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| TIME | SPEAKER | TEXT |
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| 00:00:41 |
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COMMITTEE WILL COME TO ORDER. GOOD MORNING. BEFORE WE BEGIN, I WOULD LIKE TO EXTEND A WARM WELCOME... |
| 00:01:40 |
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I WOULD LIKE TO JOIN WITH THE CHAIRMEN AND WELCOMING MY COLLEAGUE AS A FELLOW CALIFORNIAN. I MY ONLY... |
| 00:01:55 |
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WE WILL TAKE ANY DEGREE. DR. CHAO? |
| 00:02:05 |
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THANK YOU, GERMANY -- CHAIRMAN. IT IS CHU. -- IT IS JUDY CHU. THIS JURISDICTION IT WILL ALLOW US... |
| 00:03:04 |
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THANK YOU, DR. CHU. THERE IS LITTLE DOUBT THAT EXECUTIVE COMPENSATION SCHEMES WERE A CONTRIBUTING... |
| 00:07:41 |
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THANK YOU. I ASK UNANIMOUS CONSENT THAT MINE AND ALL MEMBERS OPENING STATEMENTS BE PLACED IN RECORD... |
| 00:07:50 |
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WITHOUT OBJECTION, SO ORDERED. |
| 00:07:55 |
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I JOIN WITH YOU IN THE COMMENT YOU MADE IN YOUR OPENING STATEMENT THAT WE NEED TO EMPOWER THE STOCKHOLDERS... |
| 00:12:02 |
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THANK THE GENTLEMAN FOR HIS STATEMENT. TODAY'S HEARING WILL CONSIST OF TWO PANELS. OUR FIRST PANEL... |
| 00:13:10 |
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I DO SO SWEAR. |
| 00:13:13 |
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LET THE RECORD SHOWED HE RESPONDED IN THE AFFIRMATIVE. WE GENERALLY MOVE FORWARD WITH THE LIGHTS ON.... |
| 00:13:37 |
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YOU MAY REGRET THAT, MR. CHAIRMAN. I WANT TO THANK YOU, MR. CHAIRMAN, MORE INVITING ME AND THE RANKING... |
| 00:29:04 |
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THANK YOU VERY MUCH FOR YOUR TESTIMONY. THANK YOU FOR THE JOB YOU HAVE DONE. LET ME BEGIN BY ASKING... |
| 00:29:20 |
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YOU WILL HAVE TO ASK THE SEVEN COMPANIES. I FOUND THAT THE SUBMISSIONS DID NOT ADEQUATELY ADDRESS... |
| 00:29:34 |
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HOW YOU DEAL WITH THE CONTRACT SITUATION, WHERE A PERSON HAS A CONTRACT WHICH HAS BEEN SIGNED, AND... |
| 00:29:50 |
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THE LAW THAT WAS ENACTED GIVES ME THREE OPTIONS WHEN IT COMES TO OLD CONTRACTS FOR COMPENSATION THAT... |
| 00:32:22 |
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THANK YOU VERY MUCH. THIS IS AIG. -- THIS IS ON AIG. CAN YOU DO ANYTHING TO STOP AIG FROM PAYING... |
| 00:32:52 |
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YOU POSE THE QUESTION WHICH THE SPECIAL MASTER WILL HAVE TO ADDRESS VERY QUICKLY IN 2010. -- WINDOWS... |
| 00:33:44 |
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YOU HAVE TO RECOGNIZE, PEOPLE FEEL THAT IF YOU FAIL, THAT YOU SHOULD NOT BE REWARDED FOR YOUR FAILURES.... |
| 00:34:06 |
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THANK YOU, MR. CHAIRMAN. . . THEY WERE ALREADY IN TROUBLE AND HAD A PROBLEM WITH THE COST OF DOING... |
| 00:34:57 |
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I GUESS THAT IS FAIR TO SAY. I HAVE ENOUGH PROBLEMS WORKING ON EXECUTIVE COMPENSATION, BUT I GUESS... |
| 00:35:08 |
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WE OWN THOSE COMPANIES BECAUSE WHATEVER AMOUNT WE TOOK, WE TOOK AND DO NOT EXPECT TO GET IT BACK BECAUSE... |
| 00:35:19 |
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THAT IS CORRECT. |
| 00:35:23 |
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CHRYSLER AND FIAT. I WILL LEAVE THOSE COMPANIES ALONE FOR A MOMENT AND CONCENTRATE ON THE BIG THREE.... |
| 00:35:49 |
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I THINK THAT IS CORRECT. IN OUR CONVERSATIONS WITH AIG, THAT IS A FAIR ASSUMPTION. PROVIDED US AND... |
| 00:36:44 |
