A young woman walks up to an elderly woman asking if she had lost a purse. She says "No.", and the young woman proceeds to tell her the purse has an envelope with a couple thousand dollars in it, but there
is no identification. A clean-cut young man overhears the conversation and suggests they try to find the owner. The girl asks what to do if they can't find the owner, and the young man suggests they simply split the money.
This little scam is called a "pigeon-drop." The elderly woman has been taken. She later finds she's holding a purse with an envelope full of newspaper clippings. The scam works well because it relies on general trust and the victim's feeling of being in control. Neither could be farther from reality.
Citigroup recently gave Wall Street, and the taxpayers, good news when they posted profits for the first two months of the year.1 Yet, Citi is requesting authorization to increase shares so they can pay employees!2 Does this sound like someone is scamming us? All I can say is, I warned you.
While the taxpayers were standing there like fools holding the envelope full of worthless paper, Citi had taken off with the real money paying millions to employees because a fancy trip to the Bahamas had to be canceled! 1900 sales agents were instead paid $5,000 each and 2,000 brokerage advisers were each handed $3,000 debit cards.3
Citi executives must have also been taking notes from John Thain, as they are also blowing between $3 and $10 million on an office renovation.4
And while our attention is focused on AIG, Fannie Mae and Freddie Mac are also paying retention bonuses to their worthless executives.5 Freddie is handing over $1.5 million to Michael Perlman, an Executive Vice President. He has already collected $300,000 of it. Two other executives, Interim CFO David Kellermann and Senior Vice President Michael May will get $850,000 and $700,000 respectively.
Wells Fargo is paying a Wachovia executive $8,000,000 to hang around. This is on top of his $20.7 million compensation package, a token collected from the rubble of Wachovia's collapse. And Morgan Stanley is handing out $3 billion in retention bonuses, while 200 Merrill Lynch executives took home additional money as well.Of course, the "punishment" handed out today related to executive bonuses was written with the perfect loophole in it. The feel-good bill imposes a 90% tax on bonuses for those earning more than $250,000 working for companies receiving more than $5 billion in bailout money.6
So, if you're a Wall Street criminal, what did you do today? I'll bet board rooms across the country are filled with compensation committees reducing executive salaries to $249,000 and planning huge bonuses to make up for the loss.
Lock the front door and they come in the window. Close the window and they come through the garage. Lower the garage door and they come through the doggie door. The problem is, they keep robbing us because lawmakers can't think outside of the moment. If one's been hanging around a known pick-pocket who quickly walks away, it would be wise to check all pockets before he gets out of sight!
- Minneapolis/St. Paul StarTribune - Citi CEO says bank posted a profit in first 2 months of year - will it continue?
- ECommerce Journal - Citi and Morgan Stanley issuing additional shares to pay its employees
- Newser - Citigroup Paid Employees $13M for Scrapped Resort Trip
- USA Today - Citi spending millions on headquarter renovation
- USA Today - Freddie, Fannie to also give executive bonuses
- USA Today - U.S. House OKs bill for tax on AIG bonuses; Cuomo gets list