Conflicted Sununu: The Real Problem Is That CEO Pay Limits Are Too Tough

Zachary Roth | April 8, 2009, 3:00PM

Yesterday, the panel overseeing bailout spending on behalf of Congress issued its latest hard-hitting report, which criticized the Treasury Department's approach to the program and called for top execs at major banks to be fired.

But perhaps the most interesting thing about the report is the "alternative view" that accompanied it, from Republican panel member John Sununu.

PERMALINK | COMMENTS (2) | RECOMMEND RECOMMEND (5)
Topics: Bailout, Financial Crisis, John Sununu, Treasury Department, Wall Street

John Sununu

Have Oversight Panelists Complained About Sununu's Conflict? Sounds Like It...

Zachary Roth | March 27, 2009, 5:21PM

Remember that little conflict of interest problem for John Sununu that we revealed last month?

The former New Hampshire GOP senator, who sits on the Congressional Oversight Panel that monitors the TARP funds, was recently named to the board of a firm that's a subsidiary of Bank of New York Mellon -- which not only got TARP money itself, but also administers the program for the Treasury Department.

Sununu insisted to the Associated Press, which picked up on our report, that this really wasn't a conflict. But it looks like at least some of Sununu's fellow panel members disagree.

PERMALINK | COMMENTS (2) | RECOMMEND RECOMMEND (10)
Topics: Bailout, Elizabeth Warren, Financial Crisis, John Sununu, Wall Street

John Sununu

Sununu: New Board Membership Doesn't Conflict With TARP Oversight Work

Zachary Roth | March 3, 2009, 10:51AM

John Sununu has denied the charge that he has a conflict of interest in regard to his work on the Congressional Oversight Panel for the TARP funds.

Over the weekend, we reported that the former New Hampshire GOP senator has joined the board of a firm that's an affiliate of Bank of New York Mellon -- which, in addition to receiving bailout funds itself, has contracted with the Treasury Department to help administer the program.

Yesterday, the Associated Press picked up the story, and got a response out of Sununu.

"ConvergEx Group is an independent company," Sununu said in an e-mail Monday. "It is not eligible to apply for or receive funds through any programs established under TARP." He pointed out that the bank "holds a minority position only" with ConvergEx.

That's a 33.8 percent stake to be exact, the AP reports. Not enough for Bank of New York to control ConvergeEx, but perhaps enough so that ConvergeEx's interests are at least somewhat affected by the TARP program.

Separately, a spokeswoman for the COP told TPMmuckraker that the panel has not yet formally addressed the issue, since it not met since Sununu's appointment to ConvergeEx's board was announced last week. We'll keep you posted if and when it does.

PERMALINK | COMMENTS (5) | RECOMMEND RECOMMEND (8)
Topics: Bailout, John Sununu, Treasury Department, Wall Street

John Sununu

Sununu Sits On TARP Oversight Panel, And On Board Of Firm Owned By Bank That Administers TARP

Zachary Roth | February 28, 2009, 12:00PM

John Sununu, who serves on the Congressional Oversight Panel monitoring the government's bailout program, has joined the board of a subsidiary to Bank of New York Mellon -- a firm that, in addition to receiving bailout funds, has been hired by the Treasury Department to administer the program.

Given that the Congressional Oversight Panel (COP) is charged broadly with assessing how the TARP program is working, in order to help Congress determine whether to continue injecting capital into the financial sector, the arrangement would appear to create a significant conflict of interest for the former New Hampshire GOP senator.

On Wednesday, the investment firm BNY ConvergEx Group announced that Sununu had joined its board of governors. "His experience as a thoughtful leader and champion of innovation makes him an ideal match for ConvergEx's entrepreneurial spirit," said company chairman Joseph Velli of Sununu.

According to its press release, the company is an affiliate of Bank of New York Mellon (BONY). Founded by Alexander Hamilton in 1784, BONY received $3 billion in TARP funds back in October -- less than some Wall Street firms, but not chump change.

Just as significantly, it was also picked to be the master custodian for the bailout funds. According to reports, that means it's charged with handling accounting and record-keeping for the program, and even with tracking limits on executive pay at banks that got TARP money.

Sununu was appointed to the COP by GOP Senate leader Mitch McConnell in December -- a little over a month after he was defeated by Democrat Jeanne Shaheen in his bid for reelection to the Senate.

Sununu's conflict, then, appears clear. As a member of the COP, he's in part responsible for evaluating whether taxpayers got a good deal through TARP, and for assessing whether Treasury and the banks are doing enough to track the bailout money, as well as whether banks are using the money to make loans, as they were supposed to. On the broadest level, COP's job is to help Congress figure out whether the TARP program is working as it should, and how to adjust it going forward. It's not hard to see how that responsibility could conflict with his activities as a member of the board of a company that both administers the TARP program, has received funds from it, and could potentially be in line for more.

In his work on the panel so far, Sununu has hardly been an advocate for taking a hard line on the banks. Earlier this month, the COP, which is chaired by Harvard Law professor Elizabeth Warren, released a report detailing the kinds of far-reaching reforms to bolster the financial regulatory system that the crisis has pointed up the need for. But Sununu and the panel's other Republican, Rep. Jeb Hensarling didn't sign on. Instead, they attached their own alternative report, that recommended an approach to financial regulation that was more friendly to Wall Street, and emphasized the need to rein in Fannie Mae and Freddie Mac, the government-backed mortgage firms.

No one answered a listed number for Sen. John E. Sununu in Portsmouth, New Hampshire.

We've also contacted COP to ask whether Sununu discussed his ties to Bank of New York Mellon with panel staff. And we're hearing there's more to this story ... so we'll keep you posted.