nonetheless, the Caldeira report finds that our oceans and coral life are in grave danger—and even the best-case-scenario geoengineering scheme to block out the sun’s rays won’t help the oceans much. Paired with a report from earlier this year stating that global warming is essentially irreversible, that CO2 will hang around in the atmosphere for around a thousand years or so, the Caldeira paper suggests that solar radiation-related geoengineering efforts aren't worth pursuing.

Perhaps geoengineering researchers would be better off focusing on ways to remove CO2 from the atmosphere, like synthetic trees that “scrub” the CO2 out of the air. After all, why waste time, money, and manpower on a geoengineering scheme like solar radiation management if, as this latest research suggests, it won’t do much to save our planet?

Mountaintop Removal's Fate Heads to Capitol Hill

| Wed Jun. 24, 2009 8:35 PM EDT

On Wednesday afternoon, lawmakers in Washington, DC, will finally take up the fate of mountaintop removal mining, a type of surface mining that levels the summits of mountains to expose coal seams. The practice inflicts substantial damage to the surrounding environment and communities, mainly because the removed rock and soil is dumped into nearby rivers and streams, contaminating them and often burying water sources. The Senate Subcommittee on Water and Wildlife will host the first legitimate hearing on mountaintop removal in nearly seven years, titled "The Impacts of Mountaintop Removal Coal Mining on Water Quality in Appalachia." Witnesses include leading experts on the subject, like Maria Gunnoe, a 2009 Goldman Environmental Prize winner for her organizing against the mining practice; Dr. Margaret Palmer of the University of Maryland’s Center for Environmental Sciences; and Randy Pomponio, the director of the EPA’s Mid-Atlantic region, among others.

An outspoken opponent of mountaintop removal, Sen. Benjamin Cardin (D-Md.) called the hearing to more thoroughly review the effects of the practice, a decision that comes on the back of legislation he introduced in March with Sen. Lamar Alexander (R-Tenn.) to completely ban the mountaintop removal called the Appalachia Restoration Act. The hearing also has supporters and opponents of mountaintop removal fired up: Both coal industry-friendly and environmental groups have chartered buses to Capitol Hill for the hearing, while other organizations will be streaming video of the event. (Not to mention the recent arrests of NASA's James Hansen and others who were protesting mountaintop removal in Southern West Virginia.)

 

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