Shocking Corruption In Treasury Department

One of the biggest reasons that protesters are willing to risk their safety in places like Zuccotti Park and UC Davis is because they are fed up with government corruption at the highest levels. To many, it seems like government policy is rigged to only help out the rich and powerful, the 1% of American society. A recent example of this was the report that bailed-out banks may have made $13 billion from Fed loans.

According to new reports, though, another bigwig ostensibly in charge of steering the US economy used his insider information and power to help his old business buddies. Former Secretary of the Treasury Hank Paulson (who famously demanded a blank check from Congress to bail out banks) held several meetings in the summer of 2008 with the heads of funds that he was chummy with to give them insider notes about where the economy was headed — and what US policy would be.

According to the Bloomberg report, Paulson held a press conference at which he maintained that Fannie Mae and Freddie Mac were solvent and there was nothing to be worried about. Immediately afterwards, he met with stock managers he’d known from his time at Goldman Sachs to tell them the exact opposite — to bet against Fannie and Freddie. This kind of crony capitalism in unconscionable: a high ranking official, instead of looking out for all Americans, held a secret meeting where he gave stock tips to his pals.

This revelation fits exactly into what Occupy Wall Street protestors have been pointing out for months about inequality of wealth and power in America. Reuters finance blogger Felix Salmon perfectly sums up the scandal, “Paulson was giving inside tips to Wall Street in general, and to Goldman types in particular: exactly the kind of behavior that ‘Government Sachs’ conspiracy theorists have been speculating about for years. Turns out, they were right.”

Unfortunately, crony capitalism is not illegal… for now. If the Occupy Wall Street movement continues to resonate with people and politicians around the world, though, there’s no telling what kind of change we can achieve.

Related Stories:

Banks May Have Earned $13 Billion Off Of Secret Federal Bailout Money

How Big Banks And States Scheme Against The Unemployed

Top 10 Must-See Occupy Wall Street Videos [Slideshow]

Photo credit: allaboutgeorge's Flickr stream.

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Norma V.
Norma Villarreal3 years ago

Corruption in the Treasury department? Shocking....

Yvonne Fast
Yvonne F.3 years ago

US has to stop this corruption! It's spreading and poisining the countries dignity! Put those bastards in jail and make them pay the money back!

Steven Brewer
Steven Brewer3 years ago

The Other R
Blinking and twitching are good indicators that someone is lying but a better indicator is to watch their mouths, If they are a Republican't or a blue dog Democrat and their lips are moving then they are lying....

Toby Seiler
Toby S.3 years ago

Craig...yes, Timothy Geithner is a product of the FED. He has no real intention of putting any policy in place that would limit the FED whatsoever. I do not believe he would stop them from saddeling the American people with incredible debt, beyond all hope of paying back...technically bankrupt. Hell no, the yoke of debt just keeps piling on.

Other R, yes, take the burden of funding governent off of the for profit FED system. Print new US Treasury Dollar that is equity (gold, silver, public lands, govt. assets) in the USA and spend it. The new money would pay for a smaller government than we have today, simply by removing opportunity for graft and corruption, or at least shifting it to a new set of players with some new rules..

A US Treasury Dollar, equal to a Federal Reserve Note, limited in quantity and growth, would stabilize the government. We can surely remove 1/3 of people in government by removing the financial incentive to make personal profit from public office.

the Other RobertO
Robert O.3 years ago

Does anyone recall how much Hank Paulson was blinking and twitching during TV interviews? Isn't that supposed to be a sign of lying?

the Other RobertO
Robert O.3 years ago

Apparently, there were trillions loaned in private - through the Fed - to banks, even before TARP. Now I hear noises about the Fed getting involved in the Euro crisis. I'm wondering what that might do to the value of the dollar, and how it will affect the 99%. Thoughts, anyone?!

Peter G.
Peter Gatliff3 years ago

This bailout is nothing but Fascism at its best. Benito Mussollini stated fascism is the merger of corporations and the state government. I feel this is why the US Senate passed the Suspension of Habeus Corpus thursday knowing this news would be made public. If I were a politian I would have a big fear of hyper inflation, revolution and jail time.

Avril L.
Avril Lomas3 years ago

I am still waiting for ANY of the big bank crooks to go to jail,I guess that space is reserved for the little folks and the 99% who get there!. New info. The fed actually lent the banks seven trillion.@ 0.01% interest.shhhh..
keep that under your hat.

Craig Zimmerman
Craig false3 years ago

Tim Geithner isn't much better than Paulson.

Toby Seiler
Toby S.3 years ago

We elected President Obama to make change. He promised it and we gave him a mandate to make it. There has been no change in Treasury.

Clean the US Treasury out now Mr. President and use the US Treasury to stabilise the government and it's financial future. Make a constitutional change to the US "Dollar", our currency. Make a legitimate currency and money supply that benefits ALL of the republics citizens.

Make a US Tresury Dollar and get the burden of running governmnet off of the for-profit FED banking system.

Doing what you were elected to do in 2008, Mr. President, would STABILIZE this country and you would handily be re-elected.


Put Paul Krugeman in for the transition OR RON PAUL! LOL

I say a prayer that you have the intestinal fortitude to make the changes that are needed President Obama. Don't play the role of lame what you were elected to do.