"A riot is an ugly thing ... undt, I sink zat it is chust about time zat ve had vun!"
— Inspector Kemp, Young Frankenstein
First, we had Rep. Henry Waxman subpoenaing compensation information from the nine commercial and investment banks which have received equity injections from the Treasury's TARP program, in an annoying but understandable effort to find out whether these banks were simply turning around and paying out taxpayer monies to fat cat investment bankers.
Earlier today we had Mario Cuomo's idiot son getting in on the act as well:
We believe that the Board of Directors is most appropriately positioned to respond to our requests as the firm's top management likely has a significant interest in the size of the bonus pools. In this new era of corporate responsibility we are entering, boards of directors must step up to the plate and prevent wasteful expenditures of corporate funds on outsized executive bonuses and other unjustified compensation.
As my Office has told AIG, now that the American taxpayer has provided substantial funds to your firm, the preservation of those funds is a vital obligation of your company. Taxpayers are, in many ways, now like shareholders of your company, and your firm has a responsibility to them.
Accordingly, we also ask that the Board inform us of the policies, procedures, and protections the Board has instituted that will ensure Board review of all such company expenditures going forward. Please provide this Office with an accounting of the actions the Board plans to take that will protect taxpayer funds.
Now, I am no lawyer, nor have I ever pretended to be one. (Except that one time in Panama, but that doesn't really count.) Perhaps Mr. Cuomo is within his rights to warn his targets in advance against actions which could be construed by an aggressive, politically ambitious attorney general as fraudulent conveyance under Section 274 of the NYD&C Law. (From the information he is requesting, it sure looks like he is on a fishing expedition for intent to violate the law, since no bonuses have actually been awarded yet.)
Perhaps he also has the authority to demand a detailed accounting of how the boards of these companies plan to protect federal taxpayer funds going forward. But I must say, as a simple layperson, that both these actions reek of a level of governmental interference and oversight which strikes me as both egregious and premature.
What does Mr. Cuomo intend by intervening at this point in time? Does he propose to "help" these institutions develop their corporate and board level policies on governance and compensation? Does he expect to wield real-time oversight over the actions of these private corporations because they have received public funding? Does he want a leather-covered seat in the oak-paneled boardroom?
And let us not forget, Dear Readers, that Mr. Cuomo wields the baton of the top law enforcement official in New York State. The last time I checked, the TARP investments in the balance sheets of these nine banks were being funded out of federal taxpayer monies. Putting two and two together, I am led to one niggling little question: Who the fuck does this clown think he is?
Sadly, the answer is depressingly simple and banal: He is a politician.
And, apparently, he is an effective one who knows his audience. All you have to do is read the reactions of the mouth-breathers, wing-nuts, and whack jobs in the comments section of the DealBook post cited above to see that opinion is running approximately 52,000-to-1 in approval of his actions and 25,000-to-1 in support of extrajudicial torture and killing for anyone who even knows how to type "Wall Street" without using ALL CAPS.
The paragraphs I have cited above from his letter demonstrate that he is highly skilled in the demagogic arts of grandstanding, gratuitous flag-waving, presumptive credit-taking, and delivering stern lectures to those he presumes guilty. Most of those remarks are certainly extraneous to the straightforward requests for information he makes elsewhere in the letter, but it is clear that he has included them for purely public consumption.
In this regard, Mr. Cuomo is no original. He is simply following the well-trodden path of previous law enforcement officials from this fair city and state, who have used the smoking wreckage and twisted bodies from previous financial panics both as a bully pulpit from which to harass and harangue the real and imagined evildoers of Wall Street and as a launch pad to higher political office. Whether and to what extent the parties they have pursued were actually guilty of wrongdoing never figured prominently in the political calculus of Eliot Spitzer or Rudy Giuliani, as long as they could get good (nationwide) press for cleaning up Tombstone. I have little expectation that Mr. Cuomo will behave any differently.
Of course, one must not feel too surprised or dismayed at this turn of events. Even on the savannahs of Africa, the King of the Beasts may be harried from his kill by a determined pack of hyenas, and the hyenas in turn must yield to jackals and vultures. The hyena is—evolutionarily speaking—a magnificent beast, purpose-built for its ecological niche in the grassland food chain. Too bad it is such an ugly, fear-inspiring, despicable beast. At least in Africa the other animals do not allow hyenas to kiss their babies.
As for my part, all I can say is I am relieved I do not hold an executive position at one of these banks.
You literally could not pay me enough to deal with a bunch of self-righteous, self-aggrandizing, self-pleasuring dipshits like Andrew Cuomo and his band of merry men at the NY OAG. I positively look forward to their eventual self-immolation on the Eliot Spitzer Memorial Pyre of Hubris and Hypocrisy.
Who's going to buy the marshmallows? Can I nominate Kenny Langone?
© 2008 The Epicurean Dealmaker. All rights reserved.
