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The leaders of the Senate Finance Committee on Wednesday asked for details on the taxpayer-backed sale of investment firm Bear Stearns to JPMorgan Chase. In a joint letter, committee Chairman Max Baucus (D-Mont.) and ranking Republican Chuck Grassley (R-Iowa) asked the key players in the deal for information about the negotiations and the final agreement. Specifically, the senators want a “memorandum on the transaction detailing all steps taken to date and steps that remain to be taken,” a list of all of the parties and their negotiators involved, and “copies of all documents that have been or that the parties intend to file with the U.S. Securities and Exchange Commission or any other regulatory body and any term sheets that relate to the transaction.” The letter was sent to the CEOs of the two companies, as well as to Federal Reserve Chairman Ben Bernanke, Treasury Secretary Henry Paulson and Timothy F. Geithner, the president and CEO of the Federal Reserve Bank of New York. “Americans are being asked to back a brand-new kind of transaction, to the tune of tens of billions of dollars. With jurisdiction over federal debt, it’s the Finance Committee’s responsibility to pin down just how the government decided to front $30 billion in taxpayer dollars for the Bear Stearns deal, and to monitor the changing terms of the sale,” Baucus said. “Economic times are tight on Main Street as well as on Wall Street, and we have a responsibility to all taxpayers to review the details of this deal.” Former Rep. Christopher Cox (R-Calif.), the SEC chairman, was also sent a copy of the letter. “Separate from the question of what was needed, or not, to avoid a market panic in the Bear Stearns case are the implications of the deal for the taxpayers,” Grassley said. “Congress has a responsibility to look at whether the taxpayers will lose money here, what kind of precedent this sets for federal involvement when other firms over-extend themselves, how this will affect the marketplace in other direct and indirect ways, and whether top executives will come out better than the rank-and-file workers who weren’t in the room negotiating the deal.” |
