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.
Last 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.
Mark Warner represents Virginia in the United States Senate.
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