Tuesday, December 9, 2008

The hypocrisy of banksters

The governor of the state of Illinois, Rod Blagojevich recently issued a statement in solidarity with the hundreds of workers occupying the factory that was their workplace, until economic problems forced it to shut down.

Governor Blagojevich says, "We, the state of Illinois will suspend any business with Bank of America and we hope this kind of leverage and pressure will encourage Bank of America to do the right thing for this business and take some of that federal money that they received and provide the necessary credit to this company so these workers can keep their jobs."

If it sounds like blackmail, that's because it is, and apparently it's not the first time the governor has attempted to coerce others into doing his will. At least, if the FBI affidavit is accurate:

A 76-page FBI affidavit alleges that Blagojevich was intercepted on court-authorized wiretaps during the last month conspiring to sell or trade Illinois’ U.S. Senate seat vacated by President-elect Barack Obama for financial and other personal benefits for himself and his wife. At various times, in exchange for the Senate appointment, Blagojevich discussed obtaining:

– a substantial salary for himself at a either a non-profit foundation or an organization affiliated with labor unions;

– placing his wife on paid corporate boards where he speculated she might garner as much as $150,000 a year;

– promises of campaign funds – including cash up front; and

– a cabinet post or ambassadorship for himself.

However, the Bank of America is making some of the most ironic statements, given that they were a big recipient of bailout funds.

Bank of America isn’t empowered to tell a company’s management how to manage its business, spokeswoman Julie Westermann said today. Republic is unable to operate profitably in the current economy, she said.

“Bank of America has worked with the company and shared our concerns about the company’s situation and its operations for the past several months,” she said. “It is unfortunate that the company has been unable to reverse its declining circumstances.

Hmmm, who else do you know that is "unable to operate profitably in the current economy", and has unfortunately "been unable to reverse" declining circumstances?????? Could it be automakers, banks, investment firms, etc...?

By the way, Republic Windows & Doors issued this timeline of events which certainly sounds like Bank of America has injected themselves to a substantial degree in the management of the company. The bank apparently rejected the company's request to make vacation payments to its employees, a central issue in the worker's occupation. The timeline reveals that Republic Windows had a buyer for the note, willing to pay about $3 million to Bank of America, which would have been a discount of $1.5 million on the note's value. Bank of America rejected that offer, indicated that they believed the note was "'over' collateralized". In other words, the bank says "fuck off, we don't need the buyer, we can get the full $4.5 million by selling off the business assets". Of course, the bank will need every penny they can get-- as a result of their merger with Merrill Lynch, they're facing writedowns of $5.1 billion in the 4th quarter , and they had $56 billion of "high-risk" assets as of the end of September. Unable to operate profitably indeed.

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