The Bailout Bonanza Continues …
One man's taxes, another man's bonus.
We’ve already heard about numerous banks spending their bailout billions on executive bonuses. But this has got to be a new low. From the Financial Times:
Merrill Lynch took the unusual step of accelerating bonus payments by a month last year, doling out billions of dollars to employees just three days before the closing of its sale to Bank of America.
The timing is notable because the money was paid as Merrill’s losses were mounting and Ken Lewis, BofA’s chief executive, was seeking additional funds from the government’s troubled asset recovery programme to help close the deal.
We know what you’re thinking. More greedy bankers grabbing fistfuls of dollars while their company implodes–and sticking taxpayers with the bill. Yawn. But this is a truly audacious heist, even in this day and age.
Merrill Lynch lost more than $21 billion in ONE QUARTER last year according to the article. Yet it made sure to pay out up to $4 billion in bonuses before being swallowed up by Bank of America (with the generous help of the U.S. treasury). Now B of A says it needs more of your money because Merrill was in even worse shape than it thought. Gee, that $4 billion it gave out in bonuses could sure come in handy right about now. But because it’s gone, and it’s never coming back, the rest of us out here on “Main Street” will have to pony up. Again.
It gets worse, folks. Unbelievably, Merrill’s CEO John Thain reportedly wanted a $10 million gratuity for himself alone last year, but backed off his demands after some bad press. And that’s not the only extravagance Thain thought he was entitled to. While the firm he ran hemorrhaged billions and lurched to the brink of ruin, he thought it was a perfect time to do some redecorating. From The Daily Beast:
… just as Merrill Lynch CEO John Thain was preparing to slash expenses, cut thousands of jobs and exit businesses to fix the ailing securities firm … Thain spent $1.22 million of company money to refurbish his office at Merrill Lynch headquarters in lower Manhattan.
Stuff like this would be truly scandalous if it weren’t so damned commonplace these days. What’s really mortifying is watching the business press profess shock and indignation over these new revelations about Thain’s titanic (and we use that word in every sense) greed. Until recently, they were lauding him as one of the few good guys left on Wall Street and cheering his sale of Merrill to Bank of America as a win-win for the company and the financial system. Wrong again, guys! Now Thain and that sale have been exposed for what they really are: another well dressed grifter and another high stakes scam.
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