FDIC Defies Obama, Prolongs 'Storm', Destroys Jobs, Stifles Recovery Says Astani Enterprises CEO

President's SOTU Rhetoric Undermined By Job and Incentive-Decimating Policies

Jan 28, 2010, 16:22 ET from Astani Enterprises

WASHINGTON, Jan. 28 /PRNewswire-USNewswire/ -- Sonny Astani, Founder & CEO of Astani Enterprises, objected today to President Obama's State of the Union assertion that, "the worst of the storm has passed," observing that the President's own FDIC has been seizing nearly completed construction projects, allegedly "scrubbing" them of all contractual liability, and delivering them to well-connected Wall Street consortiums – for pennies on the dollar and only a fraction down, with the promise of 500-600% returns – and all neatly underwritten with taxpayer-financed interest rates of zero.  

Astani decried the FDIC's "unfair transfer of wealth, which has resulted in lost jobs, hampered development, and delayed economic recovery."

"When Corus Bank failed this past summer, the FDIC swooped in and seized my nearly completed CONCERTO community redevelopment project, despite my faithful and timely service of the Corus loan," lamented Astani.  "When I offered to purchase my $162 Million  loan – at a guaranteed 10% increase over the highest bidder – the FDIC refused to even consider my plan.  Instead, they sold it for $85 Million – at 50 cents on the dollar – to Starwood Capital Group, a Wall Street hedge fund.  And ever since, they have conspired to keep Concerto's homebuyers out of their homes, its construction workers off the job, and the project from being completed. They're making so much money collecting interest and 'managing' the project, they have no incentive to complete it."

The FDIC's inexplicable policy applies to Astani, but also to countless other developers throughout the country, in New York, Florida, Arizona, and Nevada.  Demonstrating, Astani continued, "FDIC's policy and procedures guaranteed that government-held assets were sold to the very same Wall Street folks who got us into this mess, and for a price less than what the Main Street folks were willing to pay."

What happens when the government gets involved in picking winners and losers? Jobs disappear and unemployment rises. 

The President says jobs are his number one priority, but FDIC's actions speak louder than words.  In the case of CONCERTO, the government's actions – in particular, the FDIC's – have not only stymied job creation, they have retarded job creation.  A perverse comedy of unfortunate decisions.  But no one is laughing.  Especially not the hundreds of unionized workers laid off due to this counter-productive government policy.  "Jobs, Jobs, Jobs?" Not when the FDIC pursues these types of policies, Mr. President.

According to Sonny Astani, "the only one benefiting from this whole mess is Starwood, via the sweetheart deal they received from the FDIC.  They are laughing all the way to the bank - to the tune of $50 million per year in fees and additional hundreds of millions in interest payments. Is it possible that every taxpaying American isn't outraged? Everyone should write their Congressman in opposition to these job-destroying, pocket-lining deals."

*The CONCERTO Project continues to sit fallow. So far, Starwood has collected $5 Million in interest ($1 Million per month) from Astani, even for September and October when they didn't even own the portfolio. Additionally, they are collecting in excess of $500K to pay for their consultant and their attorneys, among the most expensive in the U.S.  AND, they are charging the FDIC a 1% management fee annually, which totals $1.62MM for CONCERTO (the fee is not based on their purchase price but on the loan balances) so it is to their benefit to drag this out for years.  For example, Starwood has put $550 Million down for $5 Billion face value (hence they are receiving $50 Million yearly in management fees), so if they drag this on for 5 years, they will collect $250 Million -- OR half of their initial investment -- in fees alone.

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SOURCE Astani Enterprises