Sep 09 2009
Contact: Kevin Hall (202-224-2023)
WASHINGTON – Legislation introduced in June by U.S. Senators Bob Corker (R-TN) and Mark Warner (D-VA) got a major boost today with a Congressional Oversight Panel report recommending that the U.S. Treasury Department “consider placing its GM and Chrysler shares in an independent trust that would be insulated from political pressure and government interference.”
The Corker-Warner TARP Recipient Ownership Trust Act of 2009, S. 1280, introduced June 17, 2009, would move any government ownership stakes in private companies greater than 20 percent (currently AIG, Citigroup, and General Motors) into a newly created trust to be managed by three independent, non-political trustees, appointed by the administration, with the objective of looking at TARP-recipient companies with fiduciary responsibility to the taxpayers. The Corker-Warner bill directs the trustees to liquidate the government’s interests by December 24, 2011, but stipulates that if the trustees feel liquidation is not in the best interest of taxpayers, they can come back to Congress at that time with their alternative recommendation.
Corker and Warner believe their bill provides for a responsible exit strategy from government ownership of TARP-recipient companies.
“This past year we have seen unprecedented government intervention into the private market. In particular, the TARP legislation has taken American taxpayers into uncharted territory as common equity owners of private companies. We need a responsible exit strategy from government ownership, which is why Senator Warner and I have introduced this bill to expedite that process, shield taxpayer investment, and remove the potential politicization of the important core governance decisions at TARP-recipient companies,” said Corker.
“I believe our legislation will go a long way toward providing additional assurances that a political agenda is not being pursued through government ownership in any of these companies and that these companies also are being dealt with fairly,” Warner said. “The bipartisan legislation we have proposed will set clear parameters so we can take these investments out of the federal government's hands and ensure maximum returns. Taxpayers deserve to have their investments managed in a way that rewards the risk they have undertaken in helping to save these huge institutions.”
The bipartisan Corker-Warner TARP Recipient Ownership Trust Act is cosponsored by Senators Robert Bennett (R-UT), Michael Bennet (D-CO), Byron Dorgan (D-ND) and Amy Klobuchar (D-MN).
Click here to read the September COP report.