Good Billions after Bad

The Treasury Department’s Cash Room and the C.E.O.’s of the first banks to get bailout money. From left: Kenneth Lewis (Bank of America), John Mack (Morgan Stanley), Vikram Pandit (Citigroup), Ronald Logue (State Street), Lloyd Blankfein (Goldman Sachs), John Thain (Merrill Lynch), Richard Kovacevich (Wells Fargo), Jamie Dimon (J. P. Morgan Chase), and Robert Kelly (Bank of New York Mellon). Photo illustration by Chris Mueller.

As the Bush administration waned, the Treasury shoveled more than a quarter of a trillion dollars in tarp funds into the financial system—without restrictions, accountability, or even common sense. The authors reveal how much of it ended up in the wrong hands, doing the opposite of what was needed.

By Donald L. Barlett and James B. Steele
Vanity Fair
October 2009

Just inside the entrance to the U.S. Treasury, on the other side of a forbidding array of guard stations and scanners that control access to the Greek Revival building, lies one of the most beautiful interior spaces in all of Washington. Ornate bronze doors open inward to a two-story-high chamber. Chandeliers line the coffered ceiling, casting a soft glow on the marble walls and richly inlaid marble floor.

In this room, starting in 1869 and for many decades thereafter, the U.S. government conducted many of its financial transactions. Bags of gold, silver, and paper currency arrived here by horse-drawn vans and were carted upstairs to the vaults. On the busy trading floor, Treasury clerks supplied commercial banks with coins and currency, exchanged old bills for new, cashed checks, redeemed savings bonds, and took in government receipts. In those days, anyone could observe all this activity firsthand—could actually witness the government and the nation’s bankers doing business. The public space where this occurred became known as the Cash Room.

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