The latest executives facing subpoenas had cash and stock paydays in 2008 that ranged from about $38 million to $99.4 million -- largely from the bonus component of their pay packets, The Wall Street Journal reported today. The reported compensation occurred during a year when Merrill was a failing institution.
Cuomo's investigation is probing the merger and the so-called "variable incentive compensation program" that resulted in $5.9 billion in bonuses in a year that Merrill lost $32.6 billion.
with your TAX DOLLARS..But, party party......YOUR NOT INVITED..
ps...now pay your electric bill and quit complaining...don't forget to pay for your pharmaceuticals and HEALTHCARE INSURANCE too.....by the way.... FILL your car up too....
AIG's $49.5 billion in payments to Wall Street banks that gave to the president's election is lost in the ruckus being made over the executive bonuses. But while the ire of Congress and the media focus are on the $365 million that AIG paid out in bonuses to their executives, the president is hoping you won’t notice the $300 billion in taxpayer bailout dollars that AIG paid out to other banks, including $58 billion to foreign banks and $36 billion given to French and German banks alone. the rest of the AIG bailout cash is being spent.
You can't make this stuff up........ Breaking news
Lobbyists representing seven of Wall Street's top ten bailout beneficiaries and their trade associations made more than $36 million in campaign contributions to members of Congress in 6 months -- and hosted no fewer than 70 fundraising parties between Election Day and June, according to a new analysis by Public Citizen.
give me a billion... and I will give you a million............
75% Of Latest Bank Of America Bailout Used To Pay Merrill Lynch Bonuses (BAC) ................................also........
The Guillotine is literally too good for bankers
Three days after receiving $25 billion in federal bailout funds, Bank of America Corp. hosted a conference call with conservative activists and business officials to organize opposition to the U.S. labor community's top legislative priority.
Participants on the October 17 call -- including at least one representative from another bailout recipient, AIG -- were urged to persuade their clients to send "large contributions" to groups working against the Employee Free Choice Act (EFCA), as well as to vulnerable Senate Republicans, who could help block passage of the bill.
...Donations of hundreds of thousands, if not millions, of dollars to Republican senatorial campaigns were needed, they argued..."If a retailer has not gotten involved in this, if he has not spent money on this election, if he has not sent money to [former Sen.] Norm Coleman and all these other guys, they should be shot. They should be thrown out their goddamn jobs," Marcus declared.
Not only are some of the most non-trusted companies in America blatantly trying to buy off Congress, but they're using our bailout money to do it. Enough!
If there was ever a time to join Change Congress's political "donor strike" in support of fundamental campaign finance reform, this is it.
.In an agreement with six or so states, Bank of America was supposed to spend $8.4 billion on modifications to predatory loans, specifically Sub-prime and Option ARM mortgages. Each proposed modification is assigned to a "negotiator." The problem is that the mortgagee is not allowed to talk to the negotiator, so the whole thing is a sham. I've been unable to discover how many mortgages they've really modified (or, alternatively, their total value). I wonder if anyone can shed any light on this.
"This is what [Senator Dick] Durbin probably meant when he said the banks own the place," said Public Citizen's Taylor Lincoln
Remember the latest Bank of America (BAC) bailout, the one we were all so steamed about last week? (The $20 billion of cash and $100+ billion of trash-asset guarantees that absolutely had to be given or else Bank of America shareholders might have lost everything?)
Yes, well, you probably thought that that cash would be used to bolster the bank's capital or something. (We know you weren't dumb enough to think it might have been used to make loans).
Alas, it wasn't used for that. It was used to pay Merrill Lynch executives the huge bonuses they deserved for unloading their balance sheet on for-some-reason-not-yet-fired Bank of America CEO Ken Lewis.*
Has change really come to America? We'll believe it when we see it.
See Also: Merrill Pays Itself Huge Bonus For Snookering Ken LewisAIG's $43.5 billion in payments to Wall Street banks that gave to the president's election is lost in the ruckus being made over the executive bonuses. But while the ire of Congress and the media focus are on the $165 million that AIG paid out in bonuses to their executives, the president is hoping you won’t notice the $100 billion in taxpayer bailout dollars that AIG paid out to other banks, including $58 billion to foreign banks and $36 billion given to French and German banks alone. the rest of the AIG bailout cash is being spent.
While $58 billion of your tax dollars — or more accurately, your children’s tax dollars — are being used to pay foreign banks, a substantial portion of that money ($43.5 billion) is being used to pay American banks, including Goldman Sachs, Merill Lynch, Bank of America, Citigroup, Wachovia, Morgan Stanley, AIG International, and JP Morgan.
