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Here's Unsanitized today: it's about Donna Shalala, Nancy Pelosi's pick for the bailout oversight panel. She didn't want the job, has no real experience for the job, and is massively conflicted in carrying out the job. prospect.org/coronavirus/un…
Shalala has a very large stock portfolio that includes a lot of companies who will be looking for a bailout. Such as (deep breath):
Boeing, Alaska Airlines, Spirit Aerosystems (makes parts for Boeing planes), Chevron, ConocoPhillips, Royal Dutch Shell, Occidental Petroleum...
Paramount, Live Nation, AMC Theaters, Choice Hotels, TripAdvisor, Ralph Lauren, L Brands, Burlington Stores, Five Below, UnitedHealth (was on the board). Also big banks (you know banks and bailouts) JPMorgan Chase, Wells Fargo, Bank of New York Mellon, BBVA Compass, and HSBC.
But two holdings are very troubling. Shalala has direct stock in Moelis, one of three investment banks chosen by Treasury to advise on bailout programs.
She also has at least $202,000 in shares of ETFs with BlackRock iShares. BlackRock has been hired by the Fed to manage its bailout programs. One of those Fed programs will buy ETFs. They could buy Shalala's ETFs.
Is Shalala going to recuse herself from all oversight of companies seeking bailouts, or companies advising on bailouts, in whom she owns holdings?
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David Dayen
@ddayen
And here is today's scoop: USAA bank, one of the nation's largest, is grabbing coronavirus emergency checks. One family, a vet on disability, his wife and 2 kids, lost $3400, and USAA told them "you shouldn't have gotten into debt in the first place"
prospect.org/coronavirus/us…
USAA admitted to me they will reduce these emergency payments, intended for basic necessities during an economic crisis, if the payment is "deposited into an account with a negative balance." prospect.org/coronavirus/us…
The family hadn't accessed the account in over a year; they closed it after fraud was detected on the account. USAA said it wasn't fraud & they owed $8,000.
The IRS had the account on file so they sent the family's payment there. And USAA took it. prospect.org/coronavirus/us…
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David Dayen
@ddayen
So here's my scoop: banks have been given the green light by regulators to take the $1,200 CARES Act payments and use them to offset an individual's existing debts. prospect.org/coronavirus/ba…
I got audio of a webinar between regulators and bank compliance officers. Banks have been asking whether they can use the payments to offset debts. "There's nothing in the law that would preclude that action," Treasury said twice on the call. prospect.org/coronavirus/ba…
This can even happen in the case of a "charged-off" account with a negative balance that a customer abandoned & thought was closed. If direct deposit was set up with the IRS to go to that account, the bank can keep the money & pay off old debt with it. prospect.org/coronavirus/ba…
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David Dayen
@ddayen
Reading the left-wing coverage of the end of the Democratic primary, you wouldn't know that the no-strings bailout of the largest corporations in America happened 3 weeks ago. It doesn't jibe with comforting stories about "winning" the ideological argument.
The left shouldn't kid themselves. Their leaders failed them and no major party wants them involved. The only card they have left to play lies in the monumental social unrest that will accompany the coronavirus Depression.
Lots of people are adrift and angry, while the Dow delivers healthy returns to a small sliver of the public. This will play out with inchoate rage. It's a moment of unlikely possibility. But it depends on where the anger leads.
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