TARP Recipient Ownership Trust Act of 2009

I received the following announcement from Senator Mark Warner today. I may not agree that the economy is beginning to improve, but I do think this is very good policy and I applaud him for proposing it:

October 8, 2009
While there are recent promising signs that our country's economy is beginning to improve, I share the concerns of many Virginians about the federal government's role in assuming significant ownership stakes in several private companies -- namely General Motors, Chrysler, AIG and Citigroup.Taxpayers are understandably worried about how much of their initial investment they can expect to get back.

I believe more immediate action is necessary to enforce some "rules of the road" on the Troubled Asset Relief Program, or TARP, that would more fully protect the taxpayer -- removing any hint of politics from the federal government's temporary ownership stake in these companies -- and provide a clear strategy for selling taxpayer ownership of these companies.That's why I have introduced, along with Sen. Bob Corker, a Republican colleague from Tennessee, the TARP Recipient Ownership Trust Act of 2009. Here is what our bipartisan proposal will do:

If the government owns more than 10 percent of a private company, this ownership stake would be placed in an independent trust supervised by three trustees, appointed by the President, with a responsibility to maximize the return-on-investment for the taxpayers.
These three trustees should be neutral, respected business executives, with recognized records of accomplishment, and with the skills and knowledge to maximize taxpayer returns on our ownership stake.

The trust will have a responsibility to sell these assets by the end of 2011. That should give taxpayers confidence that they will not still own a significant share of stocks in these companies five, 10 or even 20 years from now. This week, I was pleased that the Washington Post editorial board endorsed our proposal, and the Wall Street Journal's Dow Jones Newswire wrote about our efforts to design a responsible strategy for ending our ownership in these companies.This is just one aspect of financial reform we must tackle – and sooner rather than later. Other critical issues include taking steps to prevent any institution from becoming “too big to fail,” putting our entire system at risk -- updating our disjointed system of bank regulation -- and consideration of improved consumer protection tools. I can assure you that we will continue to work in a responsible and bipartisan way to address these challenges.

Regards,

Mark Warner