US Chamber of Commerce at the Root of Financial Crisis
To find the "whodunnit" of our current economic crisis, look no further than the corporate boardroom.
Far from serving as checks-and-balances, today's corporate directors are under thumbs of the CEOs who selected them. With unquestioned power and ever increasing arrogance, CEOs can take unnecessary risks, hide details of bad investments, and pay out excessive bonuses to themselves and top executives regardless of their job performance.
That's how subprime mortgages and credit default swaps were hatched. That's how Bank of America's Ken Lewis kept details of Merrill Lynch's poor health and plans of multi-billion dollar bonuses from shareholders. That's how the initial nine banks that got TARP money could pay out $32.6 billion in bonuses last year despite getting a $175 billion dollar bailout from taxpayers.
While shareholders, and now taxpayers, pay the bills for the corporate elite, they have little real power to punish recklessness and corruption. Our undemocratic system of corporate board elections ensures that even when a majority of shareholders votes for change, oftentimes CEOs and their hand-picked directors can ignore the results and keep the status quo.
And that's just the way US Chamber of Commerce President Tom Donohue wants to keep it.
As Americans continue to face furloughs, layoffs, and dwindling savings, as millions find themselves unable to afford the homes that banks enticed them to buy with tricky mortgages, and as states and cities cut services as a result of declining tax revenue, CEOs and the Chamber remain unrepentant, unremorseful, and if they get their way, unregulated.
They're against President Obama's plan to protect consumers from harmful or predatory mortgages, credit cards, and other financial products. They've fought hard for years to keep the SEC weak, underfunded, and unable to protect investors from the Bernie Madoff's of Wall Street. And now they're fighting tooth and nail to stop shareholder democracy and keep corporate boards unaccountable.
Tom Donohue's service as a board member for companies plagued by accounting scandals, insider trading investigations, and massive shareholder losses makes it clear why he and the Chamber should fear the change America needs:
At Qwest, Donohue's committee approved a $12 million severance package in 2002 for former Qwest Chairman and CEO Joseph Nacchio at a time when the company's stock price was at an all-time low, its bonds had been downgraded to "junk" status, and its accounting practices were under investigation by the SEC. Nacchio is currently serving a six year prison sentence for insider trading at Qwest, a conviction the Chamber is seeking to overturn in a brief filed with the U.S. Supreme Court.
After Mr. Nacchio's unceremonious departure, the Qwest board approved a "golden handshake" for his successor, Richard Notebaert, who received an option grant worth an estimated $16 million before serving a single day in office. During Donohue's four years on Qwest's board, shareholders lost $62 billion.
And at Sunrise Senior Living, where shareholders have seen their shares tumble almost 94% in just over three years, the company reports that it is discussing resolution of a two-year SEC investigation into improper accounting, improbably timed stock options granted by Donohue's committee, and fortuitously timed insider stock sales by Sunrise officers and directors. The company recently paid $13.5 million to settle parallel shareholder litigation alleging that Donohue himself was among those who received backdated options and engaged in insider trading.
In this era of unbridled CEO rule, union-sponsored pension funds have stood up and made headway against the odds: they've helped rein in runaway executive pay and they've forced corporate boards to be more independent and accountable.
The SEIU Master Trust, a consortium of pension funds, originally raised concerns about those suspiciously timed option grants and stock sales, and filed a suit which resulted in Sunrise shareholders getting the right to vote on whether directors have to stand for election each year. The Master Trust's proposal to vote on directors yearly passed overwhelmingly.
Earlier this year, in one of the most contentious annual meetings in Bank of America's history, the SEIU Master Trust led a successful shareholder campaign to force CEO Ken Lewis to resign as Chairman of the Board. This was the first time ever that shareholders made a binding change to the by-laws of an S&P 500 company through a democratic election.
Real shareholder democracy and effective public regulation must become the rule, and not the exception, if we're going to rebuild a stable economy for the long term.
After all, if there are truly some companies and banks that are "too big to fail," where taxpayers must bail them out after their reckless behavior endangers their survival and our prosperity, then isn't that all the more reason to insist shareholders and taxpayers can hold the corporate elite directly accountable?
Tom Donohue and his CEO allies might not think so, but America can't afford their reckless and selfish behavior any longer. We need Congress to reform our financial system, fund strict enforcement of the rules, and give long term shareholders the power they need to reign in the out-of-control corporate elite.
Let's stop this cycle before more jobs are lost, more homes are foreclosed, and more retirement accounts are wiped out. Let's stop Tom Donohue and his CEO friends before they wreck our economy again.