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I DEAL WITH EACH OF THE SEVEN DIFFERENTLY AS YOU POINT OUT AND YOU ARE ABSOLUTELY RIGHT THAT MY PRIMARY,... |
| 00:36:57 |
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NOW I GET INTO A LITTLE BIT HARDER PART OF THIS. LOOKING AT B OF A AND AIG, MORE THAN HALF OF THEIR... |
| 00:37:41 |
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I CAN'T ANSWER THAT QUESTION BECAUSE I'M NOT SURE THE VAGUERIES AND THE -- THE VARIOUS REASONS THAT... |
| 00:37:55 |
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BUT YOU'RE SO NICE. |
| 00:37:56 |
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I'M SORRY? |
| 00:37:58 |
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WELL, THAT'S WHAT YOU SAY. THEY MAY HAVE LEFT BECAUSE THEY HAD ANOTHER JOB OPPORTUNITY. THEY MAY HAVE... |
| 00:38:16 |
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FOLLOWING UP ON THAT CONCERN BECAUSE THE DETAILS OF WHAT YOU, THE BREADTH & IN WHICH YOU CAN NEGOTIATE,... |
| 00:39:09 |
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YES. AND THE STATUTE AGREES WITH YOU IN SPELLING OUT THAT ONE IMPORTANT FACTOR I MUST CONSIDER IS... |
| 00:39:26 |
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IF I CAN ASK JUST ONE QUICK FOLLOW UP. IF THAT'S THE CASE, SHOULD WE LOOK AT A STATUTE THAT ENVISIONS... |
| 00:39:55 |
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YOU OTHER AND MEMBERS OF CONGRESS ARE LOOKING AT THE WHOLE QUESTION OF CORPORATE GOVERNANCE, HOW TO... |
| 00:40:12 |
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THANK YOU. THANK YOU, MR. CHAIRMAN. |
| 00:40:16 |
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I'M WONDERING IF WALL STREET WILL CURVE THE SUCCESSFUL BONUS CULTURE. DO YOU THINK THAT WILL HAPPEN?... |
| 00:40:23 |
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AGAIN, IT'S A MURKY CRYSTAL BALL, MR. CHAIRMAN. |
| 00:40:28 |
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OKAY. CONGRESSMAN CLAY FROM MISSOURI. |
| 00:40:32 |
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THANK YOU, MR. FEINBERG FOR BEING HERE. I APPLAUD YOUR DILIGENCE IN THE DIFFICULT TASK THAT WAS SET... |
| 00:41:25 |
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I'M NOT A HISTORIAN IN TERMS OF THE CAUSES OF THE GROWTH. I CONFRONTED UNDER THE STATUTE AND THE REGULATIONS... |
| 00:42:03 |
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YOU KNOW, I HAVE LONG BEEN CONCERNED ABOUT GUARANTEED BONUSES, AS WE HAVE SEEN WITH AIG, GUARANTEED... |
| 00:43:01 |
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IN ORDER TO HOLD T.A.R.P. RECIPIENTS FULLY RESPONSIBLE, IS THERE ANY POSSIBILITY OF NULLIFYING PRIOR... |
| 00:43:09 |
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YES. WE'VE BEEN VERY SUCCESSFUL IN DOING THAT. AS I MENTIONED TO THE CHAIRMAN AND THE RANKING MINORITY... |
| 00:43:43 |
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HAVE ANY EMPLOYEES OR RECIPIENTS TAKEN LEGAL ACTION BECAUSE OF YOUR -- BECAUSE OF THOSE CORPORATIONS'... |
| 00:43:49 |
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NO. |
| 00:43:50 |
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NO. OKAY. |
| 00:43:56 |
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WE'RE VERY PERSUASIONVEPERSUASIVE. |
| 00:44:00 |
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HAVE THE HUGE BONUSES LED TO A CULTURE OF ENTITLEMENT. IN OTHER WORDS, DO EXECUTIVES NOW EXPECT PACKAGES... |
| 00:44:12 |
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I THINK HUGE GUARANTEED BONUSES UNDERCUT PERFORMANCE. IF YOU'RE GUARANTEED A HUGE CASH SALARY OR YOU'RE... |
| 00:44:42 |
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THANK YOU FOR YOUR RESPONSE, MR. FEINBERG. |
| 00:44:45 |
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THANK YOU. |
| 00:44:47 |
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MR. CHAIRMAN, I YIELD BACK. |
| 00:44:48 |
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THANK YOU VERY MUCH. I YIELD TO THE GENTLEMAN FROM INDIANA, MR. BURTON? |
| 00:44:54 |
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THANK YOU, MR. CHAIRMAN. HERE'S A QUOTE BY AN EXECUTIVE FROM ONE OF THE COMPANIES, THERE'S NO QUESTION... |
