When Merrill Lynch snuck in $4 billion in executive bonuses just before its sale to Bank of America, nearly everyone I spoke with said that while the move was despicable, there wasn’t anything anyone could do. Taxpayers aren’t shareholders of Merrill, and they had to just stand by and watch.
New York Attorney General Andrew Cuomo apparently doesn’t think so. Cuomo plans to go after those bonuses and try to get the money back, Bloomberg says.
The attorney general’s office is looking at whether the companies’ shareholders had all necessary information about Merrill’s finances and whether federal bail-out loans to Bank of America were used properly.
“No longer will this country stand for wasteful spending of tax dollars on bonuses for executives whose companies have taken huge losses and required taxpayer bailouts,” Cuomo said today in a statement about bonuses paid at Wall Street firms that received funds from the Troubled Asset Relief Program or TARP.
I’m not sure what legal standing Cuomo has to demand the money back. Mabye the TARP money strengthens his case. Regardless, he most certainly can win based on the pressure of public opinion, and the growing anger over the kind of Wall Street antics that would have been shrugged off just a few years ago. Banks might give bonuses back not because they have to, under the law, but for the public relations aspect of it all– especially if they plan to come back and ask for yet more money from an increasingly angry public.
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