Thursday, April 2, 2009

Academy Blog Beats the Big Media Timing

This blog was the first to report yesterday that Fox News' Senior Legal Analyst Judge Andrew Napolitano said that extortion was committed on many American banks by the Bush Administration. The story was being typed as the Judge was speaking, and published to the internet within minutes.

Wednesday, on Fox's Studio B with Shepard Smith, Napolitano said that banks that did not need the bail-out money, did not want the bail out money, and tried to refuse, were specifically told by the FDIC and the Treasury that if those banks did not take the money they would be subjected to expensive and lengthy audits which the banks themselves would have to pay for.

Napolitano said that Monday night he met with an official of one of those banks who explained how the process had gone down. This official is reported to have told the government to go ahead with the audit because his bank was "clean" as far as its book were concerned. That is when the official was told his bank would have to pay for the audit, and his employees would have to give their time, paid for by the bank, to assist with the audit.

The Business and Media Institute said three hours later that "the method the Treasury Department employed to get banks to go along with the TARP bailout breached legal boundaries to the point of 'extortion,' according to Fox News Senior Judicial Analyst Andrew Napolitano, a former Superior Court Judge for the state of New Jersey.

The Judge defined extortion as " a threat to perform a lawful act to affect some ones free will."

"This person runs a bank that’s worth about $250 billion, it has no subprime loans, it has no bad debts, wasn’t involved in credit default swaps," Napolitano said. "It didn’t need any money. It didn’t ask for the money and didn’t want it. The FDIC with Treasury backing - officials from both the Federal Deposit Insurance Corporation and the Treasury said if you don’t take this money, we will conduct a multi-year public audit of you."

In addition, those banks which were unduly forced to take the money now owe 5% interest on those government "loans". Some banks cut investor dividends at the end of their business cycles in order to pay for the interest owed.

In related news, "Signature Bank of New York said on Tuesday that it had repaid $120 million to the Treasury Department. Old National Bancorp of Indiana returned $100 million, Iberiabank of Louisiana paid back $90 million, and Bank of Marin Bancorp of Novato, Calif., repaid $28 million. All of the banks paid 5 percent interest on the money they had received.
"New restrictions on
executive compensation and dividend payouts made such aid less palatable to bank managers." New York Times

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