Lehman CEO hit hard in Hill hearing
By: Daniel W. Reilly
Lehman Brothers took a series of direct hits Monday in the House Oversight and Government Reform Committee, repeatedly depicted by members as a greedy investment bank that took good care of its executives just days before it sought help from the federal government to avoid bankruptcy.
House Oversight and Government Reform Committee Chairman Henry A. Waxman (D-Calif.), calling the bank “a company in which there was no accountability for failure,” was quick to chastise CEO Richard S. Fuld Jr.
Among other things, Waxman cited internal Lehman Brothers documents provided the committee in which a suggestion that top Lehman management should forgo bonuses was apparently dismissed.
“In other words, even as Mr. Fuld was pleading with [Treasury] Secretary Paulson for a federal rescue, Lehman continued to squander millions on executive compensation,” Waxman said before Fuld appeared before his committee.
During his afternoon testimony, Fuld defended his actions, telling the panel that he did everything he could to save the company that had employed him since 1969 and that he took full responsibility for its failure.
“Not that anybody on this committee cares about this,” Fuld said, “but I wake up every single night thinking about what I could have done differently.”
Fuld said he would wonder why the federal government allowed his company to fail but rescued others “until the day they put me in the ground.”
Many committee members echoed familiar attacks throughout the day, with many Democrats highlighting the issue of executive compensation, while several Republicans questioned why Waxman was not holding hearings on the practices of mortgage giants Fannie Mae and Freddie Mac, now under direct government control.
At one point, Waxman asked Fuld if it were true he made some $480 million in compensation since 2000, asking: “Do you think it’s fair?”
In a tense exchange, Fuld said the actual figure was much smaller and that he took home closer to $60 million in cash compensation.
Waxman also did not rule out the possibility of hearings on Fannie and Freddie, saying committee staffers are in the process of reviewing documents related to the mortgage giants.