13 TARP recipients owe $220M-plus in back taxes

Thirteen recipients of bailout funds from the Troubled Asset Relief Program owe more than $220 million in unpaid federal taxes, Rep. John Lewis, D-Ga., said today at a hearing held by the House Ways and Means Committee Subcommittee on Oversight. More than $300 billion has been given to companies under TARP, the 2008 program set up to buy troubled assets and equity in financial institutions damaged by the subprime mortgage crisis, said Mr. Lewis, who chairs the committee. There are plans to provide billions of dollars more to shore up ailing institutions. Banks and other institutions were required to sign a contract stating they had no unpaid federal taxes, Mr. Lewis said. The Treasury Department relied on the statements, he said, when they invested the money in the institutions. “Taxpayers have no sense that there is any control over this money,” Mr. Lewis said in a statement. “They have no idea what, if anything, they will get in return. This entire program is based on trust — trust in the givers and trust in the takers. At this point there is no trust.” The subcommittee investigated 23 TARP recipients and found that 13 of them owed more than $220 million in federal taxes, Mr. Lewis said, adding that two companies owe more than $100 million each. “How can this be?” Mr. Lewis said. “If we looked at all 470 recipients, how much would they owe? Are they signing contracts knowing that they owe taxes, but thinking they will not get caught?” He suggested Bush administration Treasury Secretary Henry Paulson may have turned a “blind eye” to what was going on. “This is shameful,” Mr. Lewis said. “It is a disgrace. The American people are fed up, they are fired up, and they’re not going to take it anymore. As members of Congress, we shouldn’t take it anymore either.” Mr. Lewis did not reveal the names of the companies owing back taxes. “We can’t reveal those names,” said Brenda Jones, Mr. Lewis’ spokeswoman. “There are some limitations about what we can reveal.”