At different times, former Massachusetts Gov. Mitt Romney (R) has both supported and derided the Troubled Asset Relief Program (TARP), better known as the bank bailouts of 2008. Most recently, Romney called it a “slush fund” that “should be shut down.”
Today, however, Romney’s 2012 presidential campaign stopped at Lincoln Financial Group in Concord, New Hampshire, where hundreds of the company’s employees turned out to hear Romney talk about jobs and the economy. Lincoln Financial Group and its parent company, Lincoln National Corporation, took $950 million in TARP funds in 2008.
That’s not the worst of it, though. Originally, Lincoln Financial was eligible for much less in TARP funding because it did not qualify for money marked for thrift savings companies. To become eligible, it bought a small thrift savings company that, on its own, would have received only $350,000 in TARP funding. Because of how TARP funding was calculated, however, Lincoln Financial was eligible for the $950 million it received solely because it added the small thrift savings company. In 2010, the Special Inspector of TARP issued an oversight report about the program in which he detailed the way Lincoln Financial gamed the system to receive more funding:
Hartford and Lincoln were able to obtain CPP funds by buying small thrift savings institutions and becoming thrift/savings and loan holding companies, thereby meeting the technical criteria for receipt of CPP funds. The amount of CPP funds provided, however, was then determined by the assets of the holding company (i.e., the parent insurance company), not just the assets of the much smaller qualifying thrifts. In the case of Lincoln, for example, the company was able to obtain $950 million in TARP funds after it acquired a thrift that, on its own, would have been able to obtain at most $350,000 (if it would have qualified for CPP funding at all). Moreover, in using TARP funds, there was no requirement that TARP funding be used in connection with the subsidiary thrifts’ activities. As it happened, the insurance companies reported that they used little (in the case of Hartford) or no (in the case of Lincoln) TARP funds in connection with the subsidiary thrifts’ activities but rather used the vast bulk of the funds to support their insurance businesses. Stated another way, simply by purchasing comparatively tiny thrifts, Hartford and Lincoln — companies whose primary businesses (unlike other CPP participants) have little to do with lending to consumers and businesses — gained access to more than $4.3 billion in taxpayer funds, an amount that is many multiples of the thrifts’ total assets.
In 2009, Romney told the crowd at the Values Voters Summit that, when the government starts “bailing out banks…we have we have every good reason to be alarmed and to speak our mind.” That apparently wasn’t the case today. According to reports from the event, Romney never mentioned the bailouts even while standing inside of a company that benefited directly from them.