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Bank corruption hints at big money conspiracy
Alex Stephens
Issue date: 4/3/09 Section: Opinion
If you thought the past few weeks of banking scandals and bailout bonuses were pretty crummy, it's far from over.
A new investigation into the bonuses paid to Merrill Lynch executives in December may uncover some unpleasant truths about who is really pulling the strings of America.
Before the bank Merrill Lynch was "given" to Bank of America in September of 2008, it received $10 billion in TARP funding -- tax payer dollars provided by former Treasury Secretary Henry Paulson, Jr. of the Bush administration and Ben Bernanke, chair of the Federal Reserve. What's now being investigated is the $3.62 billion 36 percent of that TARP donation -- in bonuses awarded to executives of Lynch.
These bonuses were not retention bonuses nor were they contractual obligations like AIG's. Instead, these bonuses, claimed as performance-based, were awarded at the eleventh hour before Lynch posted a $15 billion quarterly loss, which effectively ended the company.
As Matt Renner wrote in his investigation of the issue on Truthout.org, the timing of it was very suspicious. New York Attorney General Andrew Cuomo has filed suit against the former CEO of the company, and along with Dennis Kucinich, D-Ohio, is desperately trying to find answers.
The big red flag of the issue is that the bonuses would not have been payable if they hadn't received TARP money. Was our government truly unaware of the dealings?
I doubt it.
Paulson worked it so Bank of America would buy up the stocks of Merrill Lynch backed by a $118 billion guarantee against any potential losses incurred during the transition. That money, too, comes from us.
Paulson was formerly the CEO of investment bank Goldman Sachs, a hefty beneficiary of federal bailout aid that was prevented, apparently at any cost, from going under. More to the point, though, is that Paulson was too clever to just write Lynch a $10 billion check without dictating how it was to be spent. Unless he didn't care.
A new investigation into the bonuses paid to Merrill Lynch executives in December may uncover some unpleasant truths about who is really pulling the strings of America.
Before the bank Merrill Lynch was "given" to Bank of America in September of 2008, it received $10 billion in TARP funding -- tax payer dollars provided by former Treasury Secretary Henry Paulson, Jr. of the Bush administration and Ben Bernanke, chair of the Federal Reserve. What's now being investigated is the $3.62 billion 36 percent of that TARP donation -- in bonuses awarded to executives of Lynch.
These bonuses were not retention bonuses nor were they contractual obligations like AIG's. Instead, these bonuses, claimed as performance-based, were awarded at the eleventh hour before Lynch posted a $15 billion quarterly loss, which effectively ended the company.
As Matt Renner wrote in his investigation of the issue on Truthout.org, the timing of it was very suspicious. New York Attorney General Andrew Cuomo has filed suit against the former CEO of the company, and along with Dennis Kucinich, D-Ohio, is desperately trying to find answers.
The big red flag of the issue is that the bonuses would not have been payable if they hadn't received TARP money. Was our government truly unaware of the dealings?
I doubt it.
Paulson worked it so Bank of America would buy up the stocks of Merrill Lynch backed by a $118 billion guarantee against any potential losses incurred during the transition. That money, too, comes from us.
Paulson was formerly the CEO of investment bank Goldman Sachs, a hefty beneficiary of federal bailout aid that was prevented, apparently at any cost, from going under. More to the point, though, is that Paulson was too clever to just write Lynch a $10 billion check without dictating how it was to be spent. Unless he didn't care.
Viewing Comments 1 - 2 of 2
North Denver Denizen
posted 4/03/09 @ 2:57 PM MST
Very interesting and ominous. I guess it just goes to show...in politics you must pay to play. Unless it comes to the budget- that can be all deficit spending. (Continued…)
Registered Independent
posted 4/03/09 @ 7:50 PM MST
Mr. Stephens,
Yep, the Limousine Liberals on Wall Street were some of Barak Obama's biggest campaign contributors. Not just the securities firms as you mentioned, but also a great many of their individual employees: traders, I-bankers, brokers, etc. (Continued…)
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