Where have all the task forces gone?

President Obama announced a new task force today to investigate the disappearance of the mortgage fraud task force he appointed earlier this year as well as another one he appointed in 2009.

“When duly appointed task forces vanish into thin air without a trace, this administration will not accept it,” the president said. “We expect this new task force, which will be called the Task Force Task Force, to move forcefully to accomplish its task.”

The Task Force Task Force’s mission will be made easier, the president said, because he appointed as one of it’s co-chairs the New York state attorney general, Eric Schneiderman. The New York state attorney general was also appointed co-chair of the mortgage fraud task force, which has not been seen or heard from since the president announced it during his State of the Union speech January 24.

Schneiderman said he would move “quickly” to interview himself as soon as he had a chance to familiarize himself with the circumstances of the disappearance of the mortgage fraud task force.

“We will get to the bottom of this,” Schneiderman pledged.

To show his seriousness, the president said he was reconvening the band of Navy SEALS who worked on the mission to find and kill Ban Laden in Pakistan, and putting them at the service of the Task Force Task Force. “When a group of American citizens go missing in the service of their country, we take it very seriously,” the president said. “One task force vanishing is bad enough, but two?”

Schneiderman refused to be pinned down to a timetable for the investigation. He also refused to comment on his previous insistence that he would “take action” if the mortgage fraud task force was stymied.

Schneiderman also refused to answer specific questions swirling around the mortgage fraud task force, such as why the entire mortgage fraud task force had a mere 50 lawyers when the Enron task force, convened to investigate a previous financial scandal involving a single company, had more than 100 lawyers working on it and why the mortgage fraud task force apparently still doesn’t have office space.

Schneiderman acknowledged that there are some mysteries that may be too deep for the new task force to unravel.

Was the mortgage fraud task force, aka the Residential Mortgage-Back Securities Working Group, actually a part of the earlier Financial Fraud Task Force, established November 17, 2009? Was the mortgage fraud task force actually something new, or just a PR offensive that amounted to nothing more than a repackaging of already existing efforts?

Though U.S. Attorney General Eric Holder has touted the administration’s efforts in going after financial fraud as nothing less than “historic,” the administration has yet to bring a criminal prosecution against a single major executive of a too big to fail institution. Some have questioned whether the president, who received more money from Wall Street than his Republican opponent, John McCain, really has any desire to hold Wall Street executives accountable for their actions.

Schneiderman’s investigation into the vanishing task forces may lead him right into the Oval Office to the man who appointed them.

A month before President Obama announced his new mortgage fraud task force in the State of the Union speech, the president told 60 Minutes, “Some of the most damaging behavior on Wall Street — in some cases some of the least ethical behavior on Wall Street — wasn’t illegal. That’s exactly why we had to change the laws.”

 

 

Financial Crisis / Martin Column / President Barack Obama - 04/24/2012

An Enforcer For the 99 Percent?

 California’s attorney general, Kamala Harris, has staked out the high ground in promising to hold bankers accountable and protect borrowers in the continuing foreclosure crisis.

So far she’s formed a mortgage fraud task force and walked away from the weak settlement with the banks over mortgage servicing fraud that the Obama administration and the majority of state attorney generals have been trying to foist on the public.

Then earlier this week she told the executive who oversees Fannie Mae and Freddie Mac, the federally bailed out quasi-public agencies, he should quit if he won’t consider principal reduction as a tool to help underwater homeowners.

Here’s hoping that Harris can build on the foundation she’s laid.

She has a real opportunity to set herself apart from other Democratic Party politicians, from the president to the congressional leadership and others who have opted for strong PR rather than real enforcement.

But she has her challenges ahead of her.

An ambitious politician who chaired the president’s campaign in California in 2008, Harris will have to go against the political grain if she really wants to hold bankers accountable and fight for homeowners.

Prosecuting bankers is never easy. Her agency, the state attorney general’s office, has had a woeful record on consumer protection. It’s been a long time since John Van de Kamp, when he was attorney general, launched his aggressive antitrust campaign.

As we know, bankers have been lubricating the political system to protect themselves against the consequences of the excesses. They spare no expense in hiring legal talent and defend themselves with a self-righteous fury. The legal system has had an unfortunate tendency to show great deference when the lords of the universe show up.

But as William Black, the former bank regulator turned law professor, has pointed out, it can be done. Bankers can be held accountable. It was done after the savings and loan debacle in the 1980s.

If prosecutors have the tenacity, the resources and the chops, they can go after bankers like they do gang members. First you go after the less powerful, more vulnerable players, squeezing them to gain information, and find documents to gradually build cases against the higher-ups.

Harris will be at a disadvantage without federal help – when prosecutors decide to take out a gang, they form a multiagency task forces, using all the agencies of federal, state and local officials.

We’ve seen just how disinterested the feds are in going after bankers. Local prosecutors around the country haven’t shown much stomach for the job either.

But if she is pursues her task in a determined and savvy way she will find wide and enthusiastic support among a crucial group that have become disenchanted with other politicians – the 99 percent.

