Mortgage Company Heads Grilled By Congress

"....There's a complete disconnect with reality," said Rep. Henry Waxman, D-Calif., chairman of the House Oversight and Government Reform Committee. CEOs now receive about 600 times what the average worker earns, compared to about 40 times in 1980." Is there a deliberate design flaw in the Economic & Judicial systems of rule and law, lopsidedly benefiting corporate greedy guts? Where science and facts play second fiddle to the power of the Mouth backed by money?

There is not an intelligent being alive that could not understand Natural Capitalism with justice based on natural laws, facts and unfettered science; where human life comes first and foremost, the primary factor upon which justice and profit is gaged: the greater the health and prosperity of all, the greater the justice and profits for all (simple numbers game). So who CHOKED THE SYSTEM, on top of scientific suppression of advanced energy systems from the late 1940's (Evolving Advanced Energy Systems without which Human Life Cannot Survive) ?

Mild shock and disbelief barely registered in the nation of the most productive, overworked, underpaid, underinsured, vacation deprived, low paid slave/workers in the world, as they watched their bridges fall down, while their taxes, gas and energy costs continued skyrocketing to uncharted realms, as the masses stagnated in unmovable traffic, and government departments threatened to close due to lack of funds - On the bright side, the worldwide corporate 2% greedy guts, individually, had aplenty, more wealth than 30 nations combined, apiece.... irrelevant to who is paying for their errors (as in subprime loans).

As common sense in science is lost with the continued stagnation of our energy base and deep troubling theoretical foundational issues in physics, so too, Civilization's Survival Parameters fly out of sight, out of mind, along with the values and morals inherent within new scientific understanding which new energy systems would reveal. Scientific Stagnation bodes an ill wind to evolution, sustainability, and survival as "cycles of humiliation, dumbing us down, violence, and Unrestrained Corporate Greed prompting resource wars with nuclear finality" join hands with global warming and ecological imbalance to precipitate the historical "rise and fall of civilization" - a Tsunami accelerating toward us with a far more spectacular event than the legends and myths of 'Atlantis and Lemuria"........ had more people known that Energy from Corn (or going backwards to a dimwitted concept of radioactive nuclear power application ) sounded a wee bit kindergartenish and senile for the twenty first century......the Future may have had a chance.


Mortgage Company Heads Grilled By Congress
WASHINGTON, March 7, 2008

Lenders Under Fire
Congress is asking tough questions of mortgage lenders who made millions while the many Americans who borrowed from them lost their homes. Chip Reid reports