Follow Anna Burger on Twitter: www.twitter.com/SEIU_AnnaBurger
Arianna Huffington: Barack Obama Is Doing My Job; Why America Needs Him to Do His
When it comes to dealing with Wall Street, President Obama seems to have traded in his position as our economy's commander-in-chief for a different role: pundit-in-chief.
Loading comments…
Want to reply to a comment? Hint: Click "Reply" at the bottom of the comment; after being approved your comment will appear directly underneath the comment you replied to
Why not save us all the trouble of following multiple misinformed story arcs and combine Big Business and Government once and for all? The flip-side of this: the CEO's and leaders of these government-run corporations would be elected by the people, thus becoming a great deal more accountable for their actions than they are at this present time.
Thank goodness someone is finally pointing out the obvious. The high-level executives are among the most corrupt and greedy in this country. The usury laws need to be re-established and these people must be held accountable if justice is to return to America. They should all be in prison, not in penthouse apartments and mansions.
The Chamber of Commerce has been complicit in the destruction of the American middle class since before Ronald Reagan.
People need to fully comprehend that virtually all of the gains of American business since Reagan have gone to the rich and powerful, not the workers who actually tote the bale and pull the barge.
The latest financial crisis is but another manifestation of pushing more millions of middle class Americans into poverty, losing their jobs and houses.
Most of this has come about because Boards of Directors and government regulators have become captive to business CEO's. CEO's pick their own boards who approve the CEO's pay package. And government oversight has all but disappeared.
Which is all pretty peculiar, since corporations are government chartered entities and government (meaning we the people) can require businesses to comply with any regulation we desire. And our main desire should be the requirement businesses must advance the interests of our society, and astronomical corporate pay does not advance the interests of our society.
A substantial part of the problem is that we the people pay money to the corporations when we need their services, and the corporations contribute money to our politicians when they need their services. We're at total odds with our own politicians. Whereas we pay corporations, corporations pay our politicians. So additionally, we badly need campaign finance reform.
This is a very good post. Fanned.
A comment on this, even some Republicans [very few!] are starting to admit that their policies have not been good for middle America.
I listened in amazement yesterday to David Frum, Bush's former speech writer who now works for the America Enterprise Institue. The AEI is about as far right as you can get without falling off the edge of the earth.
Frum was commenting on Bush's economic record and said that although it would be years before the verdict was in, the economic numbers were already shaping up to be worse then Carters. One of the things he talked about were the dismal numbers for middle Americans, the loss in earning power and their losing ground.
Now That. was some mea culpa for a Republican.
Chamber of Corruption? same anti-health care ads running in my state - it appears to be are trying to be the dobson style religious right dream of citizens in constant crisis - only way they can control workers - insecurity about health care, jobs, wages, mortgages, homes, foreigners - this crisis seems to be manufactured - go back to repeal of Glass Steagall, the Sandy Weill Citi group, UShealthcare deals, to see the decades long movement toward elimination of middle class/wage earner power and stability - Donohue and pals have a lot to answer for - they accomplished what the 20 jihadists on airplanes did not succeed in doing on 9/11
Those anti-health care ads sponsored by the U.S. chamber of commerce are annoying and terrible.
This same US Chamber of Commerce has the cash to run ads against any health care changes every 20-30 minutes on all 3 local channels in Des Moines. You can almost count on seeing one of you watch any station for a half hour, gets monotonous except that they are rich enough to have several slick versions.
They lie with such consistency and impunity that the question of their metaphysical evil is not an open one.
I have a problem with the very last sentence of your column, ,. What makes us so sure our economy has actually improved to the point where they could even wreck it again? That last sentence would have to assume that we have recovered, which I don't believe we have, regardless of all the baloney being spewed in the media about how we are now out of the recession. This idea is only in the minds of the economists who we have already established are bought and paid for by the FED. We are far from being in a recovery. Lets just see how this holiday season goes before we start talking as though we're out of the woods already.
Agree. All this talk about recovery is to reassure the top 5-10% that their money and investments are safe in these various institutions. A panic among the top tier would be a disaster.
The rest of us, the bottom 90 aren't ever considered in all this other then how these financial institution can wrest what wealth we have left into their ever expanding coffers.
Make no mistake about this, it's class warfare.
President Obama promised to restore the SBA's budget. The current SBA budget is less than it was under Ronald Reagan. He promised to restore the SBA Administrator to a cabinet level position, he promised to implement the 5 percent woman-owned business set-aside goal, and in February of 2008 he released the statement, "It is time to end the diversion of federal small business contracts to corporate giants." (http://www.barackobama.com/2008/02/26/the_american_small_business_le.php)
Not one of those campaign promises has been honored.