If you’re in the Los Angeles and you want to hear more about this from William Black himself, he’s scheduled to participate in a stellar panel at Occupy LA at City Hall moderated by Truthdig’s Robert Scheer. Black, a law professor at University of Missouri-Kansas City, will be joined by Michael Hudson, Joel Rogers, a professor of law, political science and economics at the University of Wisconsin, and via live stream, Michael Hudson, a financial analyst who also teaches economics at UM-KC.

 

California Attorney General Kamala Harris / Martin Column / Occupy - 11/05/2011

The Scandal That Won't Go Away

Despite the efforts of our public officials and bankers to ignore it, downplay it, paper it over or make it disappear, the fraud surrounding the mortgages at the heart of the financial collapse is the scandal that won’t go away.

Two big stories breaking over the past week showed what strong legs the scandal has. First, Huffington Post reported on a series of confidential audits that showed five of the country’s largest mortgage companies defrauded taxpayers in their handling of foreclosures on homes purchased with government-backed loans.

Then the New York Times and others trumpeted an investigation of the mortgage securitization process by New York’s new state attorney general, Eric Schneiderman. This investigation won strong praise from two of the toughest watchdogs on the financial beat, Matt Taibbi at Rolling Stone and Robert Scheer at Truthdig, who portrayed Schneiderman as a hared-charging prosecutor who unlike the feds and other state attorney generals, is not intimidated by Wall Street.

But Reuters financial blogger Felix Salmon argued that confidential audits, which were turned over to the Justice Department were a much bigger story than Schneiderman’s investigation.

Until Schneiderman’s investigation bear some fruit, I think history suggests we should be skeptical of officials who claim they are going to get tough on the banks and protect consumers.

Salmon pinpoints the real significance of the Schneiderman investigation – the continuing cracks in the state attorney general’s 50-state coalition that was negotiating with the banks to settle claims of mortgage fraud. Some Republicans had already criticized the state attorney generals for being too tough on the banks, referring to a proposed settlement as a shakedown. Other critics have raised questions about whether the attorney generals are being too soft, having sat down to negotiate without having done robust investigations first to gather ammunition.

Whatever the outcome of these on-going investigations’s, the week’s news guarantees one thing – the mortgage fraud scandal, and its offspring the foreclosure scandal, are not going away any time soon.

 

 

 

 

 

 

Around the Web / Foreclosures / Martin Column - 05/19/2011

Cuomo report on bonuses: No rhyme or reason

http://www.oag.state.ny.us/media_center/2009/july/pdfs/Bonus%20Report%20Final%207.30.09.pdf

NO RHYME OR REASON:

The Heads I Win, Tails You Lose I Bank Bonus Culture
Andrew M. Cuomo

Attorney General

State of New York

NO RHYME OR REASON:
The Heads I Win, Tails You Lose I Bank Bonus Culture
Through various inquiries, the New York State Attorney General's Office has been examining the causes of last year's economic downturn. We have reviewed the failures of the credit rating agencies, the role of government regulators, the flaws of the credit default swap market, and the effects of over-leverage and fraud in the housing and mortgage markets, among others.

