Phil Cannella Keeps a Watchful Eye on the Federal Agencies Governing the People he Stands to Defend.
I came across this story today, and needless to say, I was not happy about what I found. It seems that the U.S. Department of the Treasury, under the leadership of Tim Geithner, allowed executive pay raises and ridiculously large pay packages at several companies that got bailouts. These companies included AIG, Ally Financial (previously known as GMAC), and our old pal General Motors.
How could anyone justify giving a raise to these executives who brought their own companies to the verge of bankruptcy, only to be bailed out at the last minute by you, the United States Taxpayer? Well the U.S. Treasury managed to justify it, and they gave these executives a pretty sweet deal.
According to a story on the Huffington Post, the Treasury approved 18 pay raises in 2012 at the companies it was overseeing during the bailouts, raises which totaled $6.2 million. In addition, they approved pay packages of at least $1 million for 68 other personnel at the bailed-out firms. So that’s at least $75 million of taxpayer money that went to reward the people who ran their firms into the ground and contributed to the larger collapse of the U.S. economy in 2008. I bet the investors who lost everything in 2008 would have loved to see a piece of that $75 million.
As it turns out, the Treasury’s “pay czar” (a special position created to oversee executive compensation during the bailouts) approved these pay packages, sometimes violating the Treasury’s own rules. After keeping a tight lid on executive pay from 2009-2011, the pay czar began playing fast and lose with taxpayer money in 2012, granting bonuses to executives who didn’t deserve them, and approving pay packages that were basically a slap in the face to the U.S. taxpayer.
Of course, I wasn’t surprised to hear this, as I’ve known for years that government regulators were in league with the companies who caused the economic collapse of 2008. And stories like this one show us how, even after the bailouts, the government is still granting special favors for these too big to fail firms.
Phil Cannella is founder and CEO of Retirement Media, Inc.
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