Hey there rule of law. I'm glad to see your use of the word, has, in your last sentence. So many people feel more like saying, "........... will ever be honored.....", "....... is not likely to be honored.......", or to use the now infamous Joe Wilson saying, You Lie. Others would be ranting and raving about their "issues" being the most important and a first priority but you have been smart enough to just put out a gentle reminder of promises yet to be kept. My guess would be that your issues will get their due but at a point way down the road.
CEOs have become an aristocratic class, controlling but not contributing to economic production. Naturally they promote their own self-interest. Government is supposed to use regulation to alter economic incentives so as to discourage anti-social manipulation of wealth. Don't hold your breath waiting for CEOs to regulate themselves.
Yeah, Chambers of Commerce are at the root of our financial problems. They're at the root of our health care miasma, too.
Corporations and Chambers of Commerce don't cry when people become disabled and die because of poor health care.
Corporations and Chambers of Commerce don't lose sleep when people spend their retirement savings on lifesaving cancer treatment for their insurance-less twenty somethings who thought they were invincible and didn't begin to make enough to buy health insurance anyhow.
Corporations and Chambers of Commerce don't hope with every ounce of their spirit in a better future for individuals or societies. Or countries, like America.
Only people do that. Corporations and Chambers of Commerce are mere things. Entities. Business models. They exist for one reason and one reason only: to make a profit. Making a profit is only part of being a human.
Corporations are not people, and it's time to stop giving them the benefits of people, when they pay none of the costs.
luzianna girl----hold on, soon the U.S. will resemble Mexico.
Mexico, ruled by six Aristocratic families for 600 years to produce a populace of Peons doing the bidding of the ruling class. The Aristocrats didn't even give them jobs - only taught them to raise corn.
There's alot of economic engineering going on and the American people are not even aware of what the outcome will look like, and don't even know they are being had.
I never thought I would be agreeing with Larry Flynt on anything, but consumers need to unite. Both political parties seem unable or unwilling to deal with the problem of corporate rule. Even those harpies, the right wingers, should be happy as we take our country back.
Truth. Both parties serve the glutons of finance, insurance and healthcare. Only an independant could do something, and the actions they would need to take would probably result in their assasination before they could achieve their goals. (I personally feel treason charges are appropriate and the death penalty a fitting wake up call to those that would follow). Alas, it would seem only the end days, when the weight of their own greed will cause the total collapse of our economy, will bring relief from their tyrany.
You are NOT taking your country back by "sticking it to" CEO's (corporations). And for whom would most Americans get their paychecks from if not "big business"? While I would be acting like an ostrich with my head in the sand, most of what we are seeing has been purposely orchestrated by big business being "in bed" with government. Anytime you see closed doors with these two entities, hang on to everything you can because it is in serious jeopardy.
Do you not see how the government has always divided Americans? Black/white, rich/poor, young/old and the beat goes on.
We are heading toward being serfs and too many of you seemingly intelligent people have your eyes closed. We are Americans, we are no worse than any other country; as a matter of fact, better than most if not all. We do more to alleviate hunger and cruelty in this world than any other government. You have bought into the rot being handed to you by foreign countries (jealous) of our success and pseudo intellectuals indoctrinating from on high.
All I ask is that you look at all sides and make your very own decision. If you decide that Communism/fascism/totalitarianism, etc. is for you, please go to where you will be happy and not take away what makes me happy. That, in a nutshell, is the difference between libs and Conservatives. We don't bind anyone whereas all the left ideas, bind and prevent personal choice.
Please get your facts straight. MOST people in America work for Small Businesses, not big business. When the Chamber allows the giant corporations to control their mission at the expense of the thousands of mom and pop businesses that actually create the bulk of the wealth that Wall Street is busy stealing from us, they are not helping most of America--the working and middle class.
Also in your list of "isms" you left out the very one you should have embraced--Feudalism, and it's already here!
You're on, Imp.! For some reason I have managed to live happily, comfortably and without objectionable influence on my quality of life. As such, I prefer to use the word greed in place of commie/fasc/tot., etc. Needless to say, that greed is in all institutions in all places and "in cahoots" is no doubt frequently at play. For those that do what they do as the result of greed then I think it fair to say they are "in it" for themselves, which is to say, in it at the exclusion of others. You are correct, "both parties" are found in bed all too often. Fortunately, and perhaps in my ignorance, I don't feel as though I have been "shat" on enough to get the adrenals going in to fret mode, "shat" on enough to feel everything is an all or nothing proposition. In that regard therefor, I would not think of libs. and cons. as necessarily being a blanket restriction of another persons pursuits. I think we're on the same page, and, best of luck in your endeavors.
