Paulson gave banks no choice on government stakes: memos

Not surprising, but still terrifying:

WASHINGTON (Reuters) - Documents made public on Wednesday confirm former U.S. Treasury Secretary Henry Paulson gave nine major banks no choice but to allow the government to take equity stakes in them as the Bush administration moved to address turmoil in the financial industry.

The documents, obtained by the public interest group Judicial Watch under a Freedom of Information Act request, include "talking points" used by Paulson at the October 13, 2008, meeting with the banks' CEOs in Washington.

The details of the meeting had been widely reported at the time, but the documents offer a first-hand account of what transpired behind closed-doors.

and:

"These documents show our government exercising unrestrained power over the private sector," Judicial Watch president Tom Fitton said in a statement.

The CEOs present were Vikram Pandit of Citigroup, Dimon of JP Morgan, Richard Kovacevich of Wells Fargo, John Thain of Merrill Lynch, John Mack of Morgan Stanley, Lloyd Blankfein of Goldman Sachs, Robert Kelly of Bank of New York Mellon Corp, and Ronald Logue of State Street Bank.

The documents include an email showing a public relations effort, run in part out of the Bush White House, to tamp down public concerns about nationalizing the banks, Judicial Watch said.

The Fed, the Treasury Department and the FDIC called the bank rescue "necessary to strengthen the financial system and protect U.S. taxpayers and the U.S. economy."

A Reuters article

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