Is it a quid pro quo?

General Electric, the world's largest industrial company, has quietly become the biggest beneficiary of one of the government's key rescue programs for banks.

At the same time, GE has avoided many of the restrictions facing other financial giants getting help from the government.

The company did not initially qualify for the program, under which the government sought to unfreeze credit markets by guaranteeing debt sold by banking firms. But regulators soon loosened the eligibility requirements, in part because of behind-the-scenes appeals from GE.

As a result, GE has joined major banks collectively saving billions of dollars by raising money for their operations at lower interest rates. Public records show that GE Capital, the company's massive financing arm, has issued nearly a quarter of the $340 billion in debt backed by the program, which is known as the Temporary Liquidity Guarantee Program, or TLGP. The government's actions have been "powerful and helpful" to the company, GE chief executive Jeffrey Immelt acknowledged in December.

Unlike other major lenders participating in the debt guarantee program, including Bank of America, Citigroup and J.P. Morgan Chase, GE has never been subject to the Fed's stress tests or its rules for limiting risk. Also unlike firms that have received bailout money in the Troubled Assets Relief Program, or TARP, GE is not subject to restrictions such as limits on executive compensation.

So let's look at this. The federal government has ordered pay cuts for the highest paid employees of companies that received bailout funds. Somehow, though, a large recipient of bailout funds has escaped these pay cuts. And interestingly enough, the company in question owns a major cable "news" outlet that has been a source of exceedingly friendly and fawning coverage to the Obama Administration -- and among those top-salaried employees would be some of the journalists and commentators most deferential to the administration and critical of its opponents. Is the failure to restrict the salaries of these employees an attempt to buy continued favorable coverage? Seems to me that the appearance of impropriety is reason enough for an investigation by an independent prosecutor with full subpoena power.

H/T JammieWearingFool

Posted by: Greg at 12:55 PM | Comments (2) | Add Comment
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