A watchdog group has found that the U.S. Treasury Department allowed big raises for executives at three firms being bailed out during the financial crisis.
A watchdog group has found that the U.S. Treasury Department allowed big raises for executives at three firms being bailed out during the financial crisis. The special inspector general for the Troubled Asset Relief Program published findings that show the Treasury approved 18 requests for paydays around $100,000 -- and even up to $1 million -- for leaders at General Motors, American International Group and Ally Financial, despite rules that limited pay. Together, the three firms received close to $250 billion in bailout money. The Treasury official who approved the raises said the pay wasn't excessive.
The Special Inspector General for the Troubled Asset Relief Program said Treasury approved all 18 requests it received last year to raise pay for executives at American International Group Inc., General Motors Corp. and Ally Financial Inc. Of those requests, 14 were for $100,000 or more; the largest raise was $1 million.
Treasury also allowed pay packages totaling $5 million or more for nearly a quarter of the executives at those firms, the report says.
Also noted: A $200,000 raise was approved for an executive of Ally’s mortgage-lending subsidiary Residential Capital LLC just weeks before ResCap filed for bankruptcy protection. Ally was GM’s financial arm until it was taken over by the government in the bailout.
“We ... expect Treasury to look out for taxpayers who funded the bailout of these companies by holding the line on excessive pay,” said Christy Romero, the special inspector general for TARP. “Treasury cannot look out for taxpayers’ interests if it continues to rely to a great extent on the pay proposed by companies that have historically pushed back on pay limits.”
The report says Treasury bypassed rules under the 2008 bailout that limited pay. Treasury approved raises that exceeded pay limits and in some cases failed to link compensation to performance, it notes.
As infuriating as this news is on its own, I find it serves to underscore how ridiculously difficult it is just to get our states to raise the minimum wage to a living wage for all of those who aren't corporate CEOs, out here in real America.