Unintended Consequences of Demonizing Banks

Looks like the efforts by Democrats to demonize the banks and limit executive pay is having unintended consequences.

Citigroup Inc.,Bank of America Corp. and smaller banks struggling to attract talent and regain ground on stronger peers may face a new obstacle resulting from the global push to rein in executive pay.

Group of 20 standards barring bonus guarantees for more than one year and requiring deferred pay for top executives would take recruitment tools away from banks already burdened by diminished share prices and damaged reputations, some recruiters said. The plan adopted at last week’s G-20 summit may benefit Goldman Sachs Group Inc., JPMorgan Chase & Co. and Morgan Stanley, which have been quicker to repay government aid.

“Limiting guarantees to one year could hurt banks like Citigroup and Bank of America by putting them at another disadvantage in hiring,” said Colleen Westbrook, a partner with Morrison Cohen LLP in New York and a former counsel at the Federal Reserve Bank of New York.

The reality is that banking is a competitive business. Being able to attract, develop and retain talent is a key element to being successful. Talented employees are going to move to where their income is maximized. It just stands to reason that when there are pay caps put on some of those banks, the talent drain will be noticeable.

Of course, the left will see this as justification to cap all pay levels. All that will do is drive the top talent overseas to uncapped countries and damage the U.S. banking system even further.

This administration is slowly turning the U.S. banking industry into a government bureau office.

TARPalicious! Bailed-Out Banks Funding ACORN

The more layers you peel back from the ACORN scandal the more incestuous the relationship between Democrats and ACORN becomes obvious. Now that the antique media has actually discovered the story due to ACORN's insane decision to sue Andrew Brietbart, James O'Keefe and Hannah Giles they'll have no choice but to actually cover the story. Who knows, even Charlie Gibson might give it 10 seconds on ABC News.

Now we discover that some banks that received TARP money have been funneling major dollars to this criminal empire.

Jamie Dimon has been described as “Obama’s favorite banker” by the New York Times. He’s ACORN’s favorite banker, too, and with good reason. Mr. Dimon is the CEO of JPMorgan Chase, which operates a charitable foundation that gave ACORN $1 million in 2007, along with a smaller grant to the ACORN Institute. Beyond the charitable grants, ACORN and its affiliates have long profited from their “partnerships” with the big banks, taking a cut of subprime loans marketed to low-income borrowers in poor neighborhoods.

However, JPMorgan Chase isn’t the only big offender here. According to Peter Flaherty — president of the National Legal and Policy Center, which is tracking corporate America’s underwriting of the Left — other big ACORN benefactors include such TARPalicious names as Bank of America and Citigroup. Taxpayers bail out the banks, the banks fund ACORN, and ACORN dispenses advice on human trafficking and tax evasion to aspiring pimps and hookers. Not America’s proudest moment.

Oh, and who exactly is Jamie Dimon? Maybe you'll recognize some of his connections.

Dimon, of course, is no white-shoe East Coast banker. He’s a Chicago Democrat, deeply plugged in to Obama’s machine — he was said to be Obama’s choice for secretary of the Treasury until advisers convinced the president to go with Tim Geithner — and so it’s no surprise to find his company shunting money ACORN’s way. And where there are Chicago Democrats and a whiff of corruption, can the name Daley be far away? Bill Daley, brother of Chicago mayor Richard Daley and son of Boss Daley, runs JPMorgan Chase’s charitable foundation and also is in charge of the bank’s “corporate social responsibility” office. While it would be unfair to visit the sins of the father (and the brother, and the rest of the Chicago machine) upon the son, Daley is not the first name that comes to mind when one thinks of “social responsibility.” Even leaving aside his family connections, Mr. Daley represents precisely the overlap of Wall Street, Democratic machine politics, and ACORN that ought to give sober observers pause.

Naturally, Harry Reid and the Democrats are resistant to investigating ACORN because it may well topple the Democrats stranglehold on the Senate and the House of Representatives. Reid and the rest of his gang can try as they might but this story is not going away.

Still, the media will try running interference with tear-jerking stories like this.

North Carolina's ACORN office has had to lay off all eight of its employees in the wake of a scandal that has rocked the national office of the grass-roots organizing group.

Yet many workers have continued the past three weeks as unpaid volunteers for the nonprofit organization, reaching out to low- and moderate-income workers who might need help with issues ranging from landlord fights to high-priced mortgages.

In Washington, hidden-camera videos made this summer by two young conservative activists that appear to show ACORN workers in other states encouraging illegal behavior have led to federal inquiries and inspired Congress to act to cut off much of the national organization's federal funding.