| 00:45:36 |
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ABSOLUTELY IT WOULD DAMAGE THE COMPANY AND THAT ISN'T WHAT WE DID. WE TOOK 13 -- CONGRESSMAN BURTON,... |
| 00:46:10 |
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LET ME INTERRUPT. |
| 00:46:12 |
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YEAH. WELL, IF A PERSON HAS A CONTRACT AND YOU SAID -- I THINK I USED THE TERM "ALLEGED CONTRACTS,"... |
| 00:46:37 |
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THE RATIONALE WOULD BE, "A," THAT THEY WANT TO STAY AT THE COMPANY AND REDEEM THAT STOCK IN VALUE... |
| 00:46:48 |
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WELL, I CAN UNDERSTAND THAT YOU BELIEVE THESE PEOPLE HAVE THE BEST INTERESTS OF THE COMPANY AT HEART... |
| 00:47:26 |
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IT SURE DOES. |
| 00:47:28 |
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WHAT CAN YOU DO ABOUT THAT? |
| 00:47:30 |
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I THINK THAT IF YOU LOOK AT THE LEVELS OF TOTAL COMPENSATION THAT WE ESTABLISHED IN OUR DETERMINATION,... |
| 00:47:45 |
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THEY ALREADY HAVE. |
| 00:47:46 |
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SOME HAVE, BEFORE MY RECOMMENDATIONS. |
| 00:47:49 |
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FIRST OF ALL, I MEAN, I UNDERSTAND YOU'RE DOING WHAT YOU'VE BEEN INSTRUCTED TO DO. BUT IT DOESN'T... |
| 00:48:28 |
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UNDER THE LAW I MAKE -- I HAVE FINAL AUTHORITY, NONAPPEALABLE. THESE DECISIONS ARE MINE AND MINE... |
| 00:48:39 |
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BUT HE DOESN'T -- I MEAN, ONCE YOU MAKE A DECISION, YOU DON'T SAY TO HIM, THIS IS WHAT MY RECOMMENDATION... |
| 00:48:47 |
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UNDER THE LAW AS WRITTEN, THE REGULATIONS, AFFORD ME FINAL BINDING AUTHORITY TO ISSUE THOSE DETERMINATIONS.... |
| 00:48:54 |
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THAT'S A TREASURY REGULATION. IT'S NOT A LAW, IS IT NOT? |
| 00:48:57 |
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THAT'S T |
| 00:49:01 |
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AS FAR AS ACCOUNTABILITY IS CONCERNED, I AM NOT INFERING YOU ARE NOT DOING A GOOD JOB, I AM JUST SAYING... |
| 00:49:10 |
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I ANSWER TO THIS COMMITTEE AND OTHER COMMITTEES WITH OVERSIGHT. |
| 00:49:15 |
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YOU ARE A BIZARRE, YOU MAKE THE DECISIONS, THAT IS IT? -- YOU ARE THE OF CZAR. IF THESE PEOPLE LEAVE... |
| 00:50:18 |
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MY RESPONSE TO YOU, CONGRESSMAN, IS THIS. I HAVE TRIED MY BEST IN THIS REPORT TO IMPLEMENT THAT STATUTORY... |
| 00:50:52 |
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MR. CHAIRMAN, MAY I HAVE ONE FINAL QUESTION, PLEASE? |
| 00:50:56 |
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I'D BE DELIGHTED TO YIELD THE GENTLEMAN AN ADDITIONAL MINUTE. |
| 00:50:59 |
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THE FEDERAL RESERVE'S ISSUED GUIDELINES UNDER WHICH THE FED WOULD REVIEW, IF NECESSARY, OR AMEND OR... |
| 00:51:08 |
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THAT'S JUST COME OUT LAST WEEK, YES. |
| 00:51:10 |
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YEAH. THAT REALLY CONCERNS ME BECAUSE WHAT WE'RE TALKING ABOUT IS YOU OR SOMEBODY GOING BEYOND WHERE... |
| 00:51:27 |
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CONGRESSMAN, MY LIMIT, WHAT I'M DOING OF THESE SEVEN -- AND ONLY THESE SEVEN COMPANIES -- WHAT THE... |
| 00:51:40 |
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THANK YOU, MR. CHAIRMAN. |
| 00:51:41 |
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THANK YOU. |
| 00:51:44 |
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THANK YOU VERY MUCH. AND I NOW YIELD FIVE MINUTES TO THE GENTLEWOMAN FROM OHIO, MISS MARCY CAPTURE.... |
| 00:51:55 |
