Here’s some outrage we can believe in
Kenneth Lewis, Bank of America chairman, CEO and president.
This, I think, is exactly the kind of action that many Americans have been asking for as the government spends ever-more of our tax dollars to prop up flailing U.S. corporations. It may be a cheap political stunt, but it reflects the anger that is simmering among taxpayers.
This letter to Kenneth D. Lewis, chairman, chief executive officer and president of Bank of America Corp is signed by New York Attorney Gen. Andrew Cuomo and Barney Frank, chairman of the U.S. House Financial Services Committee:
Dear Mr. Lewis:
We write to demand on behalf of taxpayers that Bank of America immediately disclose individual bonus data for all individuals at Merrill Lynch and Bank of America who received 2008 bonus awards of $1 million or more.
We believe that as a matter of transparency and disclosure, taxpayers have a right to know where their tax dollars go once received by TARP recipients. Accordingly, all TARP recipient institutions should disclose individualized executive bonus information to taxpayers.
As you know, late last year Merrill Lynch moved up its planned date to allocate bonuses and then richly rewarded many of its executives. Merill Lynch did this knowing full well that they were going to suffer huge losses for the fourth quarter and the year. At the time of the bonus awards, Merrill was in the process of being acquired by Bank of America, a TARP recipient. Moreover, Merrill Lynch also knew at the time that they had received a credit line of billions of dollars in TARP funds.
As a result of Merrill’s huge losses, taxpayers were forced to help Bank of America acquire Merrill by providing billions of additional TARP funds as well as insurance against losses from Merrill’s toxic portfolio. In short, the combined Bank of America-Merrill Lynch entity received $45 billion in taxpayer funds as well as $188 milllion in taxpayer-funded insurance.
Despite this massive infusion of taxpayer money, Merrill Lynch paid out bonuses totaling approximately $3.6 billion and Bank of America distributed a pool of more than $3.3 billion.
Taxpayers who are footing the bill obviously demand accountability and want to know who received these funds and why.
Our mutual goal is to stabilize and enhance our country’s financial institutions and system. The taxpayers of this country have given mightily to that cause. They deserve to know where their money is going and how it is being spent. Furthermore, we all agree that trust and confidence in our financial system must be restored. Transparency and disclosure are the building blocks of that trust and confidence.
Your refusal to reveal compensation information fuels distrust and cynicism at a most sensitive time.
Very truly yours,
Andrew Cuomo
Attorney General of State of New York
Barney Frank
Chairman, House Financial Service Committee, U.S. House of Representatives
cc: Bank of America Board of Directors
Don Mecoy
Business Writer
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I am more outraged at Congress since much of the problem lies within Washington, DC. Barney Frank praised Franklin Raines for his stewardship of Fannie Mae and blocked any government regulation of F-Mae or Freddie Mac. Frank, Dodd, Schumer, et al encouraged more lending institutions to finance home mortgages to people who could not qualify for traditional loans and therefore are as culpable as any bank official. The hypocrisy of politicians is reprehensible as evidenced by Speaker Pelosi’s use of military aircraft as if it were her personal airline, Dodd’s sweetheart mortgage from Countrywide,etc. And these are the people who are supposed to fix the problems ? Disgusting.