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banks

Bailed Out Banks Still Shipping Jobs Overseas

by Erika Yost on April 28, 2009

jobs 220x300 Bailed Out Banks Still Shipping Jobs OverseasU.S. unemployment rates are closing in on 10%. U.S. banks have received billions in bailout funds. Jobs at these banks are still being sent overseas…huh? Is it just me, or does it seem like keeping jobs in the U.S. should be a requirement for getting bailed out? The following piece by John Aidan Byrne appeared in yesterday’s New York Post.

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US banks that have taken billions of dollars in taxpayer bailouts are still shipping thousands of jobs overseas.

Earlier this month, Bank of New York Mellon, which received $3 billion in TARP funds, opened its third call center in Pune, India, where it now employs 1,300 people.

Doug Brown, who wrote “The Black Book of Outsourcing,” said Bank of America, with $52.5 billion of TARP funds in the kitty, has expanded its India-based payroll to 5 percent of its 301,000 employees in 2009, about 15,000 people.

The moves, which have outraged unions, are 100 percent legal. Congress didn’t put into the TARP law any restrictions on shipping jobs overseas.

Citigroup, which got $50 billion in TARP funds plus $300 billion in government guarantees, plowed ahead with a program last fall to add as many as 1,000 call-center employees in the Philippines — weeks after it got its first round of taxpayer relief.

Representatives for Citigroup and Bank of New York Mellon declined to comment on their outsourcing arrangements. A Bank of America spokesman said the firm has not announced any facility openings outside the US since last year.

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POP QUIZ: Corruption in Congress

by John Richardson on February 11, 2009

Wall Street’s Investments on Capitol Hill

Pop QuizIt’s Wednesday. Time for a pop quiz.

I know, most of you are already whining like school children but trust me, when you read these few questions, your should be forthcoming.

Let’s get started. Shall we?

  1. Can Congressional representatives properly oversee the bailout of the financial sector when they get hundreds of thousands of dollars from the banks receiving hundreds of billions in public support?
  2. Is it a potential conflict of interest for members of Congress to own stock in the companies that they are overseeing?
  3. Is disclosure of political contributions by bank to Congressmen and Senators sufficient when hundreds of billions of taxpayer money are involved?

Okay, time is up. Put down your pencils.

If you think this is an academic exercise, you are wrong. These are questions that every American should consider since these are real problems in Congress today.

Yesterday, the Center for Responsive Politics posted an interesting story on their Open Eye blog about the contributions received by member of Congress from the banking industry. Their findings were shocking. Here is an excerpt from the story:

The eight CEOs testifying Wednesday before the House Financial Services Committee about how their companies are using billions of dollars in bailout funds may find that the hot seat is merely lukewarm. Nearly every member of the committee received contributions associated with these financial institutions during the 2008 election cycle, for a total of $1.8 million. And 18 of the lawmakers have their own personal funds invested in the companies.

All of the companies represented at the hearing have received millions, even billions, from the government’s Troubled Assets Relief Program (TARP), including Goldman Sachs, JPMorgan Chase, Bank of New York Mellon, Bank of America, State Street Corporation, Morgan Stanley, Citigroup and Wells Fargo. These companies’ PACs and employees gave $10.6 million to all members of the 111th Congress in the 2008 election cycle, with 61 percent of that going to Democrats.

It was noted in the piece that68 Congressional representatives sitting on the finance committee overseeing the TARP program received approximately $1,848,803 in contributions from the financial services industry.

As we have noted in previous posts at Global Investment Watch, political contributions by financial service companies and corporations as a whole are not a new phenomena. As companies and regulators develop better risk models for doing business, we must reconsider the political risks associated with their business activities. As the core of this political risk assessment is how Congress receives money from the very businesses they oversee. It’s not just about disclosure and transparency. Being honest about the disclosures is only the first step.

At the end of the day, preventing this sort of sanctioned corruption must be stopped. What do you think?

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