Friday, October 22, 2010

PPIP's Dark Knights: BlackRock, Wilbur Ross & Bob Johnson

Three of the eight private funds in Treasury's Legacy Securities Public-Private Investment Program have interesting histories. 

Blackrock had nearly $2.1 billion in Treasury investment as of April 2010.  The partnership began 10-2-09.  Three months later Blackrock defaulted on $3 billion in government backed loans through Fannie Mae and Freddie Mac.  Treasury Chief Tim Geithner never mentioned this fact in his Congressional testimony.  I'm sure it's not in Treasury's report highlighting 36% PPIP returns  Will Blackrock make enough back for Uncle Sam to cover their mortgage dump on taxpayers?

Wilbur Ross' Invesco got $2.5 billion in public money for their PPIP partnership, which started 9-30-09.  Ross' banking investments received over $5.7 billion in FDIC subsidies.  Apparently, owning a coal mine which killed 12 people is not a barrier to government partnership.  Ross keeps on buying banks, domestically and abroad, frequently partnering with The Carlyle Group.

Robert L. (Bob) Johnson is a joint venture partner with The Carlyle Group.  Once President Bush's favorite community banker/billionaire, Johnson has Blue connections as well.  RLJ Western Assets has $1.8 billion in public financing.  RLJ's website has a picture of the White House.  Should he add the U.S. Treasury?

Blackrock, Wilbur Ross and Bob Johnson know the government gives and gives and gives.  They're happy to take.