Friday, March 7, 2008

It's Impossible to Shame The Shameless

While the Obama and Clinton campaigns were arguing over who called who what, something far more disturbing was occurring in Washington.

Today, the Congressional Oversight Committee held a hearing referred to as "Executive Compensation II: CEO Pay and the Mortgage Crisis" to examine the compensation and retirement packages granted to the CEOs of three corporations deeply involved in the current mortgage crisis.

If the goal of the hearing was to expose the greed and avarice of these CEOs it succeeded. However, if the goal was to shame these men or get them to acknowledge that in some way that the profitted at the expense of others, the hearing failed. These men have no consciences.

Jim Abrams of Rawstory reported:

Three corporate executives called in for a shaming by Democratic lawmakers Friday defended raking in hundreds of millions of dollars despite contributing to the subprime mortgage crisis that has their companies reeling from losses and the nation on the edge of recession.

"There's a complete disconnect with reality," said Rep. Henry Waxman, D-Calif., chairman of the House Oversight and Government Reform Committee.

But the CEOs testifying before the committee, Angelo Mozilo of Countrywide Financial Corp.; Stanley O'Neal, formerly of Merrill Lynch & Co; and Charles Prince, formerly of Citigroup Inc.; defended their pay as appropriate.

The hearing was the second held by Waxman on the issue of executive pay, which Forbes magazine said averaged $15.2 million for the CEOs in the largest 500 U.S. companies in 2006, an increase of 38 percent in one year.

He questioned how all three CEOs could profit handsomely at a time when their companies were losing billions of dollars and stock values were plunging.

"You're in the middle of an enormous debacle," Waxman said. "It seems like everyone is hurting except for you."

Committee figures showed that Countrywide suffered a $1.2 billion loss in the third quarter of 2007 and then lost another $422 million in the fourth quarter. By the end of the year, the company's stock had fallen 80 percent from its five-year peak in February. During the same period, Mozilo received a $1.9 million salary, $20 million in stock awards contingent upon performance and sold $121 million in stock.

Rep. Elijah Cummings, D-Md., questioned Mozilo's insistence — documented in a November 2006 e-mail — that he be reimbursed for taxes owed when his wife traveled on Countrywide's corporate jet.

Mozilo related how he had started Countrywide in 1969, sitting in the kitchen of his small New York apartment. He said his direct compensation and the value of his stock holdings declined substantially last year and he had not received, and will not receive, a bonus for 2007 and 2008. Mozilo also said he would give up some $37 million in severance pay if Bank of America proceeds with plans to acquire Countrywide.

Well, isn't that nice of Mr Mozilo :-)

Now, if you have the stomach for it, the following video reel has clips from today's Congressional hearing as well as other video on the subprime mortgage crisis.

Thanks to House Speaker Nancy Pelosi's office for making videos of these hearings available on YouTube.

Related posts:

Everybody Takes Advantage of An Opportunity, Right?

We're A Long Way From Bedford Falls

Are You Preparing For A Recession?

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