Morgan Stanley Is One Bank That Cites a Loan From TARP Money
Several banks refuse to account for billions in public funds.
Dec. 17, 2008— -- Banks that were rescued with billions of dollars in public funds have, in most cases, refused to provide specifics about how they have used or intend to use the money.
ABC News asked 16 of the banks that have received money from the Treasury Department's $700 billion Trouble Asset Relief Program the same two questions: How has your financial institution used the money, and how much has your financial institution allocated to bonuses and incentives this year?
To read the banks' responses, click here.
Goldman Sachs reported Tuesday that it paid $10.93 billion in compensation for the year, which includes salaries and bonuses, payroll taxes and benefits. That is down 46 percent from a year ago. Goldman Sachs received $10 billion from the Treasury.
Is Your Adjustable-Rate Mortgage About to Reset? Tell ABC News
"Bonuses across Goldman Sachs will be down significantly this year," a bank representative told ABC News. The spokesman refused to disclose the size of the bonus pool or how much of the compensation fund of $10.93 billion was planned for bonuses.
"We do not break down the components of compensation; however, most of that number was not bonuses," he said. Goldman Sachs added, "TARP money is not being paid to employee compensation. It's been and will continue to be used to facilitate client activity in the capital markets."
Goldman Sachs has pointed out that seven of its senior executives were forgoing bonuses this year. The company also reported Tuesday that it lost $2.1 billion in the last quarter.
"It looks like Goldman Sachs is treating this as business as usual," said compensation expert James Reda. "They are taking our taxpayer money. They should be able to account for that money.
"What's missing from this report is the exact amount of bonuses that were paid," said Reda. He later added, "They're hiding the ball."
Fred Cannon, chief equity strategist with Keefe Bruyette and & Woods, an investment bank that specializes exclusively in financial services, said, "It is difficult to say what the TARP funds are directly used for. In terms of compensation, while TARP funds may not directly pay for compensation, the funds do provide additional overall cash to the companies."
When pressed for what the TARP money was being used for, Goldman Sachs replied that it is spent to "facilitate client activity in the capital markets."
