Powerhouse Senator Elizabeth Warren continues to school regulators and demand accountability for U.S. financial institutions. On Tuesday, Warren sent a letter to Chairman of the Federal Reserve Ben Bernanke, Attorney General Eric Holder, and Chairman of the Securities and Exchange Commission Mary Jo White, asking the regulators whether they have any evidence that a settlement that doesn’t require a bank to admit guilt is more cost-effective to the public than taking the bank to trial.
Warren asked the same question of the Office of the Comptroller of the Currency (OCC) in February at a Senate Banking Committee hearing, and received a response last week indicating that the OCC has not conducted any such research.
At the hearing in February, Warren asked regulators questions that should have been easily answerable, but brought little more than awkward, rambling, evasive responses. “I wanna ask a question about supervising big banks when they break the law… Tell me a little bit about the last few times you’ve taken the biggest financial institutions on Wall Street all the way to a trial,” Warren said.
“If they can break the law and drag in billions in profits and then turn around and settle, paying out of those profits, they don’t have much incentive to follow the law,” she asserted.
In March, Warren slammed Attorney General Eric Holder’s statement that some banks are “too big to jail“, after criticism about the Justice Department’s failure to prosecute banks. “If you’re caught with an ounce of cocaine, you’re going to go to jail,” she noted. “But if you launder nearly $1 billion for international cartels and violate sanctions, you pay a fine and you go home.”
Over the last few years, after the financial crisis and multi-trillion dollar bail-out of the global financial industry, several major U.S. banks have been permitted to get away with what amounts to a slap on the wrist, for such crimes as money laundering, committing fraud, terrorist financing, cooking their books, foreclosing on customers without just cause, and misleading and exploiting consumers, among other things.
And, while consumers and employees suffered for the mismanagement and greed of these financial institutions, CEOs and higher-ups received raises, flew to Washington in private jets to ask for bail-outs, and ultimately walked away with millions. The Daily Beast compiled a list of the CEOs from these financial institutions who walked away from their messes with more than a little compensation:
Richard Wagoner: General Motors Under his leadership, GM built inefficient SUVs that could not sell during the recession. He pleaded for a government bail-out, flying to Washington in a private corporate jet. He was removed from the company in 2009. Upon leaving he received a guarantee of $8.2 million over five years, $74,030 a year until death, and a $2.6 million life insurance policy.
Angelo Mozilo: Countrywide Financial In charge during the subprime mortgage crisis. In 2008 Countrywide’s worth went from $25 billion to about $2.5 billion, and, two years later, Mozilo received the largest fine to that date from the Security and Exchange Council (SEC) for ill-gotten gains. He left with $121.5 million in stock gains before the SEC charges.
Stanley O’Neal: Merrill Lynch Steered Merrill Lynch into the subprime mortgage arena, which cost the company $7.9 billion in write-downs. Was ousted in 2007 and left with $161.5 million.
John Thain: Merrill Lynch Took up leadership after O’Neal. In 2008, when Merrill’s write-downs climbed to $45 billion, Thain asked for a $10 million bonus from Merrill (a number that later changed to $40 million). He spent $1.22 million on a renovation of his office the same year, whilst Merrill was slashing expenses and laying off workers. He resigned in 2009 and is now working at CIT Group, where he makes a base salary of $6 million a year.
Alisha is a writer and researcher for Ring of Fire.
