Treasury Secretary Tim Geithner is directly to blame for taxpayers' loss of $2.3 billion in the CIT bailout, says professor William Black of the University of Missouri-Kansas City School of Law and a former federal bank regulator.
“We put ourselves on the hook in a completely inept way where we lose first. We lose entirely as the taxpayers.”
Black specifically faults Geithner for negotiating an arrangement in which CIT can repay its senior creditors 70 cents on the dollar in bankruptcy, but taxpayers are completely left out in the cold for their investment.
When Geithner pumped taxpayers' money into CIT this summer, “it's like he burned billions of dollars again in government money, our money, gratuitously,” Black said.