Obama Treasury approved big pay raises for bailed out execs against guidelines. Tammany Hall on the Potomac

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1/28/13, ""Treasury approved big pay raises at bailed-out AIG, Ally and GM, report says," Washington Post, Danielle Douglas

"The Treasury Department ignored its own guidelines on executive pay at firms that received taxpayer bailouts and last year approved compensation packages of more than $3 million for the senior ranks at General Motors, Ally Financial and American International Group, according to a watchdog report released Monday.

The report from the special inspector general for the Troubled Assets Relief Program said the government’s pay czar signed off on $6.2 million in raises for 18 employees at the three companies. The chief executive of a division of AIG received a $1 million raise, while an executive at GM’s troubled European unit was given a $100,000 raise. In one instance, an employee of Ally’s Residential Capital was awarded a $200,000 pay increase weeks before the subsidiary filed for bankruptcy.

“We expect Treasury to look out for taxpayers who funded the bailout of these companies by holding the line on excessive pay,” said Christy Romero, special inspector general for TARP. “Treasury cannot look out for taxpayers’ interests if it continues to rely to a great extent on the pay proposed by companies that have historically pushed back on pay limits.”

The inspector general’s report accuses Patricia Geoghegan, Treasury’s acting special master for compensation, of sidestepping protocol that kept pay packages at the midpoint of comparable firms. Geoghegan, however, said the audit is riddled with inaccuracies and mischaracterizes the data provided to the inspector general....

Treasury’s compensation chief at the time, Kenneth Feinberg, scolded companies for what he called “ill-advised” payouts to executives, and vowed to curb lavish pay. Nonetheless, Treasury allowed seven firms to bypass pay restrictions from 2009 to 2011, according to a report issued by the special inspector general in January 2012. 

Monday’s report evaluates Treasury’s actions since then, with stinging allegations of lax oversight and supervision. Romero said Geoghegan deferred to the pay proposals provided by the companies, approving raises above pay limits and failing to link compensation to performance.

“Treasury made no meaningful reform to its processes,” the special inspector said in the latest report. “Lacking criteria and an effective decision-making process, Treasury risks continuing to award executives of bailed-out companies excessive cash compensation without good cause.”

According to the report, Treasury approved total pay packages exceeding the 50th percentile by more than $37 million for nearly two-thirds of the top 25 employees of AIG, GM and Ally. The three firms combined received nearly $250 billion in TARP funds. Only AIG has fully repaid its $182 billion bailout.

Feinberg, who resigned in 2010, limited executives’ cash salaries to $500,000 and shifted compensation toward stock to reduce excessive risk-taking, allowing for exemptions in special circumstances.

Romero made a point of noting that 65 of the 69 senior employees at AIG, Ally and GM were granted cash salaries of $450,000, while in 2011 the median household income of the taxpayers who funded the bailout was about $50,000....

Ally owes the government about $13 billion, Treasury told Congress on Jan. 2." via Lucianne

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Ed. note:  Michael Savage suggested the US government is now Tammany Hall and Obama is Boss Tweed. It will take 100 years for the country to get out of this assuming it ever does. Per Dr. Savage on Monday night's show.

"The most corrupt and infamous member of Tammany Hall was William Marcy Tweed, called "Boss" Tweed. He served as a state senator in 1868 and, with his followers, known as the Tweed Ring, dominated state government and defrauded New York City of millions of dollars."...

"Tweed became a powerful figure in Tammany Hall--New York City's Democratic political machine--in the late 1850s. By the mid 1860s, he had risen to the top position in the organization and formed the "Tweed Ring," which openly bought votes, encouraged judicial corruption, extracted millions from city contracts, and dominated New York City politics. The Tweed Ring reached its peak of fraudulence in 1871 with the remodeling of the City Court House, a blatant embezzlement of city funds that was exposed by The New York Times. Tweed and his flunkies hoped the criticism would blow over, but thanks to the efforts of opponents such as Harper's Weekly political cartoonist Thomas Nast, who conducted a crusade against Tweed, virtually every Tammany Hall member was swept from power in the elections of November 1871."...

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