Documents Confirm Paulson Pressured Banks Into Taking Original TARP Money

You remember that infamous October 13, 2008 closed-door meeting former Treasury Secretary Hank Paulson held with the CEOs of the nation's largest banks where he supposedly arm-twisted them into taking the first portion of the $250 billion in TARP money by selling preferred equity stakes? Yeah that one. Well, public interest group Judicial Watch has gotten their hands on some very important documents from the meeting, released by the Obama administration.

A 'CEO Talking Points' documents shows that Paulson told the bank CEOs that they need to agree that: 1. "We don't believe it is tenable to opt out because doing so would leave you vulnerable and exposed; 2, "if a capital infusion is not appealing, you should be aware your regulator will require it in any circumstance."

Also attending the meeting on the government side was current Treasury Secretary Tim Geithner, FDIC Chairman Shelia Blair, and Fed Chairman Ben Bernanke. On the bank side you had Vikram Pandit of Citigroup (NYSE: C) ($25B), Jamie Dimon of JP Morgan (NYSE: JPM) ($25B), Richard Kovacevich of Wells Fargo (NYSE: WFC) ($25B), Ken Lewis of Bank of America (NYSE: BAC) ($15B), John Thain of Merrill Lynch ($10B), John Mack of Morgan Stanley (NYSE: MS) ($10B), Lloyd Blankfein of Goldman Sachs (NYSE: GS) ($10B), Robert Kelly of Bank of New York (NYSE: BK) ($3B), and Ronald Logue of State Street Bank (NYSE: STT) ($2B).

Other things revealed in the document included:

• "Major Financial Institution Participation Commitments" signed by the nine bankers on October 13. The CEOs not only hand wrote their institution's names but also hand wrote multi-billion dollar amounts of "preferred shares" to be issued to the government.
  
• Email documenting that, on the very day of the meeting, the Chief of Staff to the Treasury Secretary and other top Treasury staff did not know the names of any of the banks that would be in attendance.
  
• Email showing Treasury officials wanted to use the Secret Service to help keep the press away from the CEOs arriving at the meeting.
  
• Email showing a public relations effort, run in part out of the Bush White House, to tamp down public concerns about "nationalizing the banks."
  
• Email showing that Paulson was able to brief Barack Obama about the bankers meeting almost immediately, but could not reach Senator John McCain.

Link to CEO Talking Points Document

Link to Signed Documents From Financial Institutions (Wow! look at the chicken scratch)

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