Rarely in the rich history of congressional stonings have the victims been so crisply-attired, so contrite, so deferential, and so tolerant of their grandstanding captors.
The chief executives of eight major banks on Wednesday confronted a nation's rage with their perceived greed, ineptitude, love affair with leverage and exploitation of taxpayer largess when they were hauled before the House Financial Services Committee led by brainy, rhetorically acidic Chairman Barney Frank (D-Mass.).
If Morgan Stanley boss John Mack didn't get a bonus, even in a good year, asked Frank, would he leave the office early each Wednesday, feeling underappreciated? Why does he need to be "bribed" by a bonus?
"If you gave me no bonus in the best year, I'd still be here," responded Mack, trying to underscore how much he loves his job. Of course, that now raises the question of why Morgan Stanley's (probably lapdog) executive compensation committee should ever give him a bonus. But it was a smart bit of public groveling by Mack.
"Let me be frank, my constituents in Illinois are angry and so am I," said Judy Biggert, a moderate Republican from the Chicago suburbs who touted herself in one campaign as a former car pool mom and assistant soccer coach. "We don't believe that taxpayer money has been spent wisely. We don't have the answers we need yet."
By the time they were all done, and job-loving Mack was liberated to head to Europe and Asia on business, it was fitting that precious few members of Frank's panel were still around. Ditto Rev. Jesse Jackson, the omnipresent Zelig of our public life, who snared himself a spectator's seat before he, too, could handle no more. The members, like the U.S. Treasury, seemed tapped-out, simultaneously frustrated and exhausted by the devilishly complex issues at hand, be they getting more loans to constituents; assuring fewer foreclosures; limiting the Earnest Eight's compensation; or discerning just exactly where all our billions have gone in recent months.
There were answers, even if not satisfying to Biggert and colleagues. They included perhaps the big surprise, namely the claims of the big bad bankers that they'd foreclosed on precious few homes. In addition, there was the inherently trickier-to-verify assertion that bailout funds had not been neatly transferred into compensation, dividends or the pay of their beloved Washington lobbyists, the wallet-sucking species which may actually be putting in full days now before heading to the Capital Grille, the Palm or Morton's.
For sure, the chief executives, who operate like kings in their monarchical corporate cultures, faced the inherently demeaning moments which are part and parcel of such congressional shows. Just ask, say, any tobacco or even Major League Baseball executive who's ever surfaced at a House or Senate hearing.
For example, California Democrat Brad Sherman, as if a Pre-K teacher with four-year-olds, asked for a show of hands on whether panel members owned or leased a company jet. Everyone did, except Lloyd Blankfein of Goldman Sachs Group Inc., who presumably suffers through the indignity of first class on commercial.
Perhaps it's coincidence that Sherman's district includes parts of Burbank, home of NBC, since there was a faux Sam Waterston Law and Order air to his interrogation. Playing amateur prosecutor, he requested both the amount of bailout funds each had received and their planned 2009 salary and bonus. Citigroup boss Vikram Pandit indicated he got $45 billion from taxpayers but would only take $1 in pay and no bonus this year (of course, given his performance, some critics would say he's overpaid).
Others panel members, such as California Democrat Maxine Waters, showered the bankers with passionate anecdotes about constituents seemingly screwed by increased interest rates on credit cards while the banks were getting bailout funds. She was honest enough to admit she'd always fought the banking industry on issues like redlining and predatory lending. But, Waters being Waters, she also asked a question which made absolutely no sense to the panelists, proceeding to take their semi-dumbfounded silence as affirmation of her particular conspiratorial thesis.
As for the matter of credit card rates, Bank of America's Kenneth Lewis was short of convincing in indicating he'd only raised them on nine percent of his customers last year.
Not a single executive conceded any significant error in their use of bailout funds, overseeing mortgages or dealing with credit card holders, though Mack did concede a strategic corporate stumble shared by many institutions, namely the stratospheric leverage he'd operated under (32 times assets) during the heady days of easy money.
Indeed, Wells Fargo & Co's John Stumpf, who arguably runs the best bank of the lot, parried the inherent suggestions of taxpayers being shorted by offering impressive detail on his lending in the last 18 months, underscoring how it far exceeds the bailout funds he promises to repay.
Still, none provided a very convincing answer as to a central quandary of the economic crisis, namely how they and the government will deal with the so-called "toxic" assets on the books of many. What actually is the market for them? The tension inherent in Treasury Secretary Tim Geithner's desired private-public partnership on that score was readily apparent
Also apparent was that the bankers' lobbyists and public relations entourages were lucky boys and gals on this day.
For starters, the bankers had an easy act to follow, given the public relations disasters of Detroit's auto chieftains, America's most recent designated corporate villains. Second, there is the implicit understanding that they may be part of the problem, but they are critical to the solution, too. Third, they were assured of less media attention than they deserved since the spotlight was really on bargaining to reconcile differences in the House and Senate stimulus bills.
But it was still not an easy hurdle, as one was reminded if watching coverage on Bloomberg TV. When Bank of America Lewis began, the screen flashed these relevant facts: "In '07 Made $16.4 million...$45 billion in govt loans."
"We understand taxpayers are angry," he said, quickly offering up data on what he said were $110 billion in loans his bank gave in the fourth quarter of 2008. He assured one and all that BOA has used its bailout booty well. It was much the same for Goldman Sachs Group Inc.'s Blankfein, who took home $70 million in 2007 and conceded a "need to regain public trust."
Amid the posturing by their interrogators, the bankers, whose well-starched shirts did not seem to wilt during the daylong session, did engender a smidgen of sympathy. It can happen during a collective crisis.
"We're in this together," said one Indiana congressman, adding that the country depends on the bankers' good judgment.
There was even a plaintive call to not necessarily help all his constituents from one Texas congressman.
"Please, if you don't think they can repay it, don't loan," he told the Earnest Eight.
Amid all the complexity and confusion, his counsel seemed so disarmingly simple.
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