By Pam Martens: July 25, 2012
It was revolting enough that Sandy Weill was appointed to the American Academy of Arts & Sciences after blazing a trail of poverty across America with his warped and idiotic vision of financial supermarkets. (As if serious investors stroll into a brokerage firm, load up their shopping cart and breeze through the express check out.) As Robert Scheer said in April at The Nation: “How evil is this? At a time when two-thirds of US homeowners are drowning in mortgage debt and the American dream has crashed for tens of millions more, Sanford Weill, the banker most responsible for the nation’s economic collapse, has been elected to the American Academy of Arts & Sciences.”
But to hear Weill this morning on CNBC channeling Gandhi was too much for anyone who had a front row seat at his house of horrors and watched him suck $785 million in compensation out of his Frankenbank in a mere five years.
The man who parked tens of billions of dollars in off balance sheet Special Investment Vehicles (SIVs) while Chairman and CEO of Citigroup, lectured viewers this morning that off balance sheet debt is a bad thing for banks and the practice should end. Having conveniently lost his memory that he built Citigroup into a sprawling, unmanageable, colossus of 2,000 subsidiaries and affiliates, he lectured the public today that “Good things are simple…”
The guy who used arm-twisting, lobbying, political maneuvering, and tit-for-tat palm greasing to push through the repeal of the Glass-Steagall Act in order to merge Travelers Group (insurance) with Salomon Brothers (investment bank) with Smith Barney (brokerage firm) and then finally with Citibank to create Citigroup, now wants a redo. The financial supermarket model should become Mother Teresa Banks – simple, pure, and transparent. “I would like to see the banks become simply a deposit taking institution…it has to have everything on its balance sheet there is no such definition or word as off balance sheet …”
Weill had the ultimate gall to claim on CNBC today that he wasn’t responsible for repealing the Glass-Steagall Act – that it had already been dismantled by the time of his Citigroup merger. It’s a preposterous lie and he knows it. In his autobiography, The Real Deal, page 269, Weill writes: “Around this time, we had been discussing strategic options with Marty Lipton and his team of banking lawyers at Wachtell Lipton. The firm’s lawyers captured my attention by claiming they could help us circumvent the legal issues involved with merging with a bank. Two powerful federal laws, the Bank Holding Company Act of the 1950s and the Depression-era Glass-Steagall Act, stood in our way – these laws prohibited commercial banks from diversifying and specifically ruled out affiliation with securities firms and insurance companies.”
Maybe Weill was thinking today of what kind of America his grandchildren will have, how they will remember him, what the history books will say in 20 years. Whatever his motive, it was far too little and far too late. When he wants to talk clawback, I’ll be all ears.