As part of this review we have also been examining the compensation structures employed by various banks and firms. Accordingly, over the past nine months this Office has been conducting an investigation into compensation practices in the American banking system. We have reviewed historic and current data on numerous banks' compensation and bonus plans. We have taken testimony from participants in all aspects of,the process, including bank executives who set and administer the compensation process, members of boards of directors who review company salary and bonus structures, compensation consultants who advise the companies, and the recipients of bonuses.
As one would expect, in describing their compensation programs, most banks emphasize the importance of tying pay to performance. Indeed, one senior bank executive noted recently that individual compensation should hot be set without taking into strong consideration the performance of the business unit and the overall firm. As this executive put it, "employees should share in the upside when overall performance is strong and they should all share in the downside when overall performance is weak."
But despite such claims, one thing is clear from this investigation to date: there is no clear rhyme or reason to the way banks compensate and reward their employ~es. In many ways, the past three years have provided a virtual laboratory in which to test the hypothesis that compensation in the financial industry was performance-based. But even a cursory examination of the data suggests that in these challenging economic times, compensation for bank employees has become unmoored from the banks' financial performance.
Thus, when the banks did well, their employees were paid well. When the banks did poorly,
their employees were paid well. And when the banks did very poorly, they were bailed out by taxpayers and their employees were still paid well. Bonuses and overall compensation did not vary significantly as profits diminished.
An analysis of the 2008 bonuses and earnings at the original nine TARP recipients illustrates the point. Two firms, Citigroup and Merrill Lynch suffered massive losses 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 TA~ bailouts totaling $55 billion.
For three other firms - Goldman 8achs, Morgan Stanley, and JP. Morgan Chase - 2008 bonus payments were substantially greater than the banks' net income. Goldman earned $2.3 biHion, paid out $4.8 billion in bonuses, and received $10 billion in TARP funding. Morgan Stanley earned $1.7 billion, paid $4.475 billion in bonuses, and received $10 billion in TARP funding. JP. Morgan Chase earned $5.6 billion, paid $8.69 bil1ion in bonuses, and received $25 billion in TARP funding. Combined, these three firms earned $9.6 billion, paid bonuses of nearly $18 billion, and received TARP taxpayer funds worth $45 bil1ion. Appendices A and B, attached hereto, provide further information on the 2008 earnings, bonus pools, and TARP funding for the nine original TARP recipients. We note that some ofthe nine recipients maintain that they did not request or desire TARP funding. Other banks, like State Street and Bank of New York Menon, paid bonuses that were more in
line with their net income, which is certainly what one would expect in a difficult year like 2008;
For example, State Street earned $1.8 billion, paid bonuses totaling approximately $470 million, and received $2 billion in TARP funding. Thus, the relationship between performance of the firms and bonuses varied immensely and the bonus incentive system does not appear to have been tethered to any consistent principles tying compensation to performance or risk metrics.
Historical financial filings support the same conclusions. At many banks, for example,
compensation and benefits steadily increased during the bull market years between 2003 and 2006. However, when the sub-prime crisis emerged in 2007, followed by the current recession, compensation and benefits stayed at bull-market levels even though bank performance plummeted. For instance, at Bank of America, compensation and benefit payments increased from more than $10 billion to more than $18 billion in between 2003 and 2006. Yet, in 2008, when Bank of America's net income fell from $14 billion to $4 billion, Bank of America's compensation payments remained at the $18 billion level. Bank of America paid $18 billion in compensation and benefit payments again in 2008, even though 2008 performance was dismal when compared to the 2003-2006 bull market. Similar patterns are clear at Citigroup, where bull-market compensation payments increased from $20 billion to $30 billion. When the recession hit in 2007, Citigroup's compensation payouts remained at bull-market levels - well­ over $30 billion, even though the firm faced a significant financial crisis. Appendix C, attached hereto, provides further historical data.
In some senses, large payouts became a cultural expectation at banks and a source of competition among the firms. For example, as Merrill Lynch's performance plummeted, Merrill severed the tie between paying based on performance and set its bonus pool based on what it expected its competitors would do. Accordingly, Merrill paid out close to $16 billion in 2007 while losing more than $7 billion and paid close to $15 billion in 2008 while facing near collapse. Moreover, Merrill's losses in 2007 and 2008 more than erased Merrill's earnings between 2003 and 2006.
Clearly, the compensation structures in the boom years did not account for long-term risk, andhuge paydays continued while the firm faced extinction.
Thus, rather than abiding by steady principles to guide compensation decisions year in and year out, bank executives did just the opposite by delivering high compensation every year. For example, testimony from the head of Merrill Lynch's compensation committee revealed that in 2007, Merrill changed its compensation rationale resulting in huge bonuses in it difficult year:
Q: In 2008 was Merrill Lynch looking at the bonuses as a percent of revenue?
A: No. In 2007 we diverted from that for reasons. We set out in a proxy that Merrill had
suffered substantial losses largely related to one unit of the corporation. Overall financial
performance is usually a key ingredient. We had to balance that with the need to pay our
employees in units that performed....
Q: Did there come a time in 2008 when you revisited that approach that you need to consider
having bonuses in some way reflect the economic performance of Merrill year to date?
A: I think we always looked at financial performance, but [beginning in 2007] I think we
thought it would jeopardize the long-term health of the firm - and certainly later jeopardize the franchise value of Bank of America - if we didn't pay people who performed and contributed for their performance in the face oflarge losses on legacy assets in some units....] . The information contained in the three appendices attached hereto set out, in stark terms, the failure of the compensation structures at many of our nation's largest financial institutions to follow any objective and consistent principles. To the contrary, what these statistics portray is an ad hoc system that does not come dose to meeting the goal of having employees share in the upside and the downside of their firm's performance. We emphasize that the problems we have found relate to problems with banking compensation system-wide and should not be taken as criticism of any particular individual's conduct.
We recognize, of course, that there can be situations where the distribution of profits to
employees who created real profits would be appropriate even though the overall firm may have lost money. This might be the case, for example, where one division of a firm earned large profits but another division lost profits. A principled and consistent approach would, however, balance the need to reward and retain those who created profits with the need for bonuses to reflect the overall performance of the firm. In any event, our investigations have shown numerous instances where large bonuses were paid to individuals in money-losing divisions at firms who saw either substantially reduced profits or losses in 2008.
In sum, as we seek to learn lessons from this economic crisis and repair the damage it has
wrought, it will be vital to develop and implement sound principles and rationales for executive compensation and bonuses that promote sustainable and rational economic growth. The repeated explanation from bank executives that bonuses are tied to performance in a manner designed to promote such growth does not appear to be accurate. Indeed, our investigation suggests a disconnect between compensation and bank performance that resulted in a "heads I win, tails you lose" bonus system. In other words, bank compensation structures lacked consistent principles and tended to result in a compensation system that was all "upside."

