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For Immediate Release |
Contact: William Marshall, Jr. |
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Congresswoman Richardson Calls On Treasury Secretary Paulson For Swift Action for the City of Long Beach |
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WASHINGTON, D.C. — Congresswoman Laura Richardson joined her California delegation colleagues in calling on Secretary Henry Paulson to use his authority to protect the funds of local taxpayers and purchase the troubled assets held by the City of Long Beach. "As I promised, I want to insure that taxpayers are protected and receive a share in the solutions of the “Economic Rescue Plan” that was recently passed in the U.S. Congress. City governments like those within Los Angeles counties are impacted by the brunt of the economic crisis,” Congresswoman Richardson stated. “An investment in the City of Long Beach is an investment in the well-being of the people we serve. Whether its routine city services like trash pick-up and street repairs, or essential city personnel such as police and fire departments, the Treasury Department has a responsibility to protect our cities, our taxpayers and our assets.” The City of Long Beach invested $20 million in Lehman Brothers commercial paper days before Lehman went bankrupt and gave run-a-way company excutives $24 million in severance packages. The loss for the City is estimated at over $25 million. Once considered a low risk investment for municipalities, the City of Long Beach has now moved their investments to the U.S. Treasury, which provides lower yields. The Treasury Secretary has the authority and must act to purchase troubled assets held by local governments under the Troubled Assets Relief Program (TARP). The program, managed by the Treasury’s newly created Office of Financial Stability, became law under the Emergency Economic Stabilization Act of 2008. ### |