ACORN has received untold millions from the taxpayers and banks so we must ask: Where has all the money gone?

ACORN's national organization, along with an affiliated group, ACORN Housing, also received a $2 million housing preservation grant from Charlotte-based Bank of America.

In a statement, the bank said that it doesn't condone the actions on the videos and that it is reviewing its work with ACORN.

Bank of America also said it and other banks have allowed ACORN to help tens of thousands of homeowners facing foreclosure.

"Overall, we believe our investments have been leveraged to further the company's commitments and benefit the country," the bank said in its statement.

Would the folks at Bank of America like to walk that one back?

As for Harry Reid's refusal to investigate, he may soon have no choice, especially if he has any designs on a political career after 2010.

"It is almost Orwellian for the majority leader and these Senate Democrats to go on and on about how these investigations may be politically driven," Vitter said "Interestingly now, because of ACORN's well-known close relationship with the Democratic Party, the majority leader believes the status quo for the last 2 1/2 years could be harmful to our country."

Also Wednesday, Vitter sent a letter to Attorney General Eric Holder suggesting he open an inquiry into ACORN under the Racketeer Influenced and Corrupt Organization statute.

"Now that both chambers of Congress have agreed to cut off funding for ACORN, the Justice Department should use all of the current legal tools at its disposal -- like the RICO Act -- to ensure that the taxpayer dollars that ACORN receives are being used properly, " Vitter wrote Holder.

The Democrats are on extremely thin ice heading into the 2010 midterms and having ACORN out there registering phony voters for them sure isn't going to help.

Major Democrat Fundraiser Charged With Fraud

Democrats and fraud, perfect together. And in what should be considered a stunning development, the word Democrat actually appears in the Reuters headline.

The U.S. attorney in New York on Tuesday charged a New York investor and major Democratic fund-raiser with a $74 million scheme to defraud Citigroup Inc (C.N).

Hassan Nemazee, 59, was charged with one count of bank fraud, and faces up to 30 years in prison plus a fine. His lawyer Marc Mukasey, a former federal prosecutor, did not immediately return a call seeking comment.

Nemazee was a national finance chair of U.S. Secretary of State Hillary Clinton's 2008 presidential campaign, and a supporter of John Kerry's run for the White House in 2004.

He typically donates more than $100,000 annually to Democratic political candidates, including Senate Majority Leader Harry Reid and Senator Charles Schumer, and sits on the board of the Iranian American Political Action Committee .

Bill Clinton, when he was president, nominated Nemazee to be U.S. ambassador to Argentina.

Prosecutors said Nemazee, the chairman and chief executive of Nemazee Capital Corp, sought to induce Citigroup's banking unit to lend up to $74 million based on fraudulent and forged documents suggesting that he had hundreds of millions of dollars of accounts available as collateral.

They said Nemazee also provided Citigroup with fake references so that when the bank would try to confirm details about his accounts, it would actually be contacting him. The scheme lasted from December 2006 to this month, the prosecutors said.

Prosecutors said federal agents stopped him on Sunday at Newark Liberty International Airport as he prepared to board a flight to Rome, and that he repaid a more than $74 million loan to Citigroup the following day.

Sounds like he was going to abscond like another Clinton pal, Marc Rich.

Chuckie Schumer ought to be pleased to find out another of his major fundraisers now faces prison, just like his pal Bernie Madoff.

In addition to Nemazee and the now-imprisoned Norman Hsu, I wonder how many other criminal fundraisers were helping Hillary Clinton?

Here's a rundown of Democrats Nemazee contributed to: Also included are Democrat Senators Barbara Boxer, Joe Biden, Kirsten Gillibrand, Frank Lautenberg, Dick Durbin, Carl Levin, and Jay Rockefeller.

I'll wait with breathless anticipation for all of them to comment and offer to return his dirty money.

Michelle Malkin already has material for a new chapter of her best-selling book.

Rewarding Incompetence: Citigroup's Chief Economist Gets Treasury Gig

I wonder if all those folks howling about AIG bonuses will muster up any feigned outrage over this announcement. Nothing like rewarding a guy who helped oversee $37 billion in losses over the past year. Come to think of it, he seems to be a natural for the Obama administration.

Citigroup Inc.'s chief economist is leaving the New York company for a job at the U.S. Treasury Department, according to an internal Citigroup memo.

Lewis Alexander, who has been at Citigroup since 1999 and before that worked at the Federal Reserve, will head to Treasury "to work on domestic financial issues," said the Citigroup memo, which was sent Tuesday.