The private market place is, and should be responsible for setting compensation structures.

However, compensation packages should be designed to promote long-term, sustainable growth and actual increases in value. This would drive firms towards decision-making that promotes long-term actual growth and performance rather than the dangerous combination of short-term booked profits and blow-up deferral caused by the current bonus culture. Moreover, if market participants begin following sounder and more principled bonus systems, firms would be less susceptible to the "poaching" of their employees by other firms offering unreasonably large compensation packages. Such poaching has too often resulted in irrational bonus bidding wars that harm the entire industry by forcing firms to continually increase bonus levels and leading to a compensation system that is simply a one-way ratchet up.

This rationalization of the compensation and bonus system must be accomplished now. Hopefully, the private sector sees the problem and addresses it quickly. The private sector is the appropriate forum for such reform, and some firms have already taken steps in the right direction.

If the private sector does not act, such reform should be discussed as part of the federal regulatory reform effort, and, where appropriate, taken into account by the Obama Administration's pay czar.

APPENDIX A
-,
TARP RECIPIENTS' 2008 BONUS CHART
Below is a chart of the original nine TARP recipients for 2008 highlighting each banks earnings/losses, bonus pool, number of
employees, earnings per employee, bonus per employee, amount ofTARP funds received and the amount of bonus payments in excess
of $3 million, $2 million and $1 million.
:::$2
M__:::~lM·
Bank of America $4,000,000,000 $3,300,000,000 243)000 $16,461 $13,580 $45 B 28 65 172

.. Bank of New York Mellon $1,400,000,000 $945,000,000 42,900 $32,634 $22,028 $3 B 12 22 74

Citigroup, Inc. ($27,700,000,000) $5,330,000,000 322,800 ($85,812) $16,512 $45 B 124 176 738

Goldman Sachs Group $2,322,000,000 $4,823,358,763 30,067 $77,228 $160,420 $10 B 212 391 953

,J.P. Morgan Chase & Co.. $5,600,000,000 $8,693,000,000 224,961 $24,893 $38,642 $25 B >200 1,626

-
I,Merrill Lynch ($27,600,000,000) $3,600,000,000 59,000 ($467,797) $61,017 $10 B 1~9 696
Morgan Stanley $1,707,000,000 $4,475,000,000 46,964 $36,347 $95,286 $10 B 101 189 428
-
'State Street Corp. $1,811,000,900 $469,970,000 2~.475 $63,600 $16,505 $2 B 3 8 44
~Well§Fargo & Co:. _ $42,933,000,000) $977,500,000 281,000 ($152,786) $3,479 $25 B 7 22 62
* Wells Fargo & Company's 2008 losses include Wachovia's 2008 losses.
5
APPENDIX B
TARP RECIPIENTS' 2008 COMPENSATION SUMMARY
WITH BONUS BREAKDOWN
Below is a summary of the original nine TARP recipients highlighting the total amount of
TARP funds received by each bank, the total 2008 earnings, the total 2008 bonuses, the number of
employees receiving a bonus over a $1 mil1ion, the total number of employees and a breakdown of
the bonus' payments.
. 1. Bank of America
TARP: $45 billion ($15 billion on 10/28/08 under the Capital Purchasing
Program; $10 billion on 1/9/09 under the Capital Purchasing
Program [for Merrill Lynch]); $20 billion on 1/16/09 under the
Targeted Investment Program (1/16/09 Treasury and other
government organizations agrees to backstop $118 billion in
assets)
2008 Earnings: $4.0 billion, or $0.55 per diluted common share.
2008 Total Bonuses: $3.33 billion in cash and equity ($2.9 billion of the mixed cash and
equity bonuses were discretionary and $337 million of the mixed
cash and equity bonuses were guaranteed)
172 employees: at least $1 million
Total Workforcel: 243,000
BODUS Breakdown
.The top four recipients received a combined $64.01 million.
The next four bonus recipients received a combined $36.85 million.
The next six bonus recipients received a combined $31.39 million.
Four individuals received bonuses of $1 0 million or more and combined they received
$64.01 million.
8 individuals received bonuses of $8 million or more.
1 All Workforce numbers were taken from the companies' l(}K's for the year 2008.
6

10 individuals received bonuses of $5 million or more.
28 individuals received bonuses of $3 million or more.
65 individuals received bonuses of $2 million or more.
Overall, the top 28 bonus recipients received a combined $183.16 million.
2. Bank of New York Mellon
TARP: $3 billion
2008 Earnings: $1.4 billion, or $1.20 per diluted share.
2008 Total Bonuses: $945 million
74 employees: at least $1 million
Total Workforce: 42,900
Bonus Breakdown
The top five executives received no cash bonuses.
The remaining 12 members of the 17 member "Executive Committee" received a
combined $16 million, which is an average bonus of $1 ,333,750 a person.
Other employees, totaling 30,521 individuals, received a combined $928.57 million,
which is an average bonus of $30,424 a person.
12 individuals received bonuses of $3 million or more.
22 individuals received bonuses of $2 million or more.
3. Citigroup, Inc.
TARP:     $45 billion ($25 billion on 10/28/08 underthe Capital Purchasing
Program; $20 billion on 12/30/08 under the Targeted Investment
Program) (11/23/08 Treasury and other goverrunent organizations
agrees to backstop $306 billion in assets)
7

2008 Net Losses: $27.7 billion, or $5.59 per share.
2008 Total Bonuses:     $5.33 billion in cash and equity ($4.6 billion of the mixed cash and
equity bonuses were discretionary and $704 million of the mixed
cash and equity bonuses were formulaic)
738 employees: at least $1 million
Total Workforce: 322,800
Bonus Breakdown
11 executives received a combined $77.25 million in cash, def~rred cash, performance
vesting stock, and performance priced options.
The Senior Leadership Committee (excluding members who are also executives)
received a combined $126.26 million in cash, deferred cash, and equity.
The top four recipients received a combined $43.66 million.

The next four bonus recipients received a combined $37.47 million.

The next six bonus recipients received a combined $49.81 million.

Three individuals received bonuses of $1 0 million or more and combined they received
$33.88 million.
13 individuals received bonuses of $8 million or more.
44 individuals received bonuses of $5 million or more.
69 individuals received bonuses of $4 million or more.
124 individuals received bonuses of$3 million or more.
176 individuals received bonuses of $2 million or more.
Overall, the top 124 bonus recipients received a combined $609.10 million.
4. Goldman Sachs Group, Inc.
TARP:     $10 billion
8

2008 Earnings: $2.322 billion, or $4.47 in diluted earnings per common share
2008 Total Bonuses: $4.82 billion ($2.24 billion in cash)
oemployees received more than $884,193 in cash, but combined
cash and equity:
953 employees: at least $1 million
Total Workforce: 30,067
Bonus Breakdown
The top four recipients received a combined $45.90 million.

The next four bonus recipients received a combined $40.81 million.

The next six bonus recipients received a combined $56.40 million.

6 individuals received bonuses of $1 0 million or more and combined they received
$67.70 million.
21 individuals received bonuses of $8 million or more.
78 individuals received bonuses of $5 million or more.
95 individuals received bonuses of $4 million or more.
212 individuals received bonuses of $3 million or more.
391 individuals received bonuses of $2 million or more.
Overall, the top 200 bonus recipients received a combined $994.68 million.
5. J.P. Morgan Chase & Co.
TARP: $25 billion
2008 Earnings: $5.6 billion, or $1.37 per share
2008 Total Bonuses: $8.693 billion ($5.908 billion in cash)
9

1,626 employees: at least $1 million
Total Workforce: 224,961
Bonus Breakdown
The top four recipients received a combined $74.80 million.
The next four bonus recipients received a combined $49.18 million.
The next six bonus recipients received a combined $60.96 million.
Ten individuals received bonuses in cash and equity of $1 0 million or more and
combined they received $145.50 million.
29 individuals received bonuses of $8 million or more.
84 individuals received bonuses of $5 million or more.
130 individuals received bonuses of $4 million or more.
Over 200 individuals received bonuses of $3 million or more.
Overall, the top 200 bonus recipients received a combined $1.119 billion.
6. Merrill Lynch
TARP: $10 billion (was never drawn down by Merrill Lynch; instead, it
was given to Bank of America on 1/09/09)
2008 Net Losses: $27.6 billion, or $24.82 per diluted share
2008 Total Bonuses: $3.6 billion
696 employees: at least $1 million
Total Workforce: 59,000
Bonus Breakdown
The top four recipients received a combined $121 million.

The next four bonus recipients received a combined $62 million.

10

The next six bonus recipients received a combined $66 million.

Fourteen individuals received bonuses of $1 0 million or more and combined they

received $250 million.

20 individuals received bonuses of $8 million or more.

53 individuals received bonuses of $5 million or more.

149 individuals received bonuses of $3 million or more.

Overall, the top 149 bonus recipients received a combined $858 million..
7. Morgan Stanley
TARP: $10 billion
2008 Earnings: $1.707 billion, or $1.45 in diluted earnings per share
Total Bonuses: $4.475 billion
428 employees: at least $1 million
Total Workforce: 46,964
Bonus Breakdown
The top four recipients received a combined $73.04 million.

The next four bonus recipients received a combined $51.08 million.

The next six bonus recipients received a combined $59.62 million.

Ten individuals received bonuses of $1 0 million or more and combined they received

$146.80 million.

15 individuals received bonuses of $8 million or more.

40 individuals received bonuses of $5 million or more.

59 individuals received bonuses of $4 million or more.

11

10 1 individuals received bonuses of $3 million or more.
189 individuals received bonuses of $2 million or more.
Overall, the top 101 bonus recipients received a combined $577 million.
8. State Street Corp.
TARP: $2 billion
2008 Earnings: $1.811 billion, or $4.35 per diluted share
Total Bonuses: $469.97 million ($376.70 million in cash)
44 employees: at least $1 million
Total Workforce: 28,475
Bonus Breakdown
The top four recipients received a combined $17.88 million.

The next four bonus recipients received a combined $8.52 million.

The next six bonus recipients received a combined $10.30 million.

oindividuals received bonuses of $1 0 million or more.

oindividuals received bonuses of $8 million or more.

1 individual received bonuses of $5 million or more.

2 individuals received bonuses of $4 million or more.

3 individuals received bonuses of $3 million or more.

8 individuals received bonuses of $2 million or more.

Overall, the top 3 bonus recipients received a combined $15.15 million.
12

9. Wells Fargo & Co.
TARP: $25 billion
2008 Net Losses: $42.933 billion (includes losses from Wachovia)
Total Bonuses: $977.5 million
62 employees: at least $1 million
Total Workforce: 281,000
Bonus Breakdown
The Senior Executive Officers of Wells Fargo did not receive any bonuses

The top four recipients received a combined $17.29 million.

The next four bonus recipients received a combined $12.63 million.

The next six bonus recipients received a combined $16.14 million.

1 individual received a bonus of $5 million or more..

7 individuals received bonuses of $3 million or more.

22 individuals received bonuses of $2 million or more.

Overall, the top 7 bonus recipients received a combined $27.12 million.

Overall, the top 209 bonus recipients received a combined $197.75 million

13

APPENDIXC

TARP RECIPIENTS' HISTORICAL COMPENSATION & BENEFITS

AS A PERCENTAGE OF NET REVENUE & NET INCOME

Below are charts for the original nine TARP recipients from 2003 to the second quarter
2009 highlighting each bank's historical net revenue, compensation and benefits, compensation
as a percentage of revenue, net income, and compensation as a percentage of net income.
BANK OF AMERICA COMPENSATION & BENEFITS STATISTICS
Compensation as % orNet Revenue & Net Income
(mil.) Net
Revenue
Compo &
Benefits
Compo %
of Revenue
Net Income Compo % of
Net Income
2003 $37,886.00 $10,446.00 27.57% $10,762.00 97.06%
2004 $49682.00 $13435.00 27.04% $13947.00 96.33%
2005 $56,923.00 $15,054.00 26.45% $16,465.00 91.43%
2006 $73 804.00 $18211.00 24.67% $21 133.00 86.17%
2007 $68,068.00 $18,753.00 27.55% $14,982.00 125.17%
2008 $73976.00 $18371.00 24.83% $4008.00 458.36%
200910 $35758.00 $8768.00 24.52% $4247.00 206.45%
200920* $32774.00 $7790.00 23.77% $3224.00 241.63%
* As reported by BAC. 10-Q not yet filed with SEC.
14

BANK OF NEW YORK COMPENSATION & BENEFITS STATISTICS
Compensation as % orNet Revenue & Net Income
(mil.) Net
Revenue
Compo &
Benefits
Compo %of
Revenue
Net Income Compo %of
Net Income
2003 $4,880.00 $2,002.00 41% $1,157.00 173.03%
2004 $5 551.00 $2324.00 42% $1 440.00 161.39%
2005 $6,055.00 $2,310 or $2,549 38% or 42% $1,571.00 147.04% or
162.52%
2006 $6.838.00 $2640.00 39% $2.847.00 92.73%
2007 $11,331.00 $4,120.00 36% $2,039.00 202.06%
2008 $13 365.00 $5 115.00 38% . $1.386.00 369.05%
200910 $32060.00 $1 169.00 36% $370.00 315.95%
200920* $32 130.00 $1 153.00 36% $410.00 281.22%
Effective July 1,2007, The Bank of New York Company, Inc. and Mellon Financial Corporation
merged into The Bank of New York Mellon Corporation. Data for prior periods reflects only the
Bank of New York.
* As reported by BNY. 10-Q not yet filed with SEC.
2 2007 10-K versus 2005 10-K
15

CITIGROUP COMPENSATION & BENEFITS STATISTICS
Compensation as % orNet Revenue & Net Income
Net
Revenue
(mil.)
Compo &
Benefits (mil.)
Compo %
of Revenue
Net Income Compo %of
Net Income
2003 $71,594.00 $20,719.00 28.94%* $17,853.00 116.05%
2004 $79635.00 $22934.00 28.80%* $17046.00 134.54%
2005 $83,642.00 $25,772.00 30.81% $24,589.00 104.81 %
2006 $89615.00 $30277.00 33.79% $21 538.00 140.57%
2007 $81,698.00 I $34,435.00 42.15% $3,617.00 952.03%
2008 $53,692.00 $32,440.00 60.42% $(27,684.00) N/A
20091Q $24,521.00 $6,419.00** 26.18% $1,593.00 403.95%
20092Q*** $29,969.00 $6,359.00 21.22% $4,279.00 149.61%
* Before adjustment to align with other numbers of income statements the percentages were
26.15%,26.75%, and 26.61%, respectively.
** $6,419 reported in 10-Q. $6,235 reported in Second Quarter financial release.
***As reported by Citi. 10-Q not yet filed with SEC.
.'
16

