Taxpayer money was used to prevent regulation, destroy Freddie Mac

Freddie Mac investigating Freddie Mac
February 23, 2009
Associated Press


Lawyers hired by the federal mortgage giant Freddie Mac are quietly looking into the firm's own lobbying campaign, an effort that helped snuff out proposed new regulations before the housing market collapsed.

Freddie Mac was placed under direct government control because of its massive investment losses.

The inquiry follows stories by The Associated Press that some two million dollars were paid to a Washington lobby group which then targeted 17 Republican senators to defeat a 2005 bill that would have required the firm to sell its then-lucrative mortgage portfolios. Months later, their value had plummeted.

Also under review: six-figure payments to more than 50 outside lobbying firms and political consultants, including firms connected to former Senator Al D'Amato and former Speaker of the House Newt Gingrich.

And, the use of a Washington skybox seat belonging to the lobby group by a Freddie Mac executive.

The thinking behind bonuses for CEOs of failing companies

John Thain thinks he should be paid $10 million because he didn't make a BIGGER mess at Merrill Lynch. Hmmmm. Should we also reward gunslingers who tell us that more people would have been killed if they hadn't taken steps to limit the number of their victims?

The Huffington Post published the following:

From the Wall Street Journal:

"Merrill Lynch & Co. chief John Thain has suggested to directors that he get a 2008 bonus of as much as $10 million, but the battered securities firm's compensation committee is resisting his request, according to people familiar with the situation.
"The committee and full board are scheduled to meet Monday to hear Mr. Thain's formal bonus recommendations for himself and other senior executives of the New York company. No decision has been reached, and it isn't known what Mr. Thain will recommend, but the compensation committee is leaning toward denying the executives bonuses for this year, these people said."

Reuters points out that several other Wall Street firms, including Goldman Sachs, will not be giving out bonuses to top executives this year. Though Thain's company was sold to Bank of America after losing a net $11.67 billion this year, Thain argued that it could have been worse.

From the Reuters story:

Thain has said he deserves a bonus because he helped avert what could have been a much larger crisis at the firm, people familiar with his thinking told the WSJ.


Members of Merrill's compensation committee agree with Thain that the takeover is in shareholders' best interest, but believe it would be foolish to ignore strong public sentiment against large compensation packages, the paper said, citing people familiar with their thinking.