A Novel Question?
When Barney Frank stands up and says "We should act like owners," with respect to, for example, AIG, it brings up some rather interesting questions. For instance: Who holds the stock certificates on the preferred and common stock "the government" purchased? Who holds the notes for the debt? I sort of assume the answer here is "The Treasury" or "The Federal Reserve," as I'm not sure what structure Congress would even have place to take possession of equity, for instance.1 So, in the case of the former, the Treasury is a part of the Executive Branch. In the latter case, obviously the Federal Reserve is a part of the "Not A Government Branch" Branch. Can Barney, or any member of Congress, attempt to derive any power or privilege of ownership in these assets in a system that enshrines the doctrine of Separation of Powers? I'm not even sure Congress gets to vote the stock, much less claim some sort of extra regulatory powers that flow from ownership. Not that we are near there yet, but am I alone in thinking this would be an exceptionally interesting Supreme Court Case?
- 1. Actually, the correct answer is "Jill M. Considine, former chairman of the Depository Trust & Clearing Corporation; Chester B. Feldberg, former chairman of Barclays Americas; and Douglas L. Foshee, president and chief executive officer of El Paso Corporation," as these are the three trustees of the A.I.G. government trust. They are vested with "absolute discretion and control over the A.I.G. stock, subject only to the terms of the Trust Agreement, and will exercise all rights, powers and privileges of a shareholder of A.I.G." ("Who Owns A.I.G.? (A Continuing Story)," Dealbook, February 5, 2009).