Tuesday, October 07, 2008

Accepting responsibility

I'm quite prepared to acknowledge that more than a few things annoy me.

I post regularly about my irritation with things like bad planning, management incompetence, lack of communication, the mangling of the language, bigotry.

There's another thing which annoys the hell out of me that's just cropped up again - leaders saying they accept full responsibility for their actions.

We get it from politicians, leaders of business, of the armed services, of the police.

After their actions have caused problems in the lives of others, caused people to lose their jobs, their homes, their lives in some cases, the waste-of-space 'leader' stands up and says he accepts full responsibility for his actions.

And you know what accepting responsibility actually means to him?


Absolutely nothing.

He's affected in no way whatsoever.

It's the ultimate insult to our intelligence. The final middle finger gesture to the people whose lives they've damaged.

The latest to do it is the former CEO of Lehman Brothers, the bankrupt investment bank. Richard Fuld was testifying before the House Committee on Oversight and Government Reform, chaired by Rep. Henry Waxman.

Reading the same script which so many 'leaders' have read before he told the committee:

"I take full responsibility for the decisions that I made and for the actions that I took...this is a pain that will stay with me for the rest of my life..."

What a fatuous remark it is, stating the bleedin' obvious. He made the decisions, so how could he be anything but responsible for them?

But his pain will be eased, I'm sure, by the 'compensation' (as salary packages are called these days) he paid himself while steering the good ship Lehmen onto the rocks.

The firm, in the days before it filed for bankruptcy, sought board approval to pay three departing executives more than $20 million, according to Waxman.

"Even as Mr. Fuld was pleading ... for a federal rescue, Lehman continued to squander millions on executive compensation," Waxman said.

Some members of the committee took particular issue with Fuld for his salary and bonuses. Fuld received a $22 million bonus in March. Waxman added that Fuld "will walk away a wealthy man."

Waxman displayed a chart that detailed what he said was $480 million in compensation since 2000 and pointed out that Fuld owned a $14 million oceanfront home in Florida, an extensive art collection and another home in Sun Valley, Idaho.

"Your company is now bankrupt, the economy is in a state of crisis, yet you get to bring home $480 million," said Waxman.

Naturally, Fuld disputed the tally of his earnings.

Fuld said that Waxman's figure included stock holdings, while Waxman insisted it did not.

The reality is that he took tens, almost certainly hundreds, of millions of dollars out for himself, which he will keep.

I'm amazed he was able to keep a straight face as he 'took full responsibility.'

I would like one of the committee members to ask him:

You have told us you accept full responsibility. Please detail to this committee exactly what that means. How will accepting responsibility manifest itself?

A report on the hearing is here.


Abu Dhabi Blogger said...

Unfortunately the investment banking industry gives people like Fuld a lot of power and money. They invest in pathetic instruments like mortgage-backed securities and what happens? A 158-year old bank with US$ 600bn (Yes, that was their balance sheet size) in assets is led to its demise. Hunger, greed and the utter lack of ethics has plagued this industry for ever. Enron, Worldcom and now Lehman are the largest examples. BTW this is one of the highest paid professions. Sad that the price of the decisions of a hungry bastard is to be paid by innocent tax payers.

Seabee said...

With government collusion by deregulation and no-one keeping their excesses in check they were able to enrich themselves with other people's money. Everything based on short term results, vast bonuses based on the share price at the end of the year so they did anything and everything to get the share price up. Good for the business? Who cares, it was all about a few people making a lot of money and to hell with the company and everyone else. It always was a recipe for disaster.

Duffy said...

Fuld was also the one who completely ignored all warnings from subordinates. Several of them sounded the alarms very early and he didn't want to hear it. It is believed he lost north of $500MM in one day with his position in Lehman. Waxman is, however, correct that he will walk with more money than you or I will ever see. Poor dear may have to sell some of his art. Heaven forfend!

Keefieboy said...

Thieves by any other name.

Anonymous said...

Well, you could be branded anything from a bleeding heart liberal to a communist if you dared to criticise stuff like excessive bonuses....

tee said...

How come no one is screaming terrorism!?! This is economic murder. To literally rob people of their money by gambling it off, and taking a whopping share of the profits while you know very well you are not doing well. Should these bankers not be charged with a crime? How come BILLIONS have just gone poof! into thin air and no one is charging these people with a crime. Instead they are being given even more money to gamble off - $700,000,000,000 to be precise! Thats like offering terrorists a bailout package of MORE WEAPONS just after we have seen them fly planes into the WTC. Am I missing something here or is it possible to get away with ANY CRIME if you are a high flying suited-booted banker!