Retreats, Parachutes, And My Little Bald Congressman

Let's talk about these AIG junkets, because I don't want to miss the outrage train. Some people are trying to make excuses for this because the company had already planned the luxury retreat, and it was for top salesman in a part of the business that was not at all part of the company's failure. Yeah, I'm going to go ahead and give a big "Who the fuck cares" on that one. At some point, when you fail so utterly that you have to ask for $85 billion from the government, you kind of shift around your executive party planning. Not to mention that they've already used most of the loan before even selling off any assets, and they ended up securing another $38 billion from the government after that. In their defense, AIG's "Blog Relations" unit says they're very very sorry and won't be holding any fun events in the near future, but I'm not in such a forgiving mood.

However, I think the bigger snake here is Richard Fuld, the head of Lehman Brothers, who should be associated with the likes of Leona Helmsley the rest of his life. The Treasury Department make a huge mistake using Lehman as a guinea pig and letting them fail, which accelerated this crisis. But Fuld hung on to $480 million in salary while his company made horrible decisions and contributed to the ruination of the financial markets.

Called on to explain why Lehman collapsed last month, Fuld began with a note of humility, saying he felt "horrible" over the demise of the 158-year-old institution. "I want to be very clear," Fuld said. "I take full responsibility for the decisions I made and for the actions I took."

In a brief speech which was heard in silence, Fuld told legislators that if he could turn back the clock he would do many things differently. As soon as he finished speaking, sparks began to fly.

The chairman of the committee held up a chart suggesting that Fuld's personal remuneration totalled $480m (£276m) over eight years, including payouts of $91m in 2001 and $89m in 2005.

"Your company is now bankrupt and our country is in a state of crisis," said Waxman, a liberal from California. "You get to keep $480m. I have a very basic question: Is that fair?"

After a long pause, Fuld said the figure was exaggerated: "The majority of my compensation, sir, came in stock. The vast majority of the stock I got I still owned at the point of our [bankruptcy] filing."

Waxman cut him off, saying that even if the figure was slightly lower, it was "unimaginable" to much of the public. "Is that fair, for a CEO of a company that's now bankrupt, to make that kind of money? It's just unimaginable to so many people."

"I would say to you the $500m number is not accurate," said Fuld. "I'd say to you, although it's still a large number, for the years you're talking about here, my cash compensation was close to $60m, which you've indicated here, and I took out closer to $250m [in shares]."

Hey, leave the guy alone, he only got $250 million that he admits to! And not only is this a matter of his CEO pay, which is annoying but kind of tangential to the problem, but while he was seeking aid from anyone and everyone, he was negotiating giant pay packages for his fellow executives.

That's behavior that makes you feel happy when you hear he was punched in the face.

From two very senior sources – one incredibly senior source – that he went to the gym after … Lehman was announced as going under. He was on a treadmill with a heart monitor on. Someone was in the corner, pumping iron and he walked over and he knocked him out cold. And frankly after having watched this, I’d have done the same too.

This would have been nice oversight for Rep. Waxman to have before the bailout bill, but I think it's worth it to both tar and feather these execs, figuratively but hopefully also literally, in front of the public. After much hounding from conservatives, Waxman will also investigate Fannie Mae and Freddie Mac to see how much they didn't have to do with this crisis.