And why why WHY do tens of thousands of small businesspeople still belong to the Chamber? It DOESN'T represent their interests, and much of its current flak about healthcare is directly COUNTER to what is in the best interest of small business. The Chamber has been usurped, 100%, by the biggest of big business. Heck, what it advocates isn't even good for major companies like GM (who can't compete globally because of healthcare costs), but it SURE speaks for health insurers.
GM cannot compete because of UNIONS. Our government has so many oversight departments..i.e. OSHA that the union is not necessary. Look around you, every state that has unions is in the red.
Unions were very necessary years ago but now they are just one more way to enslave people and get rich in the process.
Health care? You think that's the problem? Look again, my friend, the problem is the same one on a larger scale that I have with IRS...it is too invasive and I am entitled to privacy as a way in my pursuit of happiness....no, the public/gov does not have a RIGHT to know. One should never give power away and knowing everything about people is definitely giving power away and enabling people to shut you up or whatever if you don't go along. Read history. Most (if not all) atrocities in history have been done by governments with too much power.
No, Unions are not the problem. This is just another neo-con talking point like deregulation, or trickle down economics--non of which work.
Without Unions we would have the same work environment our parents faced during the depression.
Again, a greater understanding of invasive, privacy, pursuit of happiness and a RIGHT to know (what?) might help in understanding your position. Can you help me out?
It's clear, the US Chamber of Commerce is nothing more than a quasi-legal organized crime syndicate. It should be prosecuted under federal RICO statutes and disbanded.
Read "how I found freedom in an unfree world" Great book.
So true but you fail to ask why. Unregulated capitalism succeeds because it is built on the farming culture. But in this case the farmed animals are the humans. The fact that the old religions of the farming culture still survive and have a say in the mainstream politics is a good indicator of this fact. The mainstream addiction to spectator sports and entertainment is another example. In the end culture reflects the method of production and consumption of commodities. What can we expect when the majority of the population are in mind numbingly boring jobs, slaving away their insignificant lives? For the system to be stable, it has to find a suitable culture of master and slave. Criticize them as much as you want. As long the bondage and discipline between the the master and slave stays intact, there will not be enough critical mass to change the system. Blame the slave as much as the master. But they will not listen and understand. Because they are blinded by emotional bondage to the master. The fruit is not ripe yet, but ripening fast.
Sadly there is a large grain of truth in your comment.
People, Plutocracy or Democracy
Choose!!!!!!
Your comment is interesting because what I just wrote is also true of the Farm Bureau. In no way does the Bureau advocate sustainable farming, but has become wholly the creature of the farming "industry," including its biggest corporate advocates (think Monsanto). Just like small business, too many family farmers still belong to the Bureau when it simply does not represent their interests.
I'm reminded of the South Park Thanksgiving episode where "Gobble" gets taken with other turkeys to the humane slaughtering house. They are brought before a huge projection screen where a panaramic sceen is shown getting their attention so that a huge buzz saw could slice across the room decapitating the lot of them. Fitting metaphor for the way mainstream media treats the american public.
WHAT? Capitalism is regulated and in the process of demanding more and more paperwork, fines, and whatever the elitists think will grant them more power and money is greatly stifled. What Enron did something different then Fannie/Freddie/Feds? I don't think so. Where, pray tell, do you think all that money has gone that people lost from their hard earned savings? Clue, it doesn't just "disappear"....All of this from Bush's first TARP to all the rest is a way to equalize us with the rest of the world in order to bring about that "holy" one-world government. I saw it coming; why didn't you?
Many of our tax dollars have gone to foreigners. I deeply resent that. Their way of government has been unsuccessful and so they take from the "hen that laid the golden egg"... Our freedom has allowed a supreme lifestyle precisely because of our individuality and jealousy instigated by gov is what has taken over too many minds that are quite capable of seeing if only they were not blinded by this hideous emotion.
AB- the only bone I'd pick with you is regarding the use of one word, succeeds (2nd sentence). I don't think unregulated capitalism ever "succeeds" for me. A handful of ruthless, rich people does not define my idea of success (for anyone). Would it be fair for me to use the word "exists" instead? Fortunately for me I'm sitting in our modest home at 2300 ft. amongst the redwoods in the middle of nowhere. I have to be more concerned with bears and pumas and don't call me late for dinner. Thanks for your perspective and your pursuit of resolution. Adieu.
The Chamber of Commerce? Give me a break. The Fed had more to do with the financial crisis than the Chamber of Commerce ever had.
Did you read the article? Of course, you don't have to, you already know everything...
I'd tend to council College by saying do not think that your being in college means you know everything. Your young, you haven't been there and done that. You've read the books but you can't practice what you preach because you haven't practiced yet.
You must be logged in to comment. Log in or connect with