The following recipients of President Obama’s trickle-down-to-my-donors bailout plan rank among his top 20 contributors to his 2008 presidential election campaign, according to Open Secrets:
Goldman Sachs: $955,473
JP Morgan Chase & Co.: $646,058
Morgan Stanley: $485,823
Three other banks that were significant contributors to Obama received money through AIG:
Bank of America: $274,493
Lehman Brothers, which did not survive long enough to join the list of banks leaching off the work of the American taxpayer, also gave the Obama campaign $276,088.
Individuals identifying themselves as working for the banks above gave Barack Obama’s presidential campaign $3,617,724. In other words, more than 3.6 million reasons for the president to help focus the media’s glare on the relatively minuscule $165 million in AIG executive bonuses, and away from their $43.5 billion portion of $100 billion of taxpayer dollars the administration, by design or incompetence, filtered to other banks through AIG.
In receiving $43.5 billion for their investment of just over $3.3 million, it looks like the banks that gambled on Wall Street certainly got their money’s worth out of their investment in Barack Obama.
*BOFA will say that the cash used to pay the bonuses was not the actual cash received from taxpayers. Please. Cash is cash. What BOFA and Merrill are already saying in their defense is that the bonuses were accrued (and mostly paid) all year and that Merrill just shelled out the last $4 billion in December...a month before the latest bailout funds arrived.But that's ridiculous.
By the time it paid its bonuses, Merrill knew about the $21 billion of operating losses for the quarter and Ken Lewis and BOFA knew they would need more capital. Bonuses are supposed to be based on the full year's performance, so the Q4 losses should have reset the bonus pool for the whole year. If most of the bonuses really were paid prior to December (which would be highly unusual--it's almost always a one-time lump sum), then at the very least, the last payment should have been stopped. Meanwhile, if Merrill hadn't paid out $15 billion in bonuses, Bank of America presumably would only have needed $5 billion from taxpayers, not $20 billion.
And in case you're beginning to have sympathy for BOFA's argument that "bonuses weren't paid with actual taxpayer cash," recall that BOFA has ALREADY RECEIVED $25 billion in taxpayer funds, $10 billion of which were for Merrill. So Merrill used all of the original $10 billion PLUS $5 billion of the latest $20 billion to pay bonuses. Now are you mad?Battle Over Bonuses: Govt. Says Bank of America Threatens to Sue Employee Willing to Talk
Bank Wants Bonus Figures Kept Confidential, NY AG Fights for Public Disclosure
The battle for bonus figures in the New York State investigation into the merger of Merrill Lynch and Bank of America got even uglier today, with the bank "threatening to sue" a former employee who was willing to unconditionally tell the state's attorney general which Merrill high-fliers received the thickest slices of a $3.6 billion bonus pie that was dished out ccon the eve of the January merger, state officials said Friday.
Bank of America Corp.'s CEO Ken Lewis, right, arrives at the building that houses the New York Attorney General Andrew Cuomo's office, today, in New York.(AP Photos)
This latest public chapter came as New York Attorney General Andrew Cuomo's office replied to court documents filed Thursday by Bank of America that urged that the information remain confidential and that the confidentiality extend beyond former Merrill CEO John Thain's testimony to include statements from other executives, at least four of whom have already testified.
Fresh testimony given Thursday by former Merrill executive Gregory Fleming prompted the alleged threat to sue, Cuomo's office said.
More Bank Execs to Explain Bonus Bonanzas
WATCH: Bank CEO Pressed on Bonuses
More from Brian Ross and the Investigative Team
Bank of America would not comment on specifics but said in a statement, "Bank of America has continually offered to provide the information the attorney general is seeking if he would agree to an appropriate confidentiality agreement. He has continually declined."
In response to Cuomo's assertions in court documents that Bank of America's confidentiality conditions were unwarranted, the bank replied in a statement that Cuomo's investigation did not require the freedom to argue his case in the news media.
"Bank of America does not believe the attorney general needs the freedom to place private, personal information in the news media in order to conduct his investigation and determine if laws were possibly broken," said the statement issued by Scott Silvestri, a company spokesman.
The chief of Cuomo's Investor Protection Bureau, David Markowitz, argued otherwise in the court filing, to which Silvestri responded.
"Bank of America makes an unfounded assertion of confidentiality, even though it has no policy to protect the information. Its employees routinely share their compensation with competitors when seeking new employment, and Bank of America regularly seeks and obtains detailed compensation information from its competitors' employees," Markowitz said in a letter to New York State Supreme Court Justice Bernard Fried.
Fried is overseeing the confidentiality spat and is expected to rule next week on the issue as it pertains to testimony taken from Thain. Sunlight Foundation and posted on its website, www.politicalpartytime.org. There's no requirement to disclose details about fundraising events, so there might have been a lot more than 70 fundraisers for the industry. (The Huffington Post makes use of the Sunlight Foundation's invitations as well, visiting these fundraisers in an effort to cover lobbying as it happens.)
