Thursday, February 19, 2009

Where HAS all that money gone?

Bank of America's CEO is subpoenaed

Have you been wondering where have all those TARP bailout billions have gone- the money the Bush admin tossed to Wall Street haphazardly- with no strings attached? 

Bank of America CEO and Chairman Kenneth Lewis has been issued a subpoena by the New York State Attorney General's Office, which is investigating whether the bank violated state law by withholding information from investors. Last week, he accused Merrill Lynch, which was acquired by Bank of America late last year, of secretly doling out big bonuses before reporting a huge quarterly loss.

"Merrill Lynch's decision to secretly and prematurely award approximately $3.6 billion in bonuses, and Bank of America's apparent complicity in it, raise serious and disturbing questions," A.G. Cuomo wrote in a letter to Rep. Barney Frank, D-Massachusetts, chairman of the House Committee on Financial Services.

In his letter to Frank, Cuomo said Merrill gave bonuses of at least $1 million each to 696 employees, with a combined $121 million going to the top four recipients. The next four recipients were awarded a total of $62 million, and the next six received $66 million, he said. In all, the bonuses for 2008 totaled $3.6 billion.

"While more than 39,000 Merrill employees received bonuses from the pool, the vast majority of these funds were disproportionately distributed to a small number of individuals," Cuomo wrote. "Indeed, Merrill chose to make millionaires out of a select group of 700 employees."

The attorney general said Merrill "awarded an even smaller group of top executives what can only be described as gigantic bonuses."
Cuomo also claimed Merrill handed out the bonuses ahead of its federally funded acquisition by Bank of America, which was announced in mid-September and closed by year's end.

It "appears that, instead of disclosing their bonus plans in a transparent way as requested by my office, Merrill Lynch secretly moved up the planned date to allocate bonuses and then richly rewarded their failed executives," Cuomo wrote.

Bank of America has received $45 billion in federal bailout money, including $20 billion to support its takeover of Merrill. Bank of America reported a net loss of $1.79 billion for the fourth quarter. Merrill reported a net loss of $15.31 billion for the fourth quarter. (CNN)

So there you have it! The TARP funds are getting handed out as million dollar bonus money. People getting rewarded for running banks into the ground & take taxpayer money to celebrate the whole ordeal! Did we get screwed big time or what?
I hope they nail the bastards.


Christopher said...

On a personal note, I'm anxious to see the list of 52,000+ Americans who have Swiss bank accounts when it is revealed next week.

If I were a betting man, I would put a $20 on at least a few of the banking executives names appearing on the list.

Fran said...

It's not Obama's fault the first wave of TARP money- in fact the creation of TARP happened in the bush regime... but it's never too late to impose retroactive rules & regulations.
If the banks don't want strict oversight, they can give back the billions.
You are right! Those bank insiders know better than to put their money in US banks!
I'm curious to know if "W" , Cheney, & Blackwater have some money stashed away in Swiss banks too.

They need to fully prosecute to send a message to the high finance swindlers.

Looks like Michael Moore's next movie is going to be based on this topic- his web site is calling for anyone with knowledge in the inner dealings of Wall Street high finance & Banking to tell their story.

Spadoman said...

WOW! Makes today's post at the Round Circle where I complain about a $21.16 pay phone call look rather weak!

In the new stimulus bill, there is a home buyers tax credit refund of $8000.00. I didn't know about this when I made an offer on a place last month. We'll close on March 20th and I'll get the $8000. in a check. But it WILL be good for the economy as I will spread the wealth and spend this money at local stores and on local services.

I wonder how much the bank execs spend back into the community and how much they invest to drive stock values up for the portfolios of their cronies?

Burlap sacks and rocks for the lot, I say.

D.K. Raed said...

I don't expect to see bush/cheney/et al on that swiss bank list. no way. you know they protected themselves in every which way so nothing is in their names. and of course it isn't illegal to have money in a swiss bank acct, it's only tax fraud if you don't disclose & declare the income it generates. so don't get too excited when you see any big names until they start tap-dancing about how their accountants screwed up & didn't file proper info returns.

as for the TARP recipients paying big bonuses, they really exploited a huge loophole. why do I get the feeling that loophole was purposefully inserted?

Send Lawyers, Guns and Money! I love Warren Zevon! Hunter Thompson told a great story of Zevon showing up at Woody Creek all pissed off about the Utah Highway Patrol effing around with him. If I can find it, I'll send it to you.

ps, Spado I think that's a first-time homebuyer tax credit?

D.K. Raed said...

Got it! Can't link, but here's the URL:

I think it was written in 2002 because he mentions the UT winter Olympics.

Fran said...

Spado~ Yep it's 1st time buyers & an $8000 CREDIT-- they fought & hashed that issue out a bunch-the GOP (not being 1st time buyers) did not want the rebate....
so in the end, they would up with the credit & garnered 3 GOP Senate votes... just enough to pass the bill.

Still something is better than nothing- Eh?

Yea DK - We can expect a flurry of "accounting oversights & honest mistakes" When all else fails, blame it on Turbo tax!

Fran said...

DK ~ Wow quite the story. Sadly both Zevon & Thompson are no longer with us. Clearly, they enjoyed each other's edginess & quirks.

enigma4ever said...

chris mentioned the Swiss Bank accounts- interesting the taxes alone that they did not pay totals approximately 750 Billion- quite a coincidence...

about the Money...the Missing Money...hmm, yes,I think in the end we need to keep Gitmo open so we have a place to send these fuckers....

great post are doing a good job over here....really covering the scum of it all with clarity...humor and wisdom...