According to a government official, Mr. Alexander will be a counselor to Treasury Secretary Timothy Geithner. Mr. Alexander and a Treasury spokesman weren't immediately available to comment Tuesday. A Citigroup spokesman declined to elaborate on the company's memo.

Mr. Alexander, who was the Commerce Department's chief economist from 1993 through 1996, is joining Treasury at a time when the department is scrambling to beef up its ranks of senior officials. The current staff shortage has fostered doubts on Wall Street and in Washington about the Obama administration's ability to get its arms around the financial crisis.

The Obama administration so far has largely avoided tapping Wall Street officials for senior spots at Treasury, wary of stoking the mounting political backlash surrounding the federal bailouts of the finance industry. That has irked top executives at some major banks, who say they can't get an audience with top Treasury officials.

This is sure to help stem any backlash. Besides, this guy sounds like a real gem.

Mr. Alexander's role as Citigroup's chief economist didn't entail significant management responsibilities. But his optimistic economic forecasts colored executives' views that the U.S. was unlikely to face a prolonged slump.

"I think that's not going to spill over more broadly into the economy, and so I think we're going to have a normal kind of housing cycle that's going to last through the middle of this year," Mr. Alexander said in a Feb. 28, 2007, interview on PBS.

In the past five quarters, Citigroup has booked a total of more than $37 billion in net losses, largely stemming from the company's overexposure to the U.S. real-estate sector.

You just can't buy such savvy experience.

It'll be curious to see what kind of going away present he gets from Citigroup.

I guess it helped that Alexander was a maximum contributor to Barack Obama.

Nice payoff.

Dodd Speaks, Markets Instantly Tank

It's bad enough Christopher Dodd played a role in the housing market crash and largely avoids any blame, but now whenever he opens his mouth the markets instantly react negatively. It would be nice if he just dummied up and laid low. It would be even nicer if his constituents sent him into political retirement next year.

Last week, the scary word was "nationalization," a government takeover of a business or industry. It's pretty much the worst fear of every capitalist.

A number of the nation's biggest banks -- Citigroup and Bank of America, chiefly -- are sick, their balance sheets poisoned with toxic assets they can't unload, such as mortgage-backed securities.

They are so sick that Sen. Christopher Dodd (D-Conn.), the powerful head of the Senate Banking committee, nearly sent them into cardiac arrest on Friday with a comment he made.

A little after 1 p.m. on Friday, while speaking on Bloomberg television, Dodd said that nationalization of some of the nation's unhealthiest banks may be necessary "for a short time."
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"I don't welcome that at all, but I could see how it's possible it may happen," Dodd said.

It's usually a mistake to link market fluctuations to moment-by-moment news.

Not this time.

The Dow Jones industrial average and the Standard & Poor's 500 instantly dove nearly 3 percent following Dodd's comments.

That's not the worst of it: Shares of Bank of America, Citigroup and Wells Fargo responded to Dodd's comments by each dropping a staggering 25 percent within minutes.

Dodd's comment was so potent, the White House felt compelled to chime in quickly, saying "a privately held banking system is the correct way to go."

Naturally, in response, the markets ricocheted back up, as did bank stocks, more than recovering their losses, at least for a time.

Linked at Instapundit. Thanks!

Stop the Presses: Dennis Kucinich Is Making Sense

It's not often I find myself in agreement with kooky Congressman Dennis Kucinich, but he's dead right in this case.

Two members of the House of Representatives are demanding that the Mets scrap their $400-million naming-rights deal with financially troubled Citigroup because of the bank's receipt of federal bailout money.

Reps. Dennis Kucinich (D-Ohio) and Ted Poe (R-Texas) sent a letter to Treasury Secretary Timothy Geithner requesting he "dissolve" the contract with the Mets to name their stadium Citi Field. The Mets' home opener there is set for April 13.

In an interview yesterday, Kucinich said the financial behemoth is in no position to lay out cash to have its name on the Queens stadium. "It's just totally unacceptable that Citigroup should be able to spend $400 million in naming rights when they're the recipients of a massive federal bailout," he said.

Kucinich and Poe wrote that Citigroup's financial footing "has changed drastically" since the naming rights deal was struck in 2006. The agreement calls for Citigroup to pay $400 million over 20 years for the naming rights.

The Mets "are fully committed to our contract with Citigroup," said Jay Horowitz, the team's spokesman.

This will be a never-ending PR disaster for the Mets.

