While they were taking from others, raiding the coffers of corporate treasuries, people suffered throughout the nation. And, even now, they are circling like vultures to pick at the carcasses of their victims.
First, we learn from The Wall Street Journal about "Wall Street’s $10 Million Men":
As bad as 2008 was for Merrill Lynch & Co., it was very good for Andrea Orcel, the firm’s top investment banker. Although Merrill’s net loss ballooned to $27.6 billion last year, Mr. Orcel, 45 years old, was paid $33.8 million in cash and stock, just shy of his pay in 2007.
Former executive Peter Kraus got $29.4 million in cash and stock in 2008.
While Merrill staggered, 11 top executives were paid more than $10 million in cash and stock last year, say people familiar with the situation. An additional 149 received $3 million or more. The stock awards, which accounted for much of the compensation, have fallen sharply in value since they were made last year.
New York Attorney General Andrew Cuomo has subpoenaed information about Merrill’s highest-paid employees in connection with his probe into $3.6 billion in bonuses paid by Merrill in the days before it was taken over by Bank of America Corp. Thus far, Bank of America hasn’t turned over the names of Merrill’s highest-paid executives, claiming it would help rivals woo its top talent.
The Wall Street Journal has identified most of the top 10 executives and their compensation levels from documents and interviews with people familiar with Merrill’s compensation. Merrill’s 10 highest-paid employees got a total of $209 million in cash and stock in 2008, up slightly from $201 million paid to the top 10 a year earlier, according to the figures reviewed by the Journal. In 2007, 28 Merrill employees were paid more than $10 million. That total doesn’t include Merrill’s private-client group, where its brokers work
So, while their institution was tanking–which led Merrill to be sold to Bank of America, which in turn took taxpayer money to try to help cover the bad balance sheet of Merrill–these guys were lining their pockets.
Then, there were the vultures who preyed on millions of home owners. Perhaps the biggest home for the vultures was Countrywide Financial. And no one better represented the greed than Angelo Mozilo, the CEO of Countrywide Financial. Mozilo built a massive company, from virtually nothing to a $200 billion colossus that more than doubled its market share in just five years, from 5.8 percent to 13.5 percent. And on the backs of the desperate homeowner, Mozilo made a fortune, mainly on huge annual stock option grants. Since 1984, he pocketed $406 million by cashing in his options; he never showed much faith in his own company, failing to buy a single share on his own since 1987. Instead, he was simply a leech on the company’s equity. Indeed, as the company hit the rocks during the mushrooming subprime crisis in 2007, Mozilo was bailing out, making sure he would not take the financial hit facing hundreds of thousands of his costumers: he pocketed a third of his $406 million overall stock options sales in just 12 months dating back to mid-2006.
Mozilo, in fact, kept up his personal enrichment, even as his company was stumbling even worse. By the end of 2007, as the company’s crisis accelerated, he had tucked away $121.5 million in 2007 by exercising stock options. He also banked $22.1 million in pay—in a year when the company lost $704 million, its shares slid 79 percent and it cut 11,000 workers from its payroll. So, while the customers, shareholders and workers of Countrywide were taking a major hit, Mozilo was flying high.
Mozilo tries to argue that he was just a victim of a market gone bad. This is a lie. As The New York Times told us:
"In terms of being unresponsive to what was happening, to sticking it out the longest, and continuing to justify the garbage they were selling, Countrywide was the worst lender," said Ira Rheingold, executive director of the National Association of Consumer Advocates. "And anytime states tried to pass responsible lending laws, Countrywide was fighting it tooth and nail."
And, now, we learn today that his sidekicks have actually gotten into a business where they will profit from the distress they created:
Ex-Leaders of Countrywide Profit From Bad Loans
By ERIC LIPTON
CALABASAS, Calif. — Fairly or not, Countrywide Financial and its top executives would be on most lists of those who share blame for the nation’s economic crisis. After all, the banking behemoth made risky loans to tens of thousands of Americans, helping set off a chain of events that has the economy staggering.
So it may come as a surprise that a dozen former top Countrywide executives now stand to make millions from the home mortgage mess.
Stanford L. Kurland, Countrywide’s former president, and his team have been buying up delinquent home mortgages that the government took over from other failed banks, sometimes for pennies on the dollar. They get a piece of what they can collect.
"It has been very successful — very strong," John Lawrence, the company’s head of loan servicing, told Mr. Kurland one recent morning in a glass-walled boardroom here at PennyMac’s spacious headquarters, opened last year in the same Los Angeles suburb where Countrywide once flourished.
"In fact, it’s off-the-charts good," he told Mr. Kurland, who was leaning back comfortably in his leather boardroom chair, even as the financial markets in New York were plunging.
As hundreds of billions of dollars flow from Washington to jump-start the nation’s staggering banks, automakers and other industries, a new economy is emerging of businesses that hope to make money from the various government programs that make up the largest economic rescue in history.
They include big investors who are buying up failed banks taken over by the federal government and lobbyists. And there is PennyMac, led by Mr. Kurland, 56, once the soft-spoken No. 2 to Angelo R. Mozilo, the perpetually tanned former chief executive of Countrywide and its public face.
This is obscene. It’s immoral. A guy who already made millions from preying on people is at the trough again, taking a second bite out of peoples’ lives that he personally wrecked.
It’s, unfortunately, entirely legal.
The problem is that we do not have a legal system, or political leaders, who really want to hold people accountable. Among the options here are two:
Maxine Waters, on HBO’s Bill Maher, declares, "we aren’t going to change anything until we put some people in jail". You can see it here at about the two-minute mark:
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Maher had his own suggestion during that same show, which is perhaps extreme: Hang the bankers (at about the two-minute mark):
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Pick your choice. But, there needs to be a public accounting–perhaps a "Truth Commission"–that lays bear who caused the crisis. At the very least, the price they need to pay is to be barred from having any leadership role in a company in the future.