Here's a list showing the industry's biggest party animals:
But Summers, a leading architect of the administration’s economic policies and response to the global recession, appears to have collected the most income. Financial institutions including JP Morgan, Citigroup, Goldman Sachs, Lehman Brothers and Merrill Lynch paid Summers for speaking appearances in 2008. Fees ranged from $45,000 for a Nov. 12 Merrill Lynch appearance to $135,000 for an April 16 visit to Goldman Sachs, according to his disclosure form.” — Washingtonpost.com
So I guess that $45,000 speaking fee from Merrill Lynch wasn’t technically a bribe because Summers wasn’t named to Obama’s economic transition team until Nov. 24 — a full 12 days later. I’m sure Larry Summers had absolutely no inkling whatsoever that he was going to be one of the key advisers to the new administration on Nov. 12.
It likewise makes perfect sense that Merrill Lynch, a company just months removed from having to be rescued from bankruptcy by an 11th-hour, pseudo-state-subsidized buyout by Bank of America, would decide to spend $45,000 on a speaking appearance by Summers because, well, they really valued his economic expertise and his proven ability to rally the troops with his stirring rhetoric.
It certainly had nothing to do with the fact that a) it was eight days after a Democrat was elected to the presidency; b) Summers had a long history of being one of the key policymakers in Democratic Party politics; and c) Merrill was absolutely not going to survive more than a few more months unless taxpayers forked over another 20 billion or so to cover the giant hole in Merrill’s balance sheet that was, at that time, still being hidden from Bank of America and its shareholders.
And how about that $135,000 appearance for Goldman Sachs in April, when Summers was already involved with Democratic Party politics again? That wasn’t a surreptitious campaign contribution at all!
But you have to give Goldman credit: it sure is thorough. It literally leaves no stone unturned.
One has to love the sequence of events here. Back in 2004, Goldman chief Hank Paulson goes to SEC chief William Donaldson and petitions to have lending restrictions relaxed for the top five investment banks. Donaldson rolls over, the restrictions are relaxed, and it’s a disaster, as the top five banks immediately overleverage themselves — two of the five, Bear Stearns and Lehman, would actually collapse, at least partially as a result of being insanely overleveraged.
In the midst of this disaster, Paulson is named Treasury secretary. He does nothing about the worsening financial crisis until it is far too late, then allows one of Goldman’s biggest competitors, Lehman, to fail while at the same time intervening on a huge scale to save AIG, which just happens to owe Goldman a ton of money.
When AIG is bailed out, its government regulator is not in the room, but the new chief of Goldman, Lloyd Blankfein, is. In fact, Goldman Sachs ultimately receives about $13 billion of the money paid to AIG by the government in the bailout, reportedly getting paid 100 cents on the dollar for its AIG exposure, despite the fact that the bank claimed it wasn’t going to suffer severe losses if AIG collapsed.
Later, another former Goldman executive, Ed Liddy, is installed as head of AIG — which just happens to get bailed out twice more, the last time to the tune of $30 billion.
The last two bailouts of AIG take place after a former Goldman chief, Robert Rubin (who, incidentally, helped start this mess by ramming through a series of i-banker wet-dream deregulatory moves as Treasury secretary for Clinton in the 1990s), is named to the Obama transition team, joining Summers (who had already taken $135,000 from Goldman that year) and Timothy Geithner (a protege of another Goldman alum, John Thain, former president and chief operating officer and notorious scumbag).
When it comes time for new Treasury Secretary Geithner to name a chief of staff, he chooses Mark Patterson, who is less than a year removed from working as a lobbyist for … Goldman Sachs. Patterson’s great contribution to society as a Goldman lobbyist was opposing a 2007 measure introduced in the Senate by presidential candidate Barack Obama to rein in executive compensation.
I remember watching Obama the presidential candidate give a speech in Mason City, Iowa, in 2007. Obama had made a big show of not having registered lobbyists working for his campaign, and he promised that lobbyists “won’t work in my White House.” The line was a hit and became part of Obama’s stump speech. I must have heard it two dozen times.
A little over a year later, he put a registered lobbyist of a bailed-out investment bank into a job whose primary responsibility is administering bailout money.
It gets worse. According to a Glenn Greenwald piece I just read, even Gary Gensler is a former Goldman employee. That absolutely blows my mind. Genlser is Obama’s choice to head the Commodities Futures Trading Commission, whose purview is the derivatives market. The CFTC was the battleground where ages ago Rubin, Summers, and then-Rubin aide Gensler teamed up to whack CFTC chief Brooksley Born, who had serious concerns about the burgeoning derivatives market, in particular the credit-default swap market. Rubin overturned Born’s recommendations, and derivatives were freed from most regulation. That economic Alamo led almost directly to the AIG disaster.
