No bad deed goes unrewarded
Thousands of angry U.S. workers took to the streets Thursday to protest some major banks and insurance companies that have handed out extravagant bonuses on the taxpayers’ dime, as the U.S. House of Representatives voted to get some of the bonus money back.”Banks get bailed out and people get sold out!” yelled janitors, hotel workers, security workers and others pounding on makeshift drums outside a Wells Fargo bank in San Francisco. The protesters marched in Boston,Chicago, Denver, New York and other cities. The actions were aimed at raising support for strong banking reform, the right to unionise and health care for all.
Some also marked the sixth anniversary of the start of the Iraq war. Wells Fargo paid its CEO 26 million dollars in 2007 and paid its bank tellers about 21,000 dollars. The bank has increased its fees on consumers by almost 30 percent since 2003. It spent 690,000 dollars on lobbying in just the last three months of 2008. The protests came just days after the public learned that AIG, a global insurance firm, handed out 165 million dollars in bonuses to its top employees on Mar. 13.
The ailing company has so far received 173 billion dollars in taxpayer assistance to keep it and major banks from a total collapse. U.S. taxpayers gained 80 percent of the company in exchange for the funds, but the deal has been widely criticised because the U.S. has no shareholder voting rights and no representation on the company’s board. Many banks now want to cash in on their insurance and AIG says it is out of cash. New York Attorney General Andrew Cuomo subpoenaed AIG and learned that the company paid bonuses to 417 employees and that 298 were paid more than 100,000 dollars. More than 50 people were paid 1 million dollars each. Eleven of those who were given bonuses are no longer with AIG.
AIG is just one of more than a dozen major banks that have received huge infusions of bailout cash from the U.S. Treasury, and that then attempted to hand out hefty bonuses to CEOs. Some halted the bonuses, under public pressure. Merrill Lynch is expected to hand over its bonus information soon to Cuomo. According to a recent report by the Institute for Policy Studies, Wall Street firms handed out 18 billion dollars in bonuses in 2008. An angry congressional panel questioned AIG CEO Edward Liddy about the bonuses. Thursday, the House passed a bill that would strip 90 percent of the bonus amounts, by heavily taxing them.
The taxes would only apply to people whose family income is 250,000 dollars or more, who received bonuses in 2009 and who work at one of the dozen or so banks bailed out by 5 billion dollars or more, including Bank of America Corp. and Citigroup Inc. The House bill was passed by 243 Democrats and 85 Republicans, and six Democrats and 87 Republicans voted against it. A similar bill is expected to pass the Senate soon and be signed into law by Pres. Barack Obama.
A controversy has erupted within the Barack Obama administration about the bonuses, and who knew about them. Special Inspector General Neil Barofsky told the House Financial Services Committee Thursday that the Bush administration’s Treasury Department and AIG negotiated the bonuses in November 2008. — IPS