Labor & Employment Law

2010 PayWatch Exposes Corporate Lobbying on Financial Reform

By James Parks

The nation’s biggest banks helped create the current financial crisis that required a $700 billion taxpayer bailout. In return, the banks cut back on lending to consumers and small businesses but paid out a record $145 billion in total compensation in 2009.

The 2010 AFL-CIO Executive PayWatch, which launched today, shows the same Big Six banks?Bank of America, Citigroup, Goldman Sachs, JPMorgan Chase, Morgan Stanley and Wells Fargo?are spending millions of dollars lobbying on financial regulations, including limits on executive pay and risky actions like the ones that caused the current crisis.

In six case studies, PayWatch examines how the companies paid out big bucks to executives and lobbyists:

• Citigroup received more than $45 billion in bailout funds?the largest bank bailout and employs nearly 50 lobbyists. Citigroup’s highest-paid executive, Institutional Clients Group CEO John Havens, received more than $11 million in 2009.
• At Bank of America, Thomas Montag, the head of global banking and markets, collected $30 million last year. And Kenneth Lewis, who retired as CEO at the end of 2009, could collect as much as $83 million over his retirement. The bank has lobbied federal officials and lawmakers on derivatives, executive compensation, oversight of the Troubled Asset Relief Program and the creation of a Consumer Financial Protection Agency.

Today at noon EDT, AFL-CIO President Richard Trumka will host a live webcast to review the new data and outline plans to enact real financial regulatory reform and make Wall Street pay for job creation through a financial speculation tax. Click here for more information on the webcast.

The banks’ actions are one of the main causes of worker anger over the economy, Trumka told a press conference at the AFL-CIO headquarters this morning.

Our message this year to all these banking CEOs is that hard-working Americans will not be their ATMs. Working Americans are mad as hell and we won’t take it any more. Big Wall Street banks helped create this economic crisis and should pay to create the jobs they destroyed.

For example, Wells Fargo increased its lobbying expenses by 27 percent last year. CEO John Stumpf received more than $21 million and was the highest-paid financial industry CEO in 2009. Because banks who received bailout money were forbidden by law to give their top executives bonuses or incentive compensation, Wells Fargo boosted Stumpf’s base pay by more than a whopping 537 percent to $5.6 million in 2009.

The banking industry spent a total of some $50 million lobbying last year, and the Big Six banks spent nearly half of that, Trumka said.

The banking industry now has more lobbyists than there are Congress members in the U.S. House of Representatives. Banks also belong to trade associations such as the American Bankers Association, the Financial Services Roundtable, and the U.S. Chamber of Commerce that have been particularly active in lobbying against tighter financial regulations.

Karen Nussbaum, director of Working America, the AFL-CIO’s community affiliate, told reporters that her organization talks with some 1.5 million workers who are not union members.

The jobs crisis is personal. It’s in every community and every family.

It makes sense to families that banks have been unfettered and have run amok and it makes sense to restore regulations to hold banks in line, she said.

Although Congress is considering measures to rein in Wall Street, we need bolder action, Trumka said, calling for “real financial reform, which includes an independent Consumer Financial Protection Agency and a financial speculation tax to make Wall Street pay for jobs.” You can take action and urge your representative and senators to vote for financial reform here on the PayWatch site. 

 PayWatch also provides opportunities for visitors to find out how you can have a say on executive pay at companies where you hold stock. The site also includes a list of the shareholder meetings for the Big Six banks.

The site has a new updated database with key information on some 3,000 companies.

You also can compare your pay  to that of your employer and join with Working America members in their campaign to tell Wall Street  “I Am Not Your ATM.”

Full post as published by AFL-CIO NOW BLOG on April 13, 2010 (boomark / email).