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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The Bailout Swindle, Act II

| Fri Jun. 5, 2009 12:07 PM EDT | Scheduled to publish Fri Jun. 5, 2009 4:21 PM EDT

Numerous are the ways the government’s multi-trillion-dollar bailout has scammed taxpayers. One estimate, from the Congressional Budget Office, says the taxpayer-funded TARP could subsidize bailout recipients by a whopping $356 billion by 2010. Now, eight months into the bailout and on the back of the Treasury's much hyped stress-test results, several of the largest recipients are itching to return their bailout billions. Early next week, the Federal Reserve will announce which banks can begin repaying their TARP stock investments using the Fed's updated criteria.

But to completely extract themselves from government control, the banks will also look to buy back their government-held warrants. Warrants are basically stock options to buy shares at a set price over a certain period of time. (In this case, that period is 10 years.) The government initially purchased banks' warrants as part of its plan to recapitalize them and bolster their financial health. Banks now want to buy those warrants back—and it’s here that taxpayers could lose big again.

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