WASHINGTON, DC - Rep.
Peter Welch is calling for top banking executives to abide by strict
compensation limits Congress intended for recipients of federal bailout money,
despite a last-minute loophole orchestrated by the Bush administration.
WASHINGTON, DC - Rep.
Peter Welch is calling for top banking executives to abide by strict
compensation limits Congress intended for recipients of federal bailout money,
despite a last-minute loophole orchestrated by the Bush administration.
During last-minute negotiations leading up to the passage of the $700 billion
Emergency Economic Stabilization Act in October, Treasury Secretary Henry
Paulson insisted on a one-sentence change that effectively mooted any caps on
executive compensation to banks receiving money through the Troubled Asset
Relief Program, according to the Washington Post. Additionally, the Associated Press reported Sunday
that TARP recipients doled out nearly $1.6 billion in salaries and bonuses to
top executives last year.
In response, Welch has rallied 22 members of Congress to insist that banks
receiving federal bailout funds curtail executive spending.
"It is unacceptable for banking executives to pad their pockets with
massive bonuses and benefits after mismanaging their companies and coming to
the American taxpayer for aid," Welch said. "The American people
acted in good faith during the financial industry's time of need, and now it's
time for banking executives to take responsibility for their actions and
curtail their outrageous compensation practices."
A letter Welch sent today to CEOs of eight top banks receiving bailout funds is
attached and copied below. Twenty-two members of Congress signed on to the
letter.
December 16, 2008
Mr. John J. Mack
Chairman and Chief Executive Officer
Morgan Stanley
1585 Broadway
New York, NY 10036-8200
Dear Mr. Mack,
As Members of Congress acutely
concerned with taxpayer protection, we were shocked to learn that companies
currently participating in the Troubled Asset Relief Program (TARP) are able to
skirt executive compensation limits included in the Emergency Economic
Stabilization Act (EESA) using a loophole inserted into the legislation by the
Bush administration late in bill negotiations, as detailed in the 12/15/2008
Washington Post.
These taxpayer protections are
essential to ensuring balance in and the success of the TARP, and we urge you
to voluntarily abide by the executive compensation limits contained in the EESA,
starting by renouncing bonuses for all your top executives.
The people we represent vehemently
object to the use of their taxpayer dollars, directly or indirectly, to pay
bonuses to executives at institutions receiving federal bailout money.
We note that Goldman Sachs, the
recipient of $10 billion in bailout funds, recently renounced bonuses for its
top executives.
We urge you to do the same,
voluntarily and immediately.
Reviving our economy will take hard
work, cooperation, and shared sacrifice. It would be a very good signal to the
American taxpayers that you agreed, which you can demonstrate by following the
Goldman Sachs example.
Sincerely,
Peter Welch
Member of Congress
Other members who have signed on include:
John Olver
David Wu
Peter Visclosky
Carol Shea-Porter
Peter DeFazio
James McGovern
Bruce Braley
Lois Capps
Steve Cohen
Maurice Hinchey
Gabrielle Giffords
Donald Payne
Ellen Tauscher
Janice Schakowsky
Michael Michaud
Donna Edwards
Phil Hare
Linda Sanchez
Rosa DeLauro
Patrick Kennedy
Rush Holt
Timothy Bishop
Recipients of the letter include:
Vikram Pandit - Citigroup
James Dimon - JP Morgan Chase
John Stumpf - Wells Fargo
Kenneth Lewis - Bank of America
John Mack - Morgan Stanley
John Thain - Merrill Lynch
Ronald Logue - State Street
Robert Kelly - Bank of New York Mellon
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