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THANK YOU, MR. CHAIRMAN, VERY MUCH. MR. FEINBERG, THANK YOU FOR COMING TODAY. FROM WHOM DID YOU RECEIVE... |
| 00:52:05 |
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I RECEIVED THE FIRST CALL FROM THE DEPUTY SECRETARY OF THE TREASURY, NEIL WOLLEN. |
| 00:52:13 |
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WHO ELSE DID YOU HEAR TO PRIOR TO THE APPOINTMENT? |
| 00:52:15 |
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THE ONLY OTHER PERSON IS THE SECRETARY TO THE TREASURY. |
| 00:52:18 |
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AND APPROXIMATELY WHEN DID THOSE CALLS HAPPEN? |
| 00:52:20 |
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I'M SORRY? |
| 00:52:22 |
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WHEN DID THOSE CALLS HAPPEN? EARLIER THIS YEAR? |
| 00:52:24 |
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YES, I THINK ABOUT FIVE OR SIX MONTHS AGO. |
| 00:52:26 |
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ALL RIGHT. IS YOUR FEDERAL POSITION CLASSIFIED AS SCHEDULE "C," OR ARE YOU CLASSIFIED AS CIVIL SERVICE... |
| 00:52:34 |
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SPECIAL GOVERNMENT EMPLOYEE. |
| 00:52:35 |
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SPECIAL GOVERNMENT EMPLOYEE? |
| 00:52:36 |
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YES. |
| 00:52:37 |
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DOES THAT MEAN YOU HAVE A SPECIAL CONTRACT WITH THE TREASURY? |
| 00:52:39 |
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I BELIEVE THAT IS THE CASE. |
| 00:52:40 |
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ALL RIGHT. AND THAT'S A MATTER OF PUBLIC RECORD? |
| 00:52:42 |
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YES, IT IS. |
| 00:52:44 |
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THANK YOU. FOR WHOM DID YOU WORK PRIOR TO YOUR CURRENT POSITION? |
| 00:52:50 |
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I WAS IN A PRIVATE LAW FIRM IN PRIVATE PRACTICE. |
| 00:52:52 |
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OKAY. AND COULD YOU STATE THE NAME OF THAT FIRM FOR THE RECORD? |
| 00:52:55 |
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QUESTION, THE NAME OF THE FIRM IS FEINBERG, ROSEN, LLP. |
| 00:52:59 |
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ALL RIGHT. AND WHERE ARE THEY LOCATED? |
| 00:53:01 |
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WASHINGTON, D.C., AND NEW YORK CITY. |
| 00:53:03 |
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NEW YORK CITY. WHERE'S THE PRINCIPAL HEADQUARTERS? |
| 00:53:05 |
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WASHINGTON, D.C. |
| 00:53:06 |
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DO YOU HAVE ANY RELATIONSHIP WITH THAT FIRM NOW? |
| 00:53:08 |
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YES. |
| 00:53:09 |
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ALL RIGHT. COULD YOU STATE THE RELATIONSHIP WITH THAT FIRM? |
| 00:53:12 |
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I AM THE FOUNDING PARTNER OF THE FIRM. |
| 00:53:14 |
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YOU'RE A FOUNDING PARTNER. |
| 00:53:15 |
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YES. |
| 00:53:18 |
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IS IT TRUE THAT THREE OF THE INSTITUTIONS WHOSE COMPENSATION YOU ARE SUPERVISING ARE OR HAVE BEEN... |
| 00:53:30 |
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NO, THAT IS NOT TRUE. |
| 00:53:31 |
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THAT IS NOT TRUE. |
| 00:53:32 |
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NO. |
| 00:53:33 |
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IT HAS BEEN REPORTED IN THE PRESS THAT THAT IS ACTUALLY THE CASE. |
| 00:53:38 |
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IT MAY BE REPORTED IN THE PRESS. IT'S NOT TRUE. |
| 00:53:40 |
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IT'S NOT TRUE. ARE ANY OF THE INSTITUTIONS UNDER YOUR PURVIEW -- HAVE THEY |
| 00:53:47 |
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NO. |
| