Obama & Dodd - A great team

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Well hellsbells if there's anyone who knows how to extract money from C.E.O.s — it's Christopher Dodd.

Obama Calls Bonuses ‘Shameful’ as Dodd Vows to Reclaim Money

By Dawn Kopecki and Julianna Goldman

Jan. 29 (Bloomberg) -- President Barack Obama fed a swelling populist revolt against Wall Street bonuses, calling it “shameful” that banks doled out $18.4 billion as taxpayers bail out companies and the U.S. remains mired in a recession.

The bonuses are “the height of irresponsibility,” Obama said today before meeting Treasury Secretary Timothy Geithner and Vice President Joe Biden at the White House. Firms need to “show some restraint and show some discipline,” Obama said.

The president joined politicians such as Senator Christopher Dodd, who today called for using “every possible legal means to get the money back.” The bonus pool for 2008 by New York City financial companies was the sixth-largest ever amid record losses in the securities industry, State Comptroller Thomas DiNapoli said in a report yesterday.

Banks and financial firms have fired 265,000 people since the collapse of the subprime mortgage market triggered the worst financial crisis since the Great Depression. Bear Stearns Cos. and Lehman Brothers Holdings Inc. collapsed, while Merrill Lynch & Co. was taken over by Bank of America Corp. and Goldman Sachs Group. and Morgan Stanley converted into bank holding companies. The Treasury Department program has injected about $200 billion into banks across the country from the Troubled Asset Relief Program.

‘Political Posturing’

Dodd, a Connecticut Democrat who heads the Senate Banking Committee, vowed at a press conference at the Capitol to go beyond condemnation and seek a return of bonuses.

“I’m going to be urging -- in fact not urging, demanding -- that the Treasury Department figures out some way to get the money back,” Dodd said. “This is unacceptable.”

The senator said he will force executives whose companies received taxpayer aid to testify before his committee to explain their bonuses.

Former Salomon Brothers Inc. Chairman John Gutfreund dismissed Dodd’s comments, calling it “political posturing” in an interview with Bloomberg Television. “They are not going to repay all their bonuses,” said Gutfreund, 79.

Treasury has the authority under legislation that created the TARP to issue regulations that “claw back” excessive executive compensation, said Larry Hamermesh, a corporate law professor at Widener University in Wilmington, Delaware.

Cuomo Targets Thain

“It was pretty clear from TARP I that the secretary of the Treasury was supposed to establish a provision for executive clawback,” Hamermesh said in a phone interview. “How the secretary has implemented that isn’t clear.”

The Treasury could require companies that request additional funds to repay excessive bonuses as a condition of the further financing, Hamermesh said.

“If they come around to ask again, they could say we’re going to deny it unless they cough up the bonuses,” he said.

New York Attorney General Andrew Cuomo said on Jan. 27 that he subpoenaed former Merrill Lynch Chief Executive Officer John Thain for information about bonuses Merrill paid just before its acquisition by Bank of America. Thain said that he had kept the Charlotte, North Carolina-based bank informed about the brokerage’s finances and compensation.

Treasury agreed this month to provide $20 billion in capital and $118 billion in asset guarantees to Bank of America to help it absorb losses at New York-based Merrill.

Job Losses

Employment in New York City’s securities industry fell to 168,600 in December 2008 from 187,800 in October 2007, a decline of 19,200 jobs, or 10.2 percent, DiNapoli’s report found.

The state will have lost as many as 225,000 jobs and $6.5 billion in securities industry-related tax revenue by Oct. 31, DiNapoli has said. Positions eliminated in the financial industry alone may total 38,000 by then, he said.

Vice President Biden said in an interview on CNBC today that he would “like to throw these guys in the brig” for taking excessive bonuses.

“They are thinking of the same old thing that got us here: Greed,” Biden said. “They are thinking: Take care of me.”

Dodd said the Obama administration may soon request the second half of the TARP funds to bolster the U.S. housing market. He said that will be difficult to get through Congress if the new administration doesn’t restrain Wall Street’s spending.

“You’re never going to get any support for the continued tough decisions we have to make if this kind of behavior continues,” Dodd said. “We can’t be underwriting to the tune of billions of dollars, whether it was used directly or indirectly. This infuriates the American people.”

Dodd also said today that he may seek a 90-day moratorium on home foreclosures as part of the economic stimulus bill.

To contact the reporters on this story: Dawn Kopecki in Washington at dkopecki@bloomberg.net; Julianna Goldman in Washington at goldman6@bloomberg.net

http://www.bloomberg.com/apps/news?pid=new...id=anzJooSeABDM

January 29, 2009, 4:00 a.m.

Dodd’s Guide to Clean Livin’

Stall, and hope they forget.

By Mark Hemingway

It’s been over seven months since it was revealed that Senate Banking Committee chairman Christopher Dodd (D., Conn.) got a sweetheart deal on his Washington, D.C., townhouse directly from Angelo Mozilo, the CEO of troubled subprime-mortgage lender Countrywide Financial. Participating in the “Friends of Angelo” program saved Dodd about $75,000 on his mortgage, and raised more than a few eyebrows about whether Dodd should be accepting such hefty gifts from entities he’s tasked with overseeing and regulating.

Since the scandal broke last June, no action has been taken by the Senate to formally ascertain if Dodd engaged in any wrongdoing. Nor has Dodd tried to clear his name in any way. What’s troubling about Dodd’s scandal isn’t so much that it remains unresolved but that it’s a textbook example of how scandals in Washington are swept under the rug. Indeed, Dodd’s behavior follows an utterly predictable pattern. Thus, National Review Online presents the Christopher Dodd Guide to Managing Political Scandal:

Step 1: Proclaim your innocence.

Even though an obvious conflict of interest—or even the appearance of one—causes most responsible members of the judiciary to recuse themselves from making legal rulings, very few conflicts of interest are too great to keep members of Congress from writing new laws and regulations—no matter how personally beneficial. In this case, Dodd accepted some $20,000 in campaign donations from Countrywide in addition to receiving a $75,000 mortgage break.

But should a congressman be accused of unethical behavior, the first step in any PR offensive is to proclaim his innocence. Whether what he has done is right or wrong is immaterial, as he probably hasn’t violated any laws. He’d have to be found in violation of Senate ethics rules, and, well, you’d have better luck playing Powerball.

In this case, Dodd didn’t even really try to hide his impropriety. “There ain’t much to the story,” he told the Hartford Courant. Well, if there’s anything to the story, doesn’t the public have a right to know what it is?

Step 2: Promise exculpatory evidence. Don’t keep that promise.

While it’s been seven months since the “Friends of Angelo” scandal broke, it’s been exactly 188 days since Dodd promised to release all of his pertinent mortgage documents to the public. In July of last year, Dodd told a reporter at the Courant: “Yeah, we will [release the mortgage documents] in some time.” In September he told the same reporter, “At some point I’ll get to it.” In late October, he again told the dogged Courant staffer, “Not right now. No.” That was followed by a statement from his aides saying Dodd “will release them, and he still intends to do that. He intends to do that, not at this time.” As recently as this past weekend, he told a crowd at a forum on health-care event that “at some point soon we’ll do it.”

Perhaps Dodd needs to define “soon.” Does that mean another six months?

Of course, his stalling here is just the preferred tactic for managing the media coverage of the scandal. “It’s hard for people in the media to keep writing stories when there’s nothing new to report. Which of course they count on. You get through the bad news cycle and there’s nothing new to report and people can’t keep writing the same thing every day,” Melanie Sloan, executive director of Citizens for Responsibility and Ethics in Washington, told National Review Online. “The pressure fades and people in Dodd’s position know their constituents forget about it.”

Step 3: Hide Behind Your Fellow Congressmen.

One of the excuses Dodd has given for not releasing his mortgage papers is that they are under review by the Senate Ethics Committee.

“This excuse that the ethics committee is looking at them does not preclude him from releasing the documents,” Sloan said. “What precludes him from releasing the documents is that there’s going to be more stories about him and it might not look so good.”

While the press and constituents badger Senator Dodd to account for his mortgage, Dodd insists that he doesn’t need to be held publicly accountable because his peers in the Senate are going to make sure that everything is on the up and up.

So when is the Senate Ethics Committee expected to pass judgment on Dodd, you ask?

“Who knows? It’s the Ethics Committee. They never say anything and they take forever to do anything. They try and do it as far away from when an issue actually happens so there’s a possibility everyone will have forgotten it,” Sloan said. “They’re not exactly known for their speed or for taking direct action. They give everyone a pass.”

The problem isn’t just the Ethics Committee, however. It’s Congress itself. “Members of Congress never go after each other’s ethics, ever. You have to have done something as awful as Bob Packwood or have been convicted of a crime like Stevens,” Sloan said. “You have to remember even with [Alaskan Republican senator Ted] Stevens, who was accused of more serious things such as misusing his office for personal gain—even Harry Reid, the Democratic leader, was saying ‘He’s a longstanding member, we’ll wait for the process.’”

“Don’t expect them to do anything with Dodd other than to use it as a ‘teaching moment’ to remind members that the Senate gift rules include loans. I can practically write the letter myself,” she said with palpable disgust.

Step 4: Wait Until Everyone Forgets.

While the Hartford Courant—the biggest paper in his home state—has pursued Dodd’s scandal with zeal, the story has already all but vanished from the national media. Initially, many major media outlets, such as the New York Times, condemned Dodd’s alleged malfeasance; but with no new revelations to report, the story has withered.

That Dodd was questioned again this weekend about his mortgage deals was reported only by the Courant. The pressure from the tenacious Courant has resulted in disapproval among Dodd’s constituents. According to Quinnipiac, last month Dodd registered his lowest approval rating in 14 years. However, with no strong contender for his seat and almost two years until the next election, Dodd is unlikely to be held accountable. That the scandal was ever in the national news at all was only because of Dodd’s Banking Committee chairmanship, which made the conflict of interest so brazen it couldn’t be ignored. Otherwise it would likely have gone completely unremarked.

Just ask Sen. Kent Conrad (D., N.D.). “It’s interesting you only hear about Dodd. Conrad had two mortgages with those people [the ‘Friends of Angelo’ program],” Sloan said.

And indeed, Senator Conrad’s role in the scandal has gone straight down the memory hole. So next time you wonder how members of Congress get away with lining their pockets as they run the country into the ground, remember it’s a simple four-step formula—and one that relies on your forgetting you knew it existed in the first place.

http://article.nationalreview.com/?q=MWIyY...DVmYzRkYzI1OGQ=

For the record, Mr. President and all you shameless members of Congress: If you permitted these losers to fail, i.e. take the consequences for their irresponsible, incompetent and stupid business decisions, and not reward them handsomely financially for such behavior, you might actually stand a better chance of improving the economy. Instead, you are facilitating a generation of looters in the business world, ready, willing, and able to work with the looters in government.

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They are making a terrible mistake with this issue. There's more to this story than shows on the front page.

Let me get this straight....

1 trillion v/s 18.4 billion (much of which came prior to bailout)

Pot and kettle livin' the life.