The Investigators

  A local bank that received millions in federal taxpayer dollars has released information about the salaries it pays some of its executives.

As we reported in February, Plains Capital bank received $87 million in federal stimulus money.  At that time, the bank would not tell us specifically what it planned to do with your money.  Instead, it posted information on its website.

But according to recently-filed government documents reviewed by CBS 11 News, the CEO of Plains Capital Bank, Alan White, received more than $3 million in total compensation for 2008.

White pocketed $1.35 million in salary. He also took a $500,000 bonus, used the company plane for personal travel and was paid $36,000 as a personal car allowance.

Plains Capital sent us a statement which reads in part, "The bank has fully complied with all restrictions, including those relating to compensation."

Plains Capital stated it has paid dividends on the money to the government but has not paid back the balance.



Below is the entire unedited text of Plains Capital's statement to CBS 11 News.  Comments in bold text are the questions we asked the bank in an email.  The bank's responses follow each question:

"PlainsCapital has been and continues to be financially strong and stable. It was not a recipient of federal bailout money that was provided to financially-distressed large banks.

PlainsCapital did accept invested capital from the Treasury's Capital Purchase Program – a program designed to enable healthy community banks to stimulate the economy. The increased capital has been used only as the Treasury intended: to provide loans, mortgages and related financial activities that directly help area businesses and individuals in ways that are most likely to jumpstart economic recovery.

PlainsCapital was never part of the problem – it is part of the solution. The criticisms you heaped upon PlainsCapital and other CPP participant banks in Dallas were unwarranted. Frankly, your story was disheartening.  (Editor's note: click here for the story in question, which CBS 11 News stands by.)

My client was reluctant to provide any comments to your questions because they believe that you will, once again, mischaracterize the bank's role in the recovery effort. I hope that is not true.
PlainsCapital has met all of the Treasury's requirements for the uses of funds and reporting. The bank has fully complied with all restrictions, including those relating to compensation. The bank continues to make quarterly dividend payments on the invested capital, and when the funds are returned to Treasury, the taxpayer can expect to make a good return on the investment.

Why did the bank take nearly $90 million in CPP money and yet rewarded some of its top executives with large bonuses (some as high as $500,000)?

If PlainsCapital was financially troubled and getting bailout money from the government, this might be a fair question. But as you know, PlainsCapital's circumstances are very different. As a financially healthy bank it would be unwise for PlainsCapital to avoid fairly rewarding its employees for their performance. And as a participant in CPP, the bank meets all of the Treasury's restrictions regarding compensation.

Why did the bank take nearly $90 million in CPP money and continue to use the corporate jet and other perks?

The corporate jet is not a perk. PlainsCapital companies have 166 offices in 31 states. That aircraft is typically used when it is the most efficient way to transport time-starved executives that are traveling on company business. If PlainsCapital was financially troubled and getting bailout money from the government, which you know is not the case, using a corporate jet might be a legitimate reason for criticism.

I also show that none of the $87 million has been repaid – please ensure that is correct – the last update to the U.S. Treasury was 7/2/2009.

Your information is correct. At this time, the bank plans to continue using the additional capital to achieve Treasury's objective of stimulating the economy. As explained previously, the capital invested by Treasury was never needed by PlainsCapital – it was accepted because the bank believed it could be used successfully to help businesses and individuals. Please do not overlook the fact that PlainsCapital pays quarterly dividends to Treasury on the amount of invested capital.

Also – one last thing – how much money in loans has the bank issued out since it took the money?

As of May 30, 2009, PlainsCapital has made over $300 million in total loans since Treasury's investment of capital in December 2008. Please see the attached chart.

Bennett, simply stated: The CPP is an economic stimulus program, not a federal bailout. Participating community banks are healthy banks – that's why they were asked in the first place to help in the economic recovery. As long as they meet Treasury requirements, it is in the best interest of the taxpayer for these banks to continue to operate as successfully as they have in the past. That is what PlainsCapital has been doing and will continue to do."