.from Schwartz Media Strategies Vice President Aaron Gordon
This is a head-scratcher. I’ve read several articles making the case that Bank of America’s rush to repay its borrowed TARP money had more to do with building positive perception among Wall Street the public than it did with clearing its balance sheet of taxpayer-funded debt. New York Times reporter Andrew Ross Sorkin throws a wrench into the equation today with his proposition that the bailout payback was really about getting big brother off its back so that it could tender a fat salary to its next CEO:
“Bank of America was simply desperate to get out from under the thumb of government, and rid itself of the scarlet letter tainting its public image. With Bank of America trying to recruit a new chief executive to replace retiring Ken Lewis, the firm needed to repay the bailout money to offer a competitive compensation package.”
Fair enough; there’s always a story behind the story. But from a public relations standpoint, what would the harm have been in BoA simply saying, “You know what America, we’re paying you back because it's the right thing to do and quite frankly, we’re tired of answering to you. Thanks for the help, but we’re a private corporation and we want to do things our way again.”
It remains to be seen whether this approach would have helped or hurt public perception of the bank. But one thing is clear: weeks of speculation about BoA's motive in paying back the funds only leaves the public questioning the company's real intentions. If this payback was more about dollars and cents than goodwill, then wouldn’t it be refreshing to hear an American company – let alone a bank – tell it like it is?
At the end of the day, leaving the public - and the New York Times - to engage in a guessing game only damages BoA's credibility. And if there's anything that this bank needs right now, it's street cred.