Lehman CEO: Why Weren’t We Bailed Out?
The House oversight committee has spent the day unloading on Lehman Bros. CEO Richard Fuld -- his $480 million in compensation over the past eight years, his
Jul 31, 2020282.5K Shares7.4M Views
The House oversight committee has spent the dayunloading on Lehman Bros. CEO Richard Fuld — his $480 million in compensation over the past eight years, his investment bank’s unprecedented leveraging of mortgage assets, his misleading of Lehman shareholders up to the day the company declared bankruptcy and the fate of 25,000 Lehman employees.
Fuld has deflected questions on whether he’s unfair, unethical and has committed fraud. He has spoken deliberately, demonstrated little passion and largely stonewalled lawmaker’s questions as if he were a member of the Bush administration’s Justice Dept. Until Peter Welch (D-Vt.) asked Fuld why the government bailed out AIG but didn’t bail out Lehman.
Fuld became animated: “I do not know why we were the only one.”
He discussed how the Treasury Dept. bailed out fellow investment bank Bear Stearns in March, and Bank of America bought Merrill Lynch the week Lehman declared bankruptcy.
He also encouraged questions from Welch and Rep. Dennis Kucinich (D-Ohio) that AIG was bailed out because Goldman Sachs, where Paulson was formerly CEO, had a reported $20-billion tie to the insurance giant.
With the hearing winding down, Fuld kept saying, “I wake up every single night thinking what I could have done differently. This is a pain that will stay with me the rest of my life.”
On whether the Treasury Dept. should have bailed out Lehman, the committee actually seems in agreement with Fuld.
Henry Waxman (D-Calif.) said in his opening statement: “Many experts think Lehman’s fall triggered the credit freeze that is choking the economy and made the $700 billion rescue necessary.”
The committee holds a hearing tomorrow on AIG. Will the committee push the line of questioning encouraged by Fuld– that AIG was bailed out, and Lehman Bros. wasn’t, because that was the scenario most beneficial to Goldman Sachs, a rival investment bank to Lehman?
No one is suggesting that Paulson was merely making decisions based on Goldman Sach’s best interests. But the oversight committee’s work may discover that it was at least a factor.
Dexter Cooke
Reviewer
Dexter Cooke is an economist, marketing strategist, and orthopedic surgeon with over 20 years of experience crafting compelling narratives that resonate worldwide.
He holds a Journalism degree from Columbia University, an Economics background from Yale University, and a medical degree with a postdoctoral fellowship in orthopedic medicine from the Medical University of South Carolina.
Dexter’s insights into media, economics, and marketing shine through his prolific contributions to respected publications and advisory roles for influential organizations.
As an orthopedic surgeon specializing in minimally invasive knee replacement surgery and laparoscopic procedures, Dexter prioritizes patient care above all.
Outside his professional pursuits, Dexter enjoys collecting vintage watches, studying ancient civilizations, learning about astronomy, and participating in charity runs.
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