These top nine banks distributed bonuses of at least $1 million to each of 5,000 top executives. This is despite taxpayers ponying up what will eventually be trillions of dollars to save the banks and the nation from disaster.
Scheer quotes from the Cuomo Report :
“Two firms, Citigroup and Merrill Lynch suffered massive loses of more than $27 billion at each firm. Nevertheless, Citigroup paid out $5.33 billion, in bonuses, and Merrill paid $3.6 billion in bonuses. Together, they lost $54 billion, paid out nearly $9 billion in bonuses and then received TARP bailouts totaling $55 billion. For three other firms—Goldman Sachs, Morgan Stanley, and J.P. Morgan Chase—2008 bonus payments were substantially greater than the banks’ net income.”
In each instance, those bonuses on average more than doubled earnings and were in turn more than doubled by the government bailout in TARP funds. Those funds, and the nonrefundable tens of billions passed on through the AIG bailout and other government programs, come from the very taxpayers already reeling from a banking collapse brought on by reckless lending practices.
Yet the $306 billion in toxic assets that Citigroup—a leader in the irresponsible practices that created such “assets”—managed to pile up are also now guaranteed by taxpayer funds. And being on the public dole didn’t prevent Citigroup CEO Vikram Pandit from “earning” $38 million last year.
The Merrill Lynch bonuses were paid as the company was about to collapse. It was saved at the last minute by being purchased for $50 billion by Bank of America in a deal engineered by the federal government and facilitated by $45 billion in bailout funds to BofA. On Monday, Bank of America agreed to pay $33 million in penalties to the Securities and Exchange Commission to settle an SEC complaint that BofA had deceived shareholders about those billions in bonuses.
One of those handsomely rewarded was Thomas Montag, now with BofA, who received a $39.4 million bonus for his work at Merrill Lynch, a reward for his performance as Merrill’s trading and sales chief, a position in which he presided over the billions in mortgage acquisitions that fueled the company’s downfall.
The banks, considered “too big to fail,” were quickly showered with enormous amounts of money, contributing to a U.S. deficit expected to grow to $1.86 trillion this year. But homeowners are not too big to fail, and they were left to the tender mercies of the very bankers who swindled them with flaky mortgages.