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Tuesday, October 20, 2009

Banks, Wall Street, & President Obama

Today's Washington Post today examines further instances of big bank executives receiving perks and bonuses funded by taxpayer bailouts:
Even as the nation's biggest financial firms were struggling and the federal government was spending hundreds of billions of dollars to save many of them, the companies as a group were boosting the perks and benefits they pay their chief executives.

The firms, accounting for more $350 billion in federal bailout funds, increased these perks and benefits 4 percent on average last year, according to an analysis of corporate disclosures filed in recent months.

Some chief executives, such as Kenneth D. Lewis of Bank of America and Jeffrey M. Peek of CIT Group, the major small-business lender now on the brink of bankruptcy, each received about $100,000 more than a year earlier for personal use of corporate jets. Others saw an increase in the value of chauffeured services, parking or personal security.

Ralph W. Babb Jr., chief executive of Dallas-based lender Comerica, was compensated for a new country club membership, with an initiation fee and dues of more than $200,000. GMAC Financial Services chief executive Alvaro de Molina benefited from a $2.5 million payment from his company to help cover his personal tax bill.
And despite consistently railing against these practices, President Obama is headed to New York tonight to get some of that money back, in the form of a check made out to the Democrat's campaign committee (emphasis ours):
At separate events in New York City, the president will raise money both for Bill Owens, a Democrat trying to win a special election in an upstate New York congressional district, and for the Democratic National Committee. The national party fundraising event alone is expected to generate between $2 million to $3 million.

Beyond a $30,400-per-couple dinner for the DNC, Obama will attend a health care rally with tickets starting at $100. His comments at that event will be pumped live via webcast to house parties around the nation, where supporters plan to call voters and ask them to lobby Congress to pass a health care reform bill.

The scale of the DNC fund-raiser has raised some eyebrows, given that executives from firms who benefited from the administration's bailout may be attending the event.

Last weekend, top administration officials criticized the size of Wall Street bonuses. Chief of Staff Rahm Emanuel told CNN that "Wall Street is back doing what Wall Street did."

The New York Times reported Tuesday that about half-dozen bankers from financial giants like Goldman Sachs, JPMorgan Chase and Citigroup that received federal money are expected to attend the fundraiser.

Former House Speaker Newt Gingrich told NBC's TODAY show on Tuesday that Obama's attendance is "one more example of the gap between his rhetoric and what happens in reality."

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