Posted by
Stefano on Wednesday, April 08, 2009 9:26:06 AM
I
sent an email to the authors of the Wash Post article. Mr. Cho answered with this:
"Hi Joe, two committees on capitol hill are looking into this. We'll be writing about this again soon."
That's a good start. We'll be following up later.
The Financial Times reports that hedge funds are seeking to avoid TALF restrictions on foreign workers and massive federal TALF paperwork along with the pay/compensation restrictions and government equity investment requirements. They are forming special purpose vehicles (SPV) that will act as middle-men entities and will then pass the money on to the hedge funds to evade the recent law passed by Congress and signed by the President. SPV's are the type of entity that Enron used to hide their nefarious activities.
I say that Congress should admit that their bombastic nonsense about pay and bonuses was a sham and repeal the law restricting pay and bonuses. Otherwise, enforce the law and hold those to account who violate the law.
Additional Update
From Patrick O'Connor at All Cap Blog:
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April 6, 2009
Dear Secretary Geithner:
I am writing to express my deep concern over recent reports that the Treasury Department may be attempting to circumvent statutory restrictions on executive pay at companies receiving federal bailout funds.
According to an article that appeared in the Washinglon Post on April 4,2009,the Treasury Department “is engineering its new bailout initiatives in a way that it believes will allow firms benefiting from the programs to avoid restrictions imposed by Congress, including limits on lavish executive pay . . . .” Allegedly, Treasury has set up special entities to serve as middlemen, which would receive federal bailout funds and then channel the money to corporate recipients, thereby avoiding restrictions on executive pay and requirements that the U.S. obtain an ownership interest in the bailout firms.
I hope these allegations are not true. ‘We now know that extraordinary compensation was paid to bank executives even as they led their companies to the brink of collapse and later sought and received billions of dollars in federal funding. It would be unconscionable and irresponsible for the Treasury Department to permit excessive pay practices to continue at companies that have been rescued by the taxpayers.
Read the rest of the letter to Geithner at the link above.