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TARP-Funded Banks Kept Awarding Bonuses

Firms paid more than they made: Cuomo

By Nick McMaster, Newser Staff

Posted Jul 30, 2009 12:52 PM CDT

(Newser) – The financial crisis and government bailouts did little to change Wall Street’s executive compensation habits, New York's attorney general says. All nine banks given assistance by TARP paid out bonuses in 2008—well before any paid back government loans, according to a survey ordered by Andrew Cuomo. Goldman Sachs, Morgan Stanley, and JPMorgan Chase actually paid more in bonuses than the firms made for the year, the Wall Street Journal reports.

The report, "No Rhyme or Reason: The ‘Heads I Win, Tails You Lose’ Bank Bonus Culture," says Goldman, for example, paid $4.8 billion in bonuses in 2008 but earned only $2.3 billion. The firm received $10 billion in TARP funds. Citigroup's yearly losses topped $27 billion, but the bank nonetheless paid out $5.3 billion in bonuses, greased by $45 billion in bailout money.

[Images (2)]

[Quotes (1)]

In this Feb. 11, 2009 file photo, NY Attorney General Andrew Cuomo announces the the arrest of twelve individuals and the shutting down of a Bronx-based criminal enterprise in a vehicle theft ring. (AP Photo/Louis Lanzano, File)

In this June 12, 2007 file photo, the building on Broad Street in New York's Financial District that houses brokerage firm Goldman Sachs, is shown. (AP Photo/Richard Drew, file)

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When the subprime crisis emerged in 2007, followed by the current recession, compensation and benefits stayed at bull-market levels even though bank performance plummeted.
- Andrew Cuomo, NY Attorney General

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COMMENTS

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Showing 3 of 9 comments

bewilderbeast

Aug 5, 2009 8:26 AM CDT

True, Bryanw55, the good guys. Problem is we need regulation for the big guys. How do we regulate against thieving when their lobbyists and lawyers write thieving laws and pay politicians to pass them and then pay PR companies and TV stations and newspapers to spin the little man into believing in them! Some of the fiercest defenders of big business are little guys who don't even know they're being robbed blind! Radnip has the solution: We, the voters, have to get away from party politics and start voting in good people; We, the people have to start speaking up and out against the system as it exists. Here's hoping the internet (hey, and fight against any business takeover of the net!) remains an aid to that.

psycada

Jul 31, 2009 12:58 PM CDT

bad typing today, my apologies.

psycada

Jul 31, 2009 12:52 PM CDT

Andy, oplease for the love of god, investiage and prosecute the bakers. You're our only hope after Spitzer was railroaded out of office. The two of you would have made an excellent team when he was Governor, but hopefully, when you are Governor, Spitzer will decide to return as AG and you can still get it done. Good luck!

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Wall Street Journal (Source Grid »)

Politics • Money

Citigroup • executive compensation • Bank of America • Goldman Sachs • Merrill Lynch • Andrew Cuomo • bonuses • bailout • Troubled Asset Relief Program • Wall Street bailout • TARP

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TARP-Funded Banks Kept Awarding Bonuses