Ethics Schmethics: Rangel and Pals Hit the Caribbean on Corporate Dime

What, you expect rules and laws to apply to Charlie Rangel? Quite an illustrious lineup he brought along to the posh Caribbean resort. Must be great to be above the law.

High-ranking members of Congress were flown to a lush Caribbean resort this month for a three-day conference planned and paid for by several of the country's most powerful corporations - a violation of federal ethics rules, critics say.

Six members of the Congressional Black Caucus attended the 13th annual Caribbean Multi-National Business Conference in sun-drenched St. Maarten, including embattled Harlem Rep. Charles Rangel and New Jersey Rep. Donald Payne.

Three New York City officials attended, including Comptroller William Thompson and Bronx Borough President Adolfo Carrion Jr., as well as Gov. Paterson, who was the keynote speaker at a luncheon on the second day of the gathering.

The politicians were seen by The Post during the Nov. 6-9 conference, walking among the palm trees on the breezy grounds of the sprawling, terra cotta Sonesta Maho Beach Resort and Casino.

Paterson's office said he'd paid for his own travel and lodging during his visit. But other legislators enjoyed free airfare, meals and hotel rooms covered by the trip's organizer - and paid for by donations from corporations such as IBM, AT&T, Verizon, Citigroup, Pfizer, Macy's and American Airlines, a Post investigation discovered.

Officials with those companies were observed at the conference - sometimes acting as featured speakers at daily seminars and freely mingling among the pols at social events. Citigroup - which just last week received a massive bailout from the federal government - was one of the conference's biggest sponsors, ponying up $100,000 to help finance the event, according to one of the lobbyists at the gathering.

A spokesman for Citigroup told The Post the company has financially supported the conference for several years, but would not reveal an amount.

Of course, if anyone dares to criticize these freeloaders, you'll likely be called racist. Besides, these are all Democrats involved, so nothing will happen.

But according to House ethics rules, members of Congress and their staffs cannot accept multiday trips from a corporation that "employs or retains a registered lobbyist. Included in this limitation are companies, firms, non-profit organizations (including charities), and other private entities that retain or employ a lobbyist."

Though the conference's organizer is listed as New York City-based Carib News Foundation, that group pays for the event through donations from private, for-profit companies.

Furthermore, according to House rules, members of Congress must seek prior written permission from the House Committee on Standards of Official Conduct to take free multiday trips. They must also file reports with the Clerk of the House of Representatives listing all financial sponsors within two weeks of each trip.

The filings for the St. Maarten trip were due last Monday. But as of that date, only Rep. Payne's filings were available.

A spokesman for Rangel said his disclosure forms were submitted last Monday - but by the end of the week his filing hadn't turned up in the database of the Clerk of the House.

Must be a clerical error, of course.

NYC Councilmen: Hey, Let's Call It Citi/Taxpayer Field

Another non-starter, of course, from the world's most useless political body, but since it comes from that rare species, GOP New York City Councilmen, we figure it's worth noting. I understand where they're coming from, but I doubt this is going anywhere.

Two New York City Council members say that Citigroup should show its thanks for a federal bailout by sharing the naming rights to the new Mets ballpark in Queens.

The struggling bank is slated to pay $400 million over the next 20 years to name the stadium Citi Field.

The bank made the commitment years ago, when it was flush with cash. Now that Citigroup is getting billions of dollars in federal aid, Staten Island Republicans Vincent Ignizio and James Oddo say the ballpark's name should be changed to Citi/Taxpayer Field.

Of course, any story mentioning the infamous James Oddo is always worth a look. A blast from the past:

Uh, Citigroup? About Those Stadium Naming Rights...

So now that the feds are bailing out Citigroup, isn't it time the troubled outfit voluntarily withdrew from having its name on top of a new baseball stadium?

The good news for the Mets is they still have a name and a sponsor for their new stadium.

The bad news for a franchise that has had two straight late-season collapses is that it is now linked with a bank trying to stave off its own collapse.

Citigroup, which agreed in 2006 to a 20-year, $400 million contract to name the Mets’ new stadium Citi Field, has absorbed billions of dollars in losses because of the subprime mortgage crisis and the floundering economy.

Granted, that $400 million deal is almost chump change compared to the billions they're getting from taxpayers.

But how is it going to sit with investors and employees out of a job to see this outfit with their name on top of a ballfield?

I've never been crazy for corporate sponsorship of athletic facilities, but that genie was out of the bottle years ago.

Here's an idea: Since New York is the bluest of blue states and renaming schools and streets after Barack Obama seems to be all the rage, why not just be done with it and name it after him?