Henry Blodget makes crystal clear that Ken Lewis is taking taxpayer dollars in order to pay executive bonuses. Specifically:
By the time it paid its bonuses, Merrill knew about the $21 billion of operating losses for the quarter and Ken Lewis and BOFA knew they would need more capital. Bonuses are supposed to be based on the full year’s performance, so the Q4 losses should have reset the bonus pool for the whole year. If most of the bonuses really were paid prior to December (which would be highly unusual–it’s almost always a one-time lump sum), then at the very least, the last payment should have been stopped.
Meanwhile, if Merrill hadn’t paid out $15 billion in bonuses, Bank of America presumably would only have needed $5 billion from taxpayers, not $20 billion.
And in case you’re beginning to have sympathy for BOFA’s argument that “bonuses weren’t paid with actual taxpayer cash,” recall that BOFA has ALREADY RECEIVED $25 billion in taxpayer funds, $10 billion of which were for Merrill. So Merrill used all of the original $10 billion PLUS $5 billion of the latest $20 billion to pay bonuses.
Yet the city of Charlotte and CATS still thinks DC is gonna throw more money at the QC. We’ve already pocketed $45 billion via BofA, with hundreds of billions more standing behind the Uptown banks in the form of federal guarantees. Thank you very much, Uncle Sucker.
