Bailout Bonanza


In these days of economic turmoil many Americans are worried about staying employed and keeping up with mortgage payments, but one group of former government officials is struggling just to keep pace with an influx of new business opportunities. This “tight-knit” cadre, reports the New York Times, are veterans of the savings and loan bailout of the 1990s who helped to set up and run the Resolution Trust Corporation. These officials have since moved on to the private sector as “private lawyers, investors and lobbyists” and are currently seeking ways to cash in on the economic crisis. According to the Times:

With $700 billion in bailout money up for grabs, and billions of dollars worth of bad debt or failed bank assets most likely headed for sale or auction, these former officials are helping their clients get a piece of the bailout money or the chance to buy, at fire-sale prices, some of the bank assets taken over by the federal government.

Among those involved in the bailout bonanza is L. William Seidman, a former chairman of the FDIC and RTC. According to the Times, he is among a handful of former officials who are “sharing ideas with Treasury Secretary Henry M. Paulson Jr. and the transition team for President-elect Barack Obama—even while they are separately directing investors or banks on how to best profit from this advice.”

“It is an enormous market,” Seidman told the paper. “I am enjoying this.”

Equally blunt in his assessment of the bailout “market” was John Douglas, who served as the general counsel to the FDIC in the late ’80s and assisted in setting up the RTC: “It is a good time to be me.” Meanwhile, it’s a bad time to be… well, us.

FACT:

Mother Jones was founded as a nonprofit in 1976 because we knew corporations and the wealthy wouldn't fund the type of hard-hitting journalism we set out to do.

Today, reader support makes up about two-thirds of our budget, allows us to dig deep on stories that matter, and lets us keep our reporting free for everyone. If you value what you get from Mother Jones, please join us with a tax-deductible donation today so we can keep on doing the type of journalism 2018 demands.

  • Dan Schulman

    Daniel Schulman is Mother Jones' deputy Washington, DC, bureau chief. Reach him at dschulman (at) motherjones.com. Dan is the New York Times best-selling author of Sons of Wichita, a biography of the Koch brothers that is now out in paperback.