Treasury pressed banks to take bailout
Legal watchdog group has obtained documents which seem to indicate banks had no choice but to take TARP funds.
NEW YORK (CNN) -- Newly released documents highlight the urgency last fall at the Treasury Department for the CEOs of nine major banks to accept billions of taxpayer dollars as the government worked to rescue the nation's banking system.
The documents, which were obtained by the conservative legal watchdog group Judicial Watch through the Freedom of Information Act (FOIA), were released Wednesday.
They seem to indicate the banks were given no choice but to take the money.
According to a document marked "CEO Talking Points" prepared for then-Treasury Secretary Henry Paulson, "if a capital infusion is not appealing, you should be aware your regulator will require it in any circumstance ..." and warned, "We don't believe it's tenable to opt out because doing so would leave you vulnerable and exposed."
The talking points also showed how the department would announce the move, and how it would characterize the banks' participation.
"We plan to announce the program tomorrow and that your nine firms will be the initial participants. We will state clearly that you are healthy institutions, participating in order to support the U.S. economy," the documents said.
The Treasury Department had no comment.
The crisis talks between the bank CEOs and the Treasury Department were widely reported last fall, but these documents reveal the minute-by-minute drama behind the scenes as the government pressured the banks to take the bailout money.
The Treasury Department gave the CEOs a one-page form containing four bullet points. Written in by hand on each form was the name of the bank and amount of money the bank would take from taxpayers.
In exchange, the banks agreed in writing to "expand the flow of credit to U.S. consumers and businesses."
E-mail communications among Bush administration officials reveal the concern at Treasury when they spotted the cameras staking out the entrance of the department as the CEOs arrived, and their attempts to keep the CEOs moving quickly into the building and away from the cameras.