DORGAN BILL TO ESTABLISH OVERSIGHT, ACCOUNTABILITY AND TRANSPARENCY IN FINANCIAL MARKETS

Friday, January 9, 2009

CONTACT: Justin Kitsch
or  Brenden Timpe
PHONE: 202-224-2551

(WASHINGTON, D.C.) – U.S. Senator Byron Dorgan (D-N.D.) introduced financial reform legislation today that would protect taxpayers, boost consumer confidence, strengthen the economy, and restore accountability to the nation’s broken financial system.

Dorgan’s legislation, called the “Taxpayer Protection Act,” requires that all private entities receiving federal bailout funds be subjected to the same set of rigorous oversight rules. It also sets strict conditions on all those who receive bailout funds, including cracking down on lavish executive payments, establishes a national task force to prosecute financial fraud that contributed to the financial collapse, and creates a commission to investigate what caused the economic collapse.

Dorgan said that with more than $8.5 trillion in taxpayers’ money having been put at risk, mostly to bail out Wall Street from its reckless lending and investment decisions, it is time for common-sense taxpayer protections and needed reforms.

“With an economic crisis of this size, it makes no sense to have what is now a scattershot approach to providing oversight, accountability, and transparency in our markets,” said Dorgan, who opposed the $700 billion financial bailout. “This legislation will make every private entity receiving bailout funds subject to the same oversight standards. It will prohibit taxpayer funds from supporting lavish executive perks. And, it will allow for the prosecution of those who contributed to this downfall by committing financial fraud.”

Dorgan’s legislation would:

• Expand oversight, accountability and transparency. While one part of the bailout of the financial industry, the $700 billion Troubled Asset Relief Program (TARP), contains some important provisions related to oversight, accountability, and transparency, none of them are applicable to the other $7.8 trillion in taxpayer funds that have been given out or pledged during this financial crisis. Dorgan’s legislation would require all government agencies providing financial assistance to private firms to follow the same set of rules, including monthly reports to Congress detailing how the taxpayers’ money is being spent.

• Require all firms receiving emergency financial assistance to be subject to the same conditions as the recent automotive rescue initiative. Dorgan’s legislation would require any private company that receives government assistance during the financial crisis to prohibit executive bonuses or golden parachutes for top executives, prohibit the payment of dividends, and make reforms so that they cannot engage in the reckless actions that caused this crisis. If these conditions are not followed, then companies would have to immediately pay back all loans and government assistance.

• Create a Taxpayer Protection Prosecution Task Force. The financial crisis has cost taxpayers trillions of dollars. Any person, company or entity that has benefited from financial wrongdoing must be investigated and prosecuted to the full extent of the law. The legislation would require the Attorney General to immediately establish this task force to prosecute and recoup money from financial fraud cases that contributed to the collapse of the financial markets.

• Establish a Financial Market Investigation and Reform Commission. Modeled after the 9/11 Commission, this commission will examine how the financial collapse and credit crisis happened, and report back to Congress with recommendations on how a crisis of this magnitude can be prevented in the future.

“We still have a long way to go to shore up our economy. As the new Congress and new administration work to clean up this financial mess, we cannot keep handing out taxpayers’ money to the same firms that caused this crisis, without the tough protections established in my legislation,” said Dorgan. “Before the second half of the $700 billion financial bailout is released, we must have these strong taxpayer protections in place.”

 

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