Friday, January 30, 2009

Dodd gets indignant, needs an english lesson

Senator Chris Dodd is getting indignant over executive compensation. From The Caucus' Kate Phillips:

Senator Dodd earlier this afternoon fired a warning shot at Wall Street firms who doled out those bonuses, despite the financial crisis and mega-bailout plan, saying they would be summoned before his committee if taxpayer money were involved in any way.

“Whether it was used directly or indirectly, this infuriates the American people and rightly so,” Senator Dodd said, referring to the
findings of an annual report released on Wednesday by the New York State comptroller. “So I say to anyone else who does it, if you do it, I’m going to bring you before the committee.”

Uh-oh... I'm sure all those highly paid executives are quaking in their boots! They may have to go before the committee!

All kidding aside, I don't see what the executives should fear.

Last fall I was convinced that The Chief Architect of The Bailout had failed with his bill... and I didn't even need to read it. But now that Dodd is getting all indignant, I felt compelled to research his "bill with safeguards." So here's the text of his "safeguard against excessive executive compensation."

SEC. 111. EXECUTIVE COMPENSATION AND CORPORATE GOVERNANCE.

(a) APPLICABILITY.—Any financial institution that sells troubled assets to the Secretary under this Act shall be subject to the executive compensation requirements of subsections (b) and (c) and the provisions under the Internal Revenue Code of 1986, as provided under the amendment by section 302, as applicable.

(b) DIRECT PURCHASES.—

(1) IN GENERAL.—Where the Secretary determines that the purposes of this Act are best met through direct purchases of troubled assets from an individual financial institution where no bidding process or market prices are available, and the Secretary receives a meaningful equity or debt position in the financial institution as a result of the transaction, the Secretary shall require that the financial institution meet appropriate standards for executive compensation and corporate governance.

The standards required under this subsection shall be effective for the duration of the period that the Secretary holds an equity or debt position in the financial institution.

(2) CRITERIA.—The standards required under this subsection shall include—

(A) limits on compensation that exclude incentives for senior executive officers of a financial institution to take unnecessary and excessive risks that threaten the value of the financial institution during the period that the Secretary holds an equity or debt position in the financial institution;

(B) a provision for the recovery by the financial institution of any bonus or incentive compensation paid to a senior executive officer based on statements of earnings, gains, or other criteria that are later proven to be materially inaccurate; and

(C) a prohibition on the financial institution making any golden parachute payment to its senior executive officer during the period that the Secretary holds an equity or debt position in the financial institution.

(3) DEFINITION.—For purposes of this section, the term ‘‘senior executive officer’’ means an individual who is one of the top 5 highly paid executives of a public company, whose compensation is required to be disclosed pursuant to the Securities Exchange Act of 1934, and any regulations issued thereunder, and non-public company counterparts.

(c) AUCTION PURCHASES.—Where the Secretary determines that the purposes of this Act are best met through auction purchases of troubled assets, and only where such purchases per financial institution in the aggregate exceed $300,000,000 (including direct purchases), the Secretary shall prohibit, for such financial institution, any new employment contract with a senior executive officer that provides a golden parachute in the event of an involuntary termination, bankruptcy filing, insolvency, or receivership. The Secretary shall issue guidance to carry out this paragraph not later than 2 months after the date of enactment of this Act, and such guidance shall be effective upon issuance.

(d) SUNSET.—The provisions of subsection (c) shall apply only to arrangements entered into during the period during which the authorities under section 101(a) are in effect, as determined under section 120.


(Emphasis mine)

Can anyone find Waldo find the safeguards? I see the part that mentions the five highest paid executives. But that's it. Furthermore, my take on this is that the Tax-Cheat-in-Chief Treasury Secretary is supposed to decide on reasonable compensation levels?

Yeah, I'm sure Geithner will do what is in the best interest of the American people and not what is in his own best interest. I'm so happy Dodd and Lieberman voted to confirm Tim "I'm above the law" Geithner!

Dodd is out of control. Don't get me wrong though... I don't want my tax dollars going to pay for Wall Street bonuses. But first things first.

Our senior Senator needs to return to kindergarten for an english lesson he never had. He needs to learn five simple words:

"I screwed up. I'm sorry."

But instead, he gets indignant... just as he did last fall when he blamed everything on Bush and didn't take one iota of blame... even though he had moved to Iowa and enrolled his daughter in school, instead of minding the ship.

Dodd is even more full of himself than Lieberman.

Tim White

7 comments:

Anonymous said...

Perhaps we need to check Opensecrets and find out how many people who got Wall Street bonuses are on the Dodd contributor list?

This is like Captain Renault finding gambling in Casablanca

Anonymous said...

those hearings in 2007 really had Countrywide shaking in their boots, now weren't they.


http://query.nytimes.com/gst/fullpage.html?res=9E01EEDE1530F930A15750C0A9619C8B63

"Senator Christopher J. Dodd, Democrat of Connecticut and the chairman of the banking committee, said he did not know if new legislation was necessary, saying regulators could addresses most excesses under existing laws".

This. Ship. Has. Sailed.

And the Committee Chairman was out in Iowa campaigning when it left.

Anonymous said...

So, let me get this straight.
The "new" Democrtic bailout is:
We print more money, we vaguely write bills, we threaten to bring the Wall Street people in front of "the committee", and we go on our merry way.
Sounds like change to me....
We keep this up and we'll all be standing in soup lines.
Pelosi, Dodd, et. al. are brilliant!

tim white said...

"Senator Christopher J. Dodd, Democrat of Connecticut and the chairman of the banking committee, said he did not know if new legislation was necessary, saying regulators could addresses most excesses under existing laws".

And in a preceding paragraph:

In a show of bipartisanship, the senators directed their sharpest questions at an official representing the Federal Reserve, which they said was obligated to check abuses in mortgage lending under two laws, one passed more than 30 years ago and one enacted in 1994.

So The Fed is at the heart of the mess and what do Dodd and Lieberman do?

Let's promote Geithner!

Dodd and Lieberman both need to go.

Anonymous said...

It's so depressing when one thinks about some of the greedy politicians that we had hoped would work for the good of the country.

Almost every day, another stone is turned over and we learn about another politician using their connections for personal profit.
Obama's pick for Secretary of Health is the latest and the powers to be say it's no big deal and that he will be confirmed.

Since leaving office, he has been working for one of his buddies who gave him a car and driver as part of his job. Imagine Tom riding around like royalty. Does he really think he is so important that he needs a driver? Imagine, he tried to screw the government, us, out of $123,000. How can this kind of person understand or really care about needs of the average American.
Supposedly he was not a lobbiest, he was an advisor and as such he failed to pay income taxes on his car and driver. If you want to make money, you hire the people that have connections to find out what legislation is in the works or who has contacts to influence legislation beneficial to your business.

Judge for yourself, see

http://news.yahoo.com/s/ap/20090131/ap_on_go_pr_wh/daschle_taxes_12

or do a yahoo search on "tom daschle tax"

Anonymous said...

They were paid a salary before and did nothing so what's the dfference. That's how they think.

Anonymous said...

I believe that a law should be passed to audit(annually) all the Senate and congress members tax returns on a federal and state level. That's a CHANGE I can live with. Just think no surprises when they get appointed etc.