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Jonathan Tasini

Jonathan Tasini

Posted February 11, 2009 | 09:26 AM (EST)

The Greed Continues: $121 Million For FOUR Merrill Execs


To the question "have they no shame?" we already know the answer. And as we dig deeper and scrape the bottom of the barrel where the bottom-feeders have been lurking, we learn more about the immoral behavior of the incompetent, greedy elites. Today, the the tally is $121 million for FOUR--count 'em, FOUR--Merrill Lynch executives.

The Daily News reports this:

Four of the top executives at Merrill Lynch pocketed $121 million in bonuses just before taxpayers helped finance a takeover of the failing firm, the Daily News has learned.

The flush foursome each pocketed payments ranging from $18 million to $39 million, investigators from the state attorney general's office found.

Attorney General Andrew Cuomo for the past month has been examining the highly suspicious timing of the last-minute Merrill handouts.

In all, Merrill doled out $3.6 billion in bonuses just days before Bank of America finalized its deal to buy the collapsing firm - with the help of $45 billion in taxpayer money.

Cuomo presented his initial findings Tuesday to Rep. Barney Frank (D-Mass.), whose House Financial Services Committee holds hearings Wednesday in Washington on how banks are spending bailout funds.

"One disturbing question that must be answered is whether Merrill Lynch and Bank of America timed the bonuses in such a way as to force taxpayers to pay for them through the deal funding," Cuomo wrote to Frank.


And, at least for one of these greedy monsters, it wasn't as if he had to work that hard to rake in the dough:

One beneficiary was Peter Kraus, a Thain hire who started at Merrill in mid-September and quit Dec. 18, the day Bank of America took over.

He walked away with a $24.9 million bonus for those three months of work, which figures to about $249,000 a day. The day he quit, his wife closed on a $36 million luxury Park Ave. co-op, records show.

[emphasis added]

I know: when you get almost $25 million for three months work, it might be tough to get by on just $500K. According to this story, the bonus was given, despite the fact that Merrill had just recorded a $15 billion LOSS in the fourth quarter because it was guaranteed in his contract.

Which raises at least two points. First, why are we not demanding, in return for a trillion dollars more in taxpayer money, and entire house cleaning, including the boards of directors of the banks and financial institutions who approved contracts that require paying out money even if someone fails spectacularly and craters the company? Not a single one of these board members can be trusted to do the right thing.

Second, how can we trust any of these people who still run the institutions to live by the spirit, not to mention, the letter of the Administration's recently announced executive pay caps. As I noted when the caps were announced, they are largely a mirage because a company can get the cap waived with "public disclosure" and a vote of the shareholders. But, given the fact that "public disclosure" can be fairly weak and that the boards of directors typically have majority control of the shareholders, you have to clearly rely on the integrity and watchfulness of the Board members.

And these folks are not credible watchdogs. They all belong to the same clubs, travel in the same circles and sit on each others' boards. They will not hesitate to make sure that they are each rewarded.

There needs to be a massive house-cleaning, with public oversight locked into any company that gets our money--public oversight meaning individuals representing taxpayers who sit on those boards and have majority control. Otherwise, we will see the same story repeat itself.

I'll also repeat my personal rant: we still have time to demand in the legislation authorizing the money that if you take taxpayer money, you may not oppose any attempt to unionize the workplace. You must remain neutral. And, as an add-on, any institution facing charges by the National Labor Relations Board, or facing any federal civil rights suit on wage, age, race, gender or other workplace fairness violation, may not receive any bailout money.