Think about this for a moment. A former Goldman chief, Rubin, presses the CFTC to deregulate a type of derivative contract whose chief benefit to an investment bank like Goldman is that it allows it to lend more — the CDS being most useful as a tool to move investment risk off a bank’s balance sheet.
Then another Goldman chief, Paulson, pushes for further relaxation of lending limits. Then Goldman jumps head first into the housing bubble, buying tens of billions in CDS protection to hedge its crazy investments. This massive explosion in lending by banks like Goldman, fueled in part by the use of derivatives like CDS and fueled still more by the 2004 change in rules, puts an enormous strain on the economy, leading to giant holes blown in its hull by the end of 2007 and on through 2008.
It follows that when Goldman’s chief partner in those CDS deals, AIG, collapses as part of this wave of crashes, Paulson — now Treasury secretary — rushes to the rescue, pumping billions in taxpayer money into AIG that is quickly funneled to Goldman. Then a Goldman alum is put in charge of AIG, while another bunch of Goldman alums funnels still more bailout money to AIG, and yet another Goldman alum is put in charge of regulating the derivatives market that is the focus of most of the bailout efforts.
In the midst of all of this, something amazing happens. Goldman Sachs, along with Bank of America, Morgan Stanley and a host of other “troubled” banks, reports a profit for its first quarter in 2009! How and why that happened is another fascinating story, for another time. For now, the only thing to remember is that all the ones who got us into this mess — Rubin, Summers, Goldman in general — are now being put in charge of the cleanup by a president who spent most of 18 months on the campaign trail pledging to end the influence of money in politics.
Add this to the obscene giveaway that is the toxic assets program Geithner has just devised (Goldman Sachs “expressed interest in participating in the plan as an investor,” according to the Wall Street Journal), and you have an amazing situation. Between the Bush and Obama administrations, you have a bailout program that has now figured three ways to funnel money to Goldman Sachs: via AIG, via TARP and now via this trillion-dollar “public-private investment program,” which basically lends huge amounts of money to investors and provides guarantees against heavy losses. It’s free money, state-subsidized profiteering at its most naked.
I hear all the time from people who complain that it’s naive to wonder why we put Wall Street executives in charge of policing Wall Street — that this is actually quite a sensible policy, because we need people with experience in that world making these decisions.
The reason people say this has nothing to do with reality and everything to do with the fact that the financial markets are intimidatingly complex. When Enron buys a seat at the table to conduct energy policy under the Bush administration, everyone knows what that is. When Reagan hires notorious union busters to run the National Labor Relations Board, everyone knows what that is. And when we hire investment bankers to run banking policy, and put investment bankers in charge of handing out bailout money to investment banks, we ought to know what that is. But for some reason we don’t seem to see it the same way, not as clearly.
In my mind this officially ends the Obama honeymoon. I can maybe see one or two of these creeps in key positions. But this many — it’s an undeniable pattern. He put William Lynn, a former Raytheon lobbyist, in the Pentagon as deputy defense secretary. A lot of people squawked about Obama’s early lean toward John Brennan as CIA director because of his role in establishing the “enhanced interrogation” policies, but to me more significant was the fact that Brennan was the former chairman of the Intelligence and National Security Alliance, which is sort of like the chamber of commerce of intelligence contractors.
Most importantly, I’m sensing in these economic appointments a kind of drearily cynical parsing of the approval-ratings situation — Obama knows he’s still flying high with the “Yes We Can!” T-shirt crowd and knows that most people simply are not going to give a shit if he packs his Treasury Department with Goldman alums and lobbyists, despite the fact that he explicitly promised to do otherwise.
See Also: Larry Summers On Good Friday, Give Us 6 Words, and We Just Might Give You 100 Bucks, Larry Meets The Unimpressed, Obama: Stop protecting Wall Street bankers from Main Street, Larry Summers Protest, Protesters Heckle Obama Economic Adviser, Summers Defends Role in Bank Deregulation, Government Sachs has strengthened its position through bailout, and Mission Creep: The Incredible Expanding Power to Bailout.
Technorati Tags: larry summers, economic policy, economic advisor, barack obama, economic adviser, corruption, goldman sachs, bribes, aig, de shawLobbyists representing the American Bankers Association gave the most of any one group, dishing out nearly $1.96 million to members of Congress from the fall to the summer, followed by Citigroup at just over $1 million and Goldman Sachs at $2,777,476.