Making Government Transparent and Accountable
The Sunlight Foundation uses cutting-edge technology and ideas to make government transparent and accountable. Underlying all of our efforts is a fundamental belief that increased transparency will improve the public's confidence in government
The Sunlight Foundation Blog
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Dodd, Shelby Call on Release of Counterparty Names
Following calls from their fellow senators, Banking Committee Chair Chris Dodd and Ranking Member Richard Shelby slammed the Federal Reserve for refusing to release the names of the counterparties to the A.I.G. bailout. The counterparties are the ones who are actually receiving the majority of the bailout money.
During a committee hearing this morning on A.I.G.’s problems, Dodd stated clearly that “it is not clear who we are rescuing.” The counterparties were not “innocent victims” and the public “has a right to know” who is receiving the bailout funds sent through A.I.G.
When questioned, Federal Reserve Vice Chairman Donald Kohn refused to release the names of the counterparties because it could “make companies less likely to do business with anyone receiving government funds, risking further turmoil at AIG and in financial markets more broadly.”
Dodd and Shelby both laid into Kohn, telling him his statement was “not adequate” and “very disturbing.” Shelby further stated, “People want to know what you’ve done with this money.”
You can watch the full committee hearing here.
UPDATE: Should also point out this moment from Sen. Jim Bunning:
“You are telling us,” he said sternly to Mr. Kohn, “that the counterparties that got par for their bonds or for whatever — the American taxpayer shouldn’t know who they are? And then you may come back to us and ask for more money for more banks and more corporations? You will get the biggest ‘no’ you ever got.”
He added that he would do everything in his power to “stop you from wasting the taxpayers’ money on a lost cause.”
A.I.G. counterparty transparency is quickly becoming a bipartisan populist issue. Who will drop a bill to force the disclosure?
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Bunning Foundation May Skirt Ethics Rules
According to the Lexington Herald-Leader, Sen. Jim Bunning has collected $180,000 from the Jim Bunning Foundation since 1996 for doing one hour of word per week ($384/hr). Meanwhile, the Foundation has given only $136,435 to charities. A board member of the Foundation, Rick Robinson, states that Bunning created the Foundation due to restrictions placed on outside earned income under Senate ethics rules.
In an interview Wednesday, Robinson said Bunning created the foundation so he could collect money from his baseball memorabilia autographs without violating current Senate limits on outside income.
Senators are discouraged from making much money outside of their $169,300 Senate salaries. But they are allowed to establish charitable foundations, which can accept the honoraria and other income they once were permitted to take personally.
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“Quite simply, 1996 was the year that Jim Bunning was inducted into the [Baseball] Hall of Fame,” Robinson said. “Suddenly there was an opportunity for Jim to go to card shows because of his new status as a member of the Hall of Fame. That’s a big thing.”
There are many possible problems involved in Bunning’s foundation, including possible ethics violations and conflicts of interest. Let’s run down the issues:
- The Foundation’s records are handled by the previously mentioned Robinson, a Washington lobbyist. Robinson, a former Bunning aide, represents two clients, Sanitation District No. 1 of Northern Kentucky and HealthPoint Family Care Inc., to which Bunning has earmarked funds.
- The obvious issue is that Bunning takes in more money himself than the Foundation gives away to charity. Bunning’s $20,000 a year salary makes up 36% of the Foundation’s operating budget, as compared to the 27% going to charity. Experts questioned in the Herald-Leader article agree that this is backwards. The rest of the money appears to go into a mutual fund. What happens to the mutual fund when Bunning leaves Congress? Upon leaving Congress, Bunning will be free of the ethics rules limiting his ability to earn certain types of income, so the Foundation could be dissolved. How much of the mutual fund will go to Bunning and how much to charity? Does the mutual fund act as a tax shelter for Bunning’s retirement?
- The Foundation board is not independent of the Senator at all. The three board members include the lobbyist Robinson, Bunning’s wife, and a close Bunning friend. This violates most standard protocols for charitable foundations.
Some of the Jim Bunning Foundation’s 990 forms are available here.