GOLDMAN SACHS COMPENSATION & BENEFITS STATISTICS
Compensation as % orNet Revenue & Net Income
Net
Revenue
(mil.)
Camp. &
Benefits (mil.)
Camp. %
of Revenue
Net Income Camp. %of
Net Income
2002 $13,986.00 $7,037.00 50.31% $2,114.00 332.88%
2003 $16,012.00 $7,515.00 46.93% $3,005.00 250.08%
2004 $20550.00 $9652.00 I 46.97% $4553.00 211.99%
2005 $25,238.00 $11,758.00 46.59% $5,626.00 208.99%
2006 $37,665.00 $16,457.00 43.69% I $9,537.00 172.56%
2007 $45,987.00 $20,190.00 43.90% $11,599.00 174.07%
2008 $22222.00 $10934.00 49.00% $2322.00 470.89%
20091Q $9,425.00 $4,712.00 49.99% $1,814.00 259.76%
20092Q* $13,760.00 $6,650.00 48.32% $3,440.00 193.31%
* As reported by OS. 10-Q not yet filed with SEC.
17

JP MORGAN COMPENSATION & BENEFITS STATISTICS
Compensation as % o(Net Revenue & Net Income
Net
Revenue
(mil.)
Compo &
Benefits (mil.)
Compo %
of Revenue
Net Income Compo % of
Net Income
2002 $29,614.00 $10,693.00 36.11 % $2,114.00 505.82%
2003 $33,191.00 $11,387.00 34.31% $6,719.00* 169.47%
2004 $42736.00 $14506.00 33.94%. $4466.00 324.81%
2005 $54,248.00 $18,065.00 33.30% $8,483.00 212.96%
2006 $61,999.00 $21,191.00 34.18% $14,444.00 146.71%
2007 $71,372.00 $22,689.00 31.79% $15,365.00 147.67% .
2008 $67,252 22,746.00 33.82% $5,605.00 405.81%
20091Q $25,025.00 $7,588.00 30.32% $2,141.00 354.41%
20092Q** $25,623.00 $6,917.00 27.00% $2,721.00 254.21%
* Heritage JP Morgan Chase Only

** As reported by JPM. 10-Q not yet filed with SEC.

18

MERRILL LYNCH COMPENSATION & BENEFITS STATISTICS
Compensation as % orNet Revenue & Net Income
Net Revenue
(mil.)
Compo &
Benefits
(mil.)
Compo % of
Revenue
Net Income Compo % of
Net Income
2003 . $19,548.00 $9,814.00 50.20% $3,836.00 255.84%
2004 $21 500.00 $10599.00 49.30% $4436.00 238.93%
2005 $25,277.00 $12,314.00 48.72% $5,116.00 240.70%
2006 $33,781.00 $16,867.00 49.93% $7,499.00 224.92%
2007 $11,250.00 $15,903.00 141.36% ($7,777.00) N/A
2008 ($12,593.00) $14,763.00 N/A ($27,612.00) N/A
MORGAN STANLEY COMPENSATION & BENEFITS STATISTICS
Compensation as % orNet Revenue & Net Income
Net
Revenue
(mil.)
Compo &
Benefits
(mil.)
Compo % of
Revenue
Net Income Compo % of
Net Income
2002 $19,127.00 $7,933.00 41.48% $2,988.00 265.50%
2003 $17,621.00 $7,892.00 44.79% $3,787.00 208.40%
2004 $20,319.00 $9,320.00 45.87% $4,486.00 207.76%
2005 $23,525.00 $10,749.00 45.69% $4,939.00 217.64%
2006 $29,839.00 $13,986.00 46.87% $7,472.00 187.18%
2007 $28,026.00 $16,552.00 59.06% $3,209.00 515.80%
2008 $24,739.00 $12,306.00 49.74% $1,707.00 720.91%
20091Q $3,042.00 $2,082.00 68.44% ($190.00) N/A
20092Q* $5,400.00 $3,900.00 72.22% $149.00 2,617.45%
* As reported by MS. 10-Q not yet filed with SEC.
19
STATE STREET COMPENSATION & BENEFITS STATISTICS
Compensation as % orNet Revenue & Net Income
(mil.) Net
Revenue
Compo &
Benefits
Compo % of
Revenue
Net Income Compo % of
Net Income
2003 $4,734.00 $1,731.00 36.57% $722.00 239.75%
2004 $4951.00 $1 957.00 39.53% $798.00 245.24%
2005 $5,473.00 $2,231.00 40.76% $838.00 266.23%
2006 $6311.00 $2652.00 42.02% $1 106.00 239.78%
2007 $8,336.00 $3,256.00 39.06% $1,261.00 258.21%
2008 $10693.0 $3 842.00 35.93% $1811.00 212.15%
200910 $2002.00 $731.00 36.5% $476.00 15-3.57%
200920* $2 122.00 $696.00 32.8% ($3 182.00)** N/A
* As reported by STT. 10-Q not yet filed with SEC.

