Outrageous: Treasury Dept. OK'd Million Dollar Raises for Bailed-Out Wall St Firms
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The Treasury Department approved “excessive” salaries for executives at a number of financial firms last year that received taxpayer funds as part of the 2008 economic bailout of Wall Street.
The news comes in a report authored by the Special Inspector General for the Troubled Asset Relief Program, which said that “Treasury approved all 18 requests it received last year to raise pay for executives at American International Group Inc., General Motors Corp. and Ally Financial Inc,” according to the Associated Press.
14 of the requests for executive pay raises were over $100,000, and the biggest raise was $1 million. The AP also notes that the inspector general report states that Treasury also “allowed pay packages totaling $5 million or more for nearly a quarter of the executives at those firms.”
One of the more outrageous items uncovered by the inspector general is that a $200,000 raise for an executive at Ally’s mortgage-lending subsidiary was approved--right before the subsidiary filed for bankruptcy. And Ally itself was taken over by the government in 2008.
Other firms that saw their executives’ pay go up include the American International Group and General Motors. Both GM and Ally still owe money to the government.
“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, the Special Inspector General for the Troubled Asset Relief Program. “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 2008 economic bailout of Wall Street firms limited executive pay, but the Treasury Department approved the raises anyway.
The Treasury official who oversaw the raises, Patricia Geoghegan, saw no problem with the raises. In a letter sent to Romero, Geoghegan said that “it’s unfair to call the pay excessive” and that “Treasury must strike a balance between limiting compensation and approving pay packages that are consistent with executives in similar jobs,” according to the AP.