(CBS/AP) Three corporate executives called in for a shaming by Democratic lawmakers Friday defended raking in hundreds of millions of dollars despite contributing to the subprime mortgage crisis that has their companies reeling from losses and the nation on the edge of recession. "There's a complete disconnect with reality," said Rep. Henry Waxman, D-Calif., chairman of the House Oversight and Government Reform Committee. But the CEOs testifying before the committee, Angelo Mozilo of Countrywide Financial Corp.; Stanley O'Neal, formerly of Merrill Lynch & Co; and Charles Prince, formerly of Citigroup Inc.; defended their pay as appropriate. "As our company did well, I did well," said Mozilo, founder of Countrywide, the nation's largest mortgage lender and a key player in the subprime problem. "But when our company did not do well, as in 2007, my direct compensation and the value of my holdings declined materially, which is as it should be." Republicans on the committee generally agreed. "This is a hearing in search of bad guys," said Rep. Darrell Issa, R-Calif. "All of you complied with the transparency rules and the best practices rules." The hearing was the second held by Waxman on the issue of executive pay, which Forbes magazine said averaged $15.2 million for the CEOs in the largest 500 U.S. companies in 2006, an increase of 38 percent in one year. The House Government Reform Committee last December also looked at large, publicly traded companies that hire compensation consultants who are receiving millions of dollars from corporate executives whose compensation they were supposed to assess. Republicans on the committee questioned the need for the hearing, saying it falls outside the panel's primary role of investigating waste, fraud and abuse in the federal government. "The impact of corporate executive compensation is debatable," said Rep. Tom Davis of Virginia, top Republican on the committee. "Fine, but that debate ... should not degenerate into a sanctimonious search for scapegoats." Rep. Waxman questioned how all three CEOs could profit handsomely at a time when their companies were losing billions of dollars and stock values were plunging. "You're in the middle of an enormous debacle," Waxman said. "It seems like everyone is hurting except for you." "It's only in the wacky world of CEOs where you get severance for failing," said Nell Minow, editor of The Corporate Library and one of the economic experts testifying. Committee figures showed that Countrywide suffered a $1.2 billion loss in the third quarter of 2007 and then lost another $422 million in the fourth quarter. By the end of the year, the company's stock had fallen 80 percent from its five-year peak in February. During the same period, Mozilo received a $1.9 million salary, $20 million in stock awards contingent upon performance and sold $121 million in stock. Some of those stock sales occurred at the same time the company was borrowing $1.5 billion to repurchase its shares. In 1969, Mozilo, a butcher's son from New York, co-founded Countrywide and turned a one-room office into a $500 billion home loan empire while turning himself into one of the nation's highest paid CEOs, reports CBS News correspondent Chip Reid. Rep. Elijah Cummings, D-Md., questioned Mozilo's insistence - documented in a November 2006 e-mail - that he be reimbursed for taxes owed when his wife traveled on Countrywide's corporate jet. Mozilo related how he had started Countrywide from the kitchen of his small New York apartment. He said his direct compensation and the value of his stock holdings declined substantially last year and he had not received, and will not receive, a bonus for 2007 and 2008. Mozilo also said he would give up some $37 million in severance pay if Bank of America proceeds with plans to acquire Countrywide. His defense of his compensation may fall on some unsympathetic ears however. While countless Countrywide customers faced foreclosure on their homes, Mozilo enjoyed his $15 million mansion and a high-flying lifestyle that included an abundance of expensive perks. At the same time, thousands of Countrywide employees lost their jobs, reports Reid. O'Neal received a retirement package of $161 million when he was pushed out as Merrill Lynch CEO last October. But the committee said that if the company had terminated O'Neal for cause rather than letting him retire, he would not have been entitled to $131 million of that in unvested stock and options. During 2007, the firm reported $18 billion in writedowns related to subprime and other risky mortgages. O'Neal countered that he had received no bonus in 2007 and no severance pay. He was defended by John Finnegan, chairman of Merrill Lynch's compensation committee. "All of the $161 million related to prior-period performance and all were amounts to which Mr. O'Neal was entitled as a retirement-eligible employee." The lawmakers also asked why Citigroup, which saw its stock fall 48 percent at the end of 2007 compared with a year earlier, would award Prince a cash bonus worth $10.4 million after he stepped down as CEO last November. He also received $28 million in unvested stock and options and $1.5 million in annual perquisites upon his departure. "I'm proud of my accomplishments," Prince said, speaking of his contributions over almost three decades to Citigroup's growth and the company's efforts to assist homeowners facing foreclosure. Rep. Tom Davis of Virginia, top Republican on the committee, noted that Mozilo's total compensation package in 2007 was about $22 million, half that of 2006, while Prince also saw his compensation halved in 2007 to about $12 million. Linking executive pay to the subprime crisis "only seems to muddle the issue further," he said. Several of the executives did acknowledge public resentment over the fact that large company CEOs now receive about 600 times what the average worker earns, compared to about 40 times in 1980. The question, said Richard Parsons, chairman of Citigroup's personnel and compensation committee, is "how do we remain competitive without contributing to something that could be tearing at the fabric of society." Reid reports that some Republicans said today's hearing was nothing more than a search for scapegoats in the mortgage crisis, arguing that there's already plenty of blame to go around, even right here in Congress.