** Extraordinary loss as a result of the previously reported consolidation of the ABCP conduits.

20

WELLS FARGO COMPENSATION & BENEFITS STATISTICS
Compensation as % orNet Revenue & Net Income
Net
Revenue
(mil.)
Compo &
Benefits
(mil.)
Compo %
of Revenue
Net Income Compo % of
Net Income
2003 $28,389.00 $8,924.00 31.43% $6,202.00 143.89%
2004 $30059.00 $8446.00 28.10% $7014.00 120.42%
2005 $32,949.00 $10,455.00 31.73% $7,671.00 136.29%
2006 $35,691.00 $12,027.00 33.70% $8,420.00 142.84%
2007 $39,390.00 $13,368.00 33.94% $8,057.00 165.92%
2008 $41,897.00 $12,940.00 30.88% $2,655.00* 487.38%
20091Q $21,000.00 $6,494.00** 30.92% $3,050.00 212.92%
20092Q*** $22,500.00 $6,725.00** 29.89% $3,170.00 212.15%
* Does not include 2008 losses from Wachovia.

** Includes "salaries, commission and incentive compensation, and employee benefits," as

reported by the company.

*** As reported by Wells Fargo. 10-Q not yet filed with SEC.

21

Uncategorized - 03/14/2011

Around the Web: Now, They Won't

I remember when the Obama administration burst into office leading the nation in its campaign mantra: Yes we can. Later they adapted a new mantra to acknowledge how bad the economy was but how hard they were trying to fix it: It could have been worse. After the Democrats got walloped in the midterms, the president adjusted with his latest mantra: this was the best I could do.

Now his treasury secretary has offered the administration’s latest spin: No, you can’t.

Tim Geithner, the architect of so much of the administration’s no questions asked bailout of corporate America, is refusing homeowners facing foreclosure access to legal assistance to fight to save their homes, Zach Carter reports at Huffington Post.

Democrats from foreclosure-ravaged states are working on legislation that would overrule Geithner’s edict but the leadership isn’t interested.

This in spite of the massive failure of the administration’s foreclosure relief program, even when mortgage servicers are wrongfully attempting to throw people out of their homes.

According to a recent survey, banks started foreclosure proceedings against 2,500 homeowners while they were in the process of getting their mortgages modified.

When it comes to fixing the inadequate programs they’ve offered to fix the foreclosure mess, the Obama administration has offered a consistent mantra: No, we won’t.

Meanwhile, the state attorney general leading the 50-state investigation into the foreclosure scandal, Tom Miller, has some pretty tough talk.

Unlike the Obama administration, Miller comes right out and says that the mortgage principal should be reduced as part of any settlement with mortgage servicers. “One of the main tools needs to be principal reductions, just like in the farm crisis in the 1980s,” Miller said. “There should be some kind of compensation system for people who have been harmed. And the foreclosure process should stop while loan modifications begin. To have a race between foreclosures and modifications to see which happens first is insane.”

And yes he will, Miller insists, put financial criminals in jail.

Around the Web / Foreclosures / Martin Column - 12/16/2010

Lame Ducks, Bogus Excuses

Sen. Chris Dodd brought the big banks back to Capitol Hill Tuesday to hear more about the foreclosure mess.

By the end of the day Dodd, who is retiring from the Senate after presiding over the watering down of financial reform, had a novel response: he called for an investigation.

By now nearly federal agency as well as every state attorney general is already investigating the scandal, after banks disclosed the shoddy record-keeping they were using in the foreclosure process.

How hard any of these investigations is really digging is an open question. But the more the merrier, according to Dodd. He suggested it would be a first test for the systemic risk council, which was set up under the financial reform law that bears his name, along with his House colleague Barney Frank.

The systemic risk council will be made up of members of the Obama administration, led by Treasury Secretary Tim Geithner. The administration has already brushed off the foreclosure scandal, so it’s highly unlikely the council would come back later and reverse its assessment.

Meanwhile the congressional bailout monitor, now headed by former Delaware senator Ted Kaufman, issued a stern warning about the consequences of the foreclosure scandal in its monthly report. “If document irregularities prove to be pervasive and, more importantly, throw into question ownership of not only foreclosed properties but also pooled mortgages, the result could be significant harm to the financial stability,” the monitor wrote.

Not to worry, the big banks keep reassuring us. It’s just a matter of some sloppy paperwork.

The big banks’ credibility, to put it politely, is not so hot. For example, Bank of America insists that they would be doing better modifying mortgages if not for the investors standing in the way. So the investigative journalism outfit Pro Publica took a look and found out their explanation was bogus.

Around the Web / Bank of America (BoA) / Martin Column - 11/17/2010