25 PREGUNTAS DE LOS ACCIONISTA DE WAMU PARA EL CONGRESO USA
25 Questions Washington Mutual Inc Investors Would like Congress to Address
18 months after the seizure and sale of Washington Mutual, investors have still seen no proof of justification for the seizure of the bank. The OTS claimed it was a liquidity crisis that caused the bank to fail. However, an independent investigation by Kirsten Grind of the Puget Sound Business Journal and Portfolio.com backed up what Washington Mutual Investors already knew, there was never a liquidity crisis. The bank was solvent and had somewhere between $29 and $50 billion of liquidity at their disposal.
Due to a complete lack of transparency between the FDIC, OTS and the general public, including Freedom of Information Act requests being answered with fully redacted documents that appear to be hiding the REAL reason(s) the bank was seized, the shareholders of Washington Mutual Inc have had to rely solely on their own due diligence to put the pieces together as they've tried to understand what really happened.
This morning I asked Washington Mutual Inc shareholders to share with the rest of the world what they would like to see addressed in the upcoming congressional sub-committee hearings.
The following are 25 of their questions and concerns as they relate to Washington Mutual, the FDIC, The OTS, JP Morgan Chase, and other government officials.
1) When did FDIC and JPMC first contact one another about WaMu?
2) Did JPMC Contact the FDIC or did the FDIC contact JPMC?
3) We know it happened as early as March 08 but at what point did JPMC begin lobbying the FDIC to seize WaMu?
4) Did your investigation happen to uncover any of the now infamous details of JPMC's advanced plan to dupe the government into seizing WaMu and selling it to JPMC based upon the premise that Chase could get the government involved in giving them a sweetheart deal so long as the shareholders were wiped out? In other words, did your investigation turn up anything relevant to JPMC's "Project West"?
5) What information about Washington Mutual did the FDIC offer JPMC?
6) As per the FDI Act, did the FDIC convey similar information to ALL other potential WMB suitors at the same time they provided it to JPMC?
7) How significant was JPMC's role in in shaping the FDIC's decision to pressure the OTS to seize Washington Mutual?
8) What information did JPMC give the FDIC regarding the financial health of WaMu?
9) JPM claims they were watching deposits fly out of WMB from "a war room" at JPMC. Were other banks granted unfettered access to the inner most workings of Washington Mutual before the bank was seized or was JPMC granted special FDI Act breaching privileges do to their connections in Washington.
10) Why was WaMu seized on a Thursday when we all know banks are historically seized on Fridays?
11) Who at the FDIC leaked information of the seizure to CNBC?
12) Why did the SEC refuse to protect WaMu by adding it to the 2008 Financial Institution No Short Sale list?
13) When Killinger called Paulson to ask him to use his influence to have WaMu added to the No Short Sell list, why did Paulson refuse and simply say "You should have sold to JPMorgan Chase in the spring, and you should do so now. Things could get a lot more difficult for you?"
14) Why was Wamu seized when it had ample cash to weather additional bank runs, and while the passage of TARP was obviously looming?
15) The FDI Act section 13(E) requires the FDIC to get fair market value for the assets they sell The FDIC's Purchase and Assumption Agreement with JP Morgan specified that section 3.1a listed all of the assets sold to JPMC. Why doesn't a section 3.1a exist? Furthermore, why does page one of the FDIC's "closing book" on Washington Mutual show that the FDIC was offering to sell assets, even if they didn't belong to the bank, in other words, even assets of the holding company which the FDIC has no power to seize or sell. Without an itemized list of assets sold to JPMC, how does the FDIC even know which assets they sold, let alone if they received a fair price for them and how do we as investors know the FDIC didn't sell JPMC assets of the holding company?
16) The FDIC sold IndyMac's 33-branch, $6.5B deposit institution for $13.9B. In comparison, the FDIC sold WaMu's 2200 branches and $300 billion in assets, $188 billion in deposits to JPMC for only $1.9 billion. Are we supposed to believe that the FDIC acted within the constrains of the FDI Act and that they maximized the asset value of WMB or should we just assume that due to their incompetence and insistence on a "whole bank transaction" in accordance to a pre-arranged sweetheart deal with JPMC, that we were effectively "robbed"?
17) Was WaMu given specific instructions to remedy itself? And if so, were those instructions followed?
18) WaMu was in the process of moving billions of dollars from the subsidiary FSB bank into WMB when it was seized. Internal documents released through the bankruptcy proceedings show this was called "Project Fillmore" and we know that FSB had 20 billion in cash on hand. So why did the OTS seize WaMu before it could re-capitalize via the transfer if the OTS had signed off on this deal as part of their Memorandum of Understanding with the bank?
19) Why did the FDIC include this $20+ billion in cash in the sale to JPMC, along with $300 billion in assets for only $1.9 billion?
20) Wouldn't it have made sense for the FDIC to use this $20+ billion to pay the bank and holding company bondholders and shareholders instead of gifting the money to JPMC and wiping everyone else out?
21) The OTS claimed WaMu was seized because of a "liquidity crisis" due to bank runs, even though WaMu had adequate (actually above average) liquidity at the time it was seized. Please disclose the ratios of the top 10 banks/investment firms/commercial banks and thrifts for September 2008 so that we know that our bank wasn't arbitrarily seized to place pressure on Congress to pass TARP and/or to insulate JPMC from the pressures of the 2008 financial crisis.
22) What happened to the $50 billion of reliable liquidity as stated in WaMu's Sept 11, 2008 press release?
24) Why did the FDIC offer to cover JPMC up to $500 million to indemnify JPM from confidentiality clause violations between JPM and WaMu? Is it standard operating procedure for the FDIC reward banks that break the law with immunity against prosecution?
25) Wachovia was determined to be "systemically important" to the security of the nation's financial system, and at the urging of Treasury Secretary Timothy Geithner was offered for sale (not seizure or receivership) to Citi, eventually to be merged into Wells Fargo via a separate deal. Was WaMu, the nation's largest bank failure in our history, not systemically important to rescue or enable a buyout?
