Romney Wants '$35K Commode' John Thain For Treasury

Huffington Post

Mitt Romney is considering appointing a man who oversaw the implosion of a major Wall Street firm and got himself a $35,000 toilet while doing it as Treasury Secretary.

John Thain, the former CEO of Merrill Lynch, is on Romney's short list of possible Treasury Secretary picks, the Wall Street Journal reports.  He paid his executives massive bonuses before selling Merrill Lynch to Bank of America during the height of the financial crisis with the help of federal bailout billions.

He tried to snag a $10 million bonus for himself as the firm was collapsing, and he even spent $1.2 million on remodeling his office -- including on a $35,000 toilet -- as Merrill Lynch was imploding.  Bank of America CEO Ken Lewis pushed Thain out in January of 2009.

Buying Merrill Lynch has saddled Bank of America with massive mortgage losses, as well as legal costs.  BofA recently agreed to pay $2.43 billion to settle a class-action lawsuit alleging it misled investors about Merrill Lynch's finances.

In addition to Thain, Romney is also considering Richard Kovacevich, former CEO of Wells Fargo; Robert Zoellick, former president of the World Bank; and Glenn Hubbard, dean of Columbia Business School, as potential candidates for Treasury Secretary.

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John Thain, TARP pillager-in-chief, with Maria Bartiromo (CNBC, last week):

Is CIT up for sale?

• Transcript at CNBC

Maria doesn't ask him anything about bonuses or bailouts and performs the expected CNBC fellatio of all Wall Street executives.

Paulson and Geithner gave CIT Group more than $2 billion in TARP funds, which were never paid back and CIT declared bankruptcy months later.  Then in restructuring, CIT hired John Thain, the former Goldman Sachs exec and later CEO of Merrill Lynch who engineered $4 billion in taxpayer-funded bonuses for Merrill in a year the firm lost over $10 billion (2008), and spent over $1 million of TARP funds redecorating his office.

Comments

[DailyBail]

Romney Advisor Glenn Hubbard Wants Bernanke's Job As Fed Chairman So Bad He Can Already Taste The Ink

http://dailybail.com/home/romney-advisor-glenn-hubbard-wants-bernankes-job-as-fed-chai.html

[DailyBail]

Bank of America Settles Suit Over Merrill for $2.43 Billion

http://dealbook.nytimes.com/2012/09/28/bank-of-america-to-pay-2-43-billion-to-settle-class-action-over-merrill-deal/

From last week.

[SKINFLINT]

Long forgotten aspect of Merrill deal. Treasury gave to BOA a poop load of money to swallow this giant turd. http://money.cnn.com/2009/01/16/news/companies/bofa_new_bailout/

[Cheyenne]

Also forgotten: Bank of America's fraudulent concealment of $5.8 billion of Merrill Lynch bonuses from BAC shareholders prior to the vote on the merger, which became the subject of a lawsuit that exposed the S.E.C. as the tool of criminal bankers:

"[T]he parties [S.E.C. and BofA] were proposing that the management of Bank of America—having allegedly hidden from the Bank's shareholders that as much as $5.8 billion of their money would be given as bonuses to the executives of Merrill who had run that company nearly into bankruptcy—would now settle the legal consequences of their lying by paying the S.E.C. $33 million more of their shareholders' money."

http://scholar.google.com/scholar_case?case=14424144582837922601&hl=en&as_sdt=2,34

[Pitchfork]

Paulson and Bernanke were right there twisting Lewis's arm to make the deal go through. Lewis wanted out of the deal, but Pualson basically told him that BofA would be on its own and Lewis could see enforcement action against him for any kind of failure. Of course, if Lewis had been honest with shareholders, that would have killed the deal, and killing the deal was not an option in light of Paulson's threat.

[SKINFLINT]

Well Lewis did make a threat to tell this to Congress, but I guess he got enough shut up money to make the deal go through. Paulson and his cohorts WERE twisting a lot of arms to take money. Was Bernanke the guy or was it Gethner? Thain did piss and moan about trying to get the bonus money. What did the guy from Bear Stearns get when they folded shop. Something like 160,000,000 plus health dental use of limos and corporate jets and all the rest of the trappings of upscale living? He used to ride a private elevator and go golfing a lot. Was hardly ever in office. Sort of like the President. Maybe he knew what was coming and just kept his head down and didn't say a word.

[DailyBail]

As you all correctly point out, the entire episode is madness. To think that Merrill and Thain would still pay themselves those kinds of obscene bonuses given ML's massive losses, all paid with taxpayer monies.

I mean for Chrissakes they were a DEAD COMPANY. Gone. Insolvent. No hope. Then a Fed induced rescue by Ken Lewis lead to $5 billion in bonuses less than 2 months later.

[Cheyenne]

Mergers like BofA-Merrill were also key to an enormous backdoor bailout that's yet another forgotten aspect of the permanent Wall Street welfare state created in 2008.

Before getting swallowed by Bank of America, Merrill had losses of $27 billion, which helped BofA immensely thanks to Hank Paulson's re-write of tax rules. Prior to the Fall of 2008, companies were not allowed to acquire the net operating losses ("NOLs") of their targets for tax purposes. Paulson changed that rule, Treasury Regulation 382, in the dead of night, a unilateral act that experts agree was illegal. (That rule change accounts for Wells Fargo's last-minute takeover of Wachovia, shoving Citigroup to the side.)

This outright gift to Wall Street amounted to $140 billion in additional welfare.

http://www.washingtonpost.com/wp-dyn/content/article/2008/11/09/AR2008110902155.html

For some reason, this bailout never enters the calculation of the Wall Street cheerleaders who crow about what a great deal the bailout was for taxpayers.

Aside from the financial loss from this bailout, the public also lost out on knowledge, since bankruptcy reports a la the 2200-page Encyclopedia of Fraud from Lehman Brothers were thereby obviated.

[Pitchfork]

Good points all round. Madness indeed. No good guys and bad guys here, let's be clear. Just a basket of snakes.

[DailyBail]

Johnny Wad Thain - PHOTO

http://1.bp.blogspot.com/_wkgIzuqJM0w/S9HVB0KWlHI/AAAAAAAAD70/hFCYmehnlEs/s1600/thain.jpg