Tag Archives: Financial Crisis Inquiry Commission

Who Says Crime Doesn’t Pay?

12 Monday Apr 2010

Posted by in AIG, bailout, economy, Financial Crisis, financial reform, financial regulation, Politics, too big to fail, Wall Street

≈ Leave a comment

Tags

, , , , , ,

Who says crime doesn’t pay? If you happen to be a bankster or the crook who caused the collapse at AIG which, but for $182 billion courtesy of that never-ending ATM known as the American taxpayer, nearly led to the meltdown of our entire financial system, it pays like a Las Vegas slot machine. Consider the cases of Charles Prince, former Citigroup CEO, and Joseph Cassano, former head of AIG’s Financial Products Unit.

At last week’s Financial Crisis Inquiry Commission hearings Prince expressed his regret:

“I’m sorry that the financial crisis has had such a devastating impact on our country. I’m sorry for the millions of people, average Americans, who have lost their homes. And I’m sorry that our management team, starting with me, like so many others, could not see the unprecedented market collapse that lay before us.”

But not sorry enough to give back any of his ill-gotten gain from 2007 (emphasis added) :

“Prince, arguably the person most responsible for Citigroup’s enormous problems, can expect at least a $12.5 million cash bonus, compared with last year’s cash payout of $13.8 million.

And as he awaits his official retirement next month, Prince can rest assured that he will leave with $68 million, including his salary and accumulated stockholdings; a $1.7 million pension; an office, car and driver for up to five years — all in addition to the bonus. That is on top of $53.1 million he has taken home in the last four years, a period when $64 billion in the company’s market value has evaporated.”

However, Mr. Prince is a pauper compared to the HCIC (head crook in charge) at AIG, Joseph Cassano:

“Joseph Cassano was the head of AIG’s Financial Products Unit. They are the ones that made about a trillion dollars worth of bets in credit default swaps. They lost.

So, what happened to Cassano? This was all his idea and his team that brought on this colossal collapse. Well, he was fired! Great, justice served…Oh, did I forget to mention one thing? He received $35 million in bonuses when he was let go.”

…When they lost the bets, their company was devastated. Completely and utterly bankrput. The failure was so large, it promised to drag down the rest of the global economy with it. This forced the government to step in and cover their losses. So far, the United States taxpayers have put in $182 billion to keep AIG afloat.

That 35 mil was only tip money for Cassano:

“How much did he make for himself from 2000 to 2008 by gambling with the company’s money? Only $280 million…In the end, he walked away with over $315 million for destroying the company and maybe the whole economy.”

All that and no accountability required:

“This week the Wall Street Journal reported that prosecutors will likely not charge him with fraud. They are not going to try for clawbacks to get some of the money back. In the end, he gets away scott-free. But it’s better than free, he gets to keep all the money he never really made in the first place…”

The best way to rob a bank is to become a banker.

Advertisement

Rubin May Testify Before Financial Crisis Commission

27 Saturday Feb 2010

Posted by in economy, Financial Crisis, Obama, Politics, Wall Street

≈ 1 Comment

Tags

, , , , , ,

One of the architects of the financial meltdown, and the Godfather of the Obama economic team, might have some ‘splainin’ to do. From Bloomberg:

“Robert Rubin, the former U.S. Treasury secretary who later advised Citigroup Inc. as the bank piled up subprime-mortgage losses, may soon face his first public grilling on the 2008 financial crisis.

The Financial Crisis Inquiry Commission investigating the worst economic slump since the Great Depression, plans to ask Rubin to testify in April, said two people with knowledge of the commission’s decisions.

Ask? How about subpoena?

“Rubin’s reputation dimmed  after the U.S. bailed out New York-based Citigroup with $45 billion and AIG had to be propped up because of losses on derivatives. When Rubin was President Bill Clinton’s Treasury secretary, he fought efforts to regulate derivatives.”

His reputation dimmed? Barack Obama didn’t get that memo:

“[Obama] named Rubin to be an economic adviser during the 2008 presidential campaign, and two Treasury protégés, Lawrence Summers and Timothy Geithner are top officials in the White House. Summers, 55, is chief economic adviser and Geithner, 48, is Treasury secretary.”

And that’s not all:

“Just below Summers is Jason Furman, who worked for Rubin in the Clinton White House and was one of the first directors of Rubin’s Hamilton Project.

And as head of the powerful Office of Management and Budget, Obama named Peter Orszag, who served as the first director of Rubin’s Hamilton Project.”

…to serve alongside Furman at the NEC [Obama hired] management consultant Diana Farrell, who worked under Rubin at Goldman Sachs. In 2003, Farrell was the author of an infamous paper in which she argued that sending American jobs overseas might be “as beneficial to the U.S. as to the destination country, probably more so.”

…Over at the Commodity Futures Trading Commission, which is supposed to regulate derivatives trading, Obama appointed Gary Gensler, a former Goldman banker who worked under Rubin in the Clinton White House. Gensler had been instrumental in helping to pass the infamous Commodity Futures Modernization Act of 2000, which prevented regulation of derivative instruments like CDOs and credit-default swaps that played such a big role in cratering the economy last year.