The LuLac Edition #648, Nov. 23rd, 2008
PHOTO INDEX: CONGRESSMAN PAUL KANJORSKI.
KANJORSKI GOES NATIONAL
Congressman Paul E. Kanjorski (PA-11), the Chairman of the House Financial Services Subcommittee on Capital Markets, Insurance, and Government Sponsored Enterprises, played a key role during two crucial House Financial Services Committee hearings this week. Chairman Kanjorski was consistently featured in the national print and broadcast media coverage of these hearings which highlighted his role.
Lawmakers are none too pleased with the way Paulson and his colleagues so far are handling the powers they were granted under the rescue plan. "There's a lack of confidence, it seems to me, both in this body [House Financial Service Committee] and in the general population," said Rep. Paul E. Kanjorski (D-Pa.). "Do we have a plan? Where are we going?"
CNN Money - November 18
Many lawmakers expressed frustration that this part of the bill, which has become known as the Troubled Asset Relief Program, or TARP, appears to have been abandoned.
"We're trying to figure out -- those of us that extended ourselves on the vote for the bail-out -- the 180-degree change that you made in policy," said Rep. Paul Kanjorski, D-Pa. asked Paulson. "Do we have a plan? Where are we going?"
MSNBC – November 18
Paul Kanjorski (D-PA) urged the secretary [Paulson] to be more "forthcoming," and to avoid more "180-degree turnarounds."
NPR: Day to Day with Madeleine Brand – November 18
BRAND: And speaking of changing strategy, a lot of people want some of that money to be used for the auto industry. And what did Paulson say to that?
BRADY: Well, Congressman Paul Kanjorski, he's a Democrat from Pennsylvania, brought the issue up. And he expressed the concerns that we've all heard about by now, you know, the lost jobs, the effects on the larger economy, but Paulson said the same thing he's been saying in recent days. Of course, it would be a horrible thing if the carmakers failed, but bailing out the auto industry, he said, doesn't fit in with the original purpose of the bailout legislation. Paulson said that it was aimed at protecting the financial system and getting banks to resume lending.
New York Times – November 19
The other major point on which Mr. Paulson clashed with the lawmakers was the rescue of the car companies.
Representative Paul E. Kanjorski, Democrat of Pennsylvania, expressed bewilderment that Mr. Paulson would bail out banks but not carmakers.
''Do you consider the loss of an automobile company a systemic risk, or don't you?'' Mr. Kanjorski said.
''I think it would be something to be avoided,'' Mr. Paulson responded.
CNN Money – November 19
But Paul Kanjorski, D-Pa., said he wasn't sure it was proper to be bailing out the automakers and he didn't like the demand that action be taken in this lame duck session of Congress.
"I am not yet convinced that we must act so rashly," he said. "The American public demands that we get this right."
Kanjorski asked GM CEO Rick Wagoner for the minimum amount of money necessary to keep GM afloat through March 30 in order to give Congress more time to work on a bailout package. "When will you run out of money?" he asked.
CNN: CNN Newsroom – November 19
Lawmakers from Michigan are all for a Big Three bailout. They say letting them die on the vine could damage the entire economy. But others aren't so keen to throw Detroit a life preserver
REP. PAUL KANJORSKI (D), PENNSYLVANIA: How many money do you need survive, General Motors, from today until March 30?
RICHARD WAGONER, CEO, GENERAL MOTORS: Congressman, it's going to depend on what happens with suppliers and marketers.
KANJORSKI: I understand that. Give me your worst-case scenario.
WAGONER: Worst-case scenario, the amount of money would be significant. I mean, we have -- we have supplier...
KANJORSKI: What is significant?
WAGONER: Five billion dollars every month.
KANJORSKI: So -- so what you're telling us, that since you anticipate borrowing $15 billion to $18 billion under this authorization, if the market doesn't turn around, and the economy doesn't recover by that time, and I think you have to be a wishful thinker to think it will, by March 30, you're out of money? Is that correct?
WAGONER: The analysis that we've done is based on an assumption that the U.S. market continues at about the current rate, which is a weak level. We don't assume a lot of recovery. We hope it won't get worse. Business Week – November 19
Congressman Paul Kanjorski (D-Pa.) said he would consider voting for some provisional funds to the industry. But he wants to take up to three months, into the next Congress, to debate a more detailed bill that would emphasize accountability, oversight, and conditions. "The American people expect and deserve careful deliberation from this body, rather than a blessing of last-minute expedient deals," said Kanjorski.
CNN: Lou Dobbs Tonight – November 19
DANA BASH, CNN CONGRESSIONAL CORRESPONDENT (voice-over): Auto executives came back to Capitol Hill to make their case one more time for a $25 billion rescue. And lawmakers' steep skepticism gave way to sparring.
REP. PAUL KANJORSKI (D), PENNSYLVANIA: Can just tell me in absolute terms how much money do you need to survive, General Motors, from today until March 30th?
RICHARD WAGONER, GENERAL MOTORS CEO: Congressman, it's going to depend on what happens with suppliers and markets.
KANJORSKI: I understand that. Give me your worst-case scenario?
WAGONER: The worst-case scenario, the amount of money would be significant? I mean we have supplier...
KANJORSKI: What is significant?
WAGONER: (INAUDIBLE) billion dollars every month.
BASH: GM's CEO could not fully answer that question, but he insisted 25 billion will keep them afloat.
This week the Scranton Times reported that a former Lackawanna County official will have new charges filed against him. The former county workers compensation fund administrator already charged with money laundering, conspiracy and related charges has been slammed with 12 more federal charges after an expanded investigation that relied at least partially on information provided by a co-defendant. The new charges against Charles Costanzo, 47, of Dunmore, were filed in federal court in Scranton and have put on hold his trial, scheduled to begin Dec. 1. Prosecutors declined to comment on the indictment filed late Wednesday. Among the charges Mr. Costanzo is now facing are two counts each of money laundering and tax evasion and one count each of wire fraud, insurance fraud, health care fraud.In January, Mr. Costanzo was accused of stealing more than $400,000 in Lackawanna County funds. Now, investigators believe he actually stole almost $650,000 during his tenure as the president and owner of Executive Claims Administration, a company created to oversee the county's workers' compensation fund. Executive Claims entered into two contracts with the county. In the first, which took effect in March 2004, Mr. Costanzo was paid $85,000 to oversee the fund. A second contract took effect in July 2006, and allowed for Mr. Costanzo to be paid $120,000 in 2006 and $132,000 in 2007. That contract also allowed Mr. Costanzo and Executive Claims to be paid 50 percent of the total recovery from excess insurance coverage, which is a policy that pays workers' compensation claims beyond a certain monetary amount. Investigators found that, from May 2004 to August 2007, Lackawanna County wired a total of $3.89 million into an Old Forge Bank account held jointly with Executive Claims. Some of that money was used legitimately. In the original indictment, Mr. Costanzo was accused of moving more than $300,000 in county funds into his personal account at Old Forge Bank,using it to pay personal expenses and to purchase a 2005 Cadillac Escalade for more than $50,000 and to give his mother more than $28,000 over a two-year period. It's nice to get a new car and help your mom but not at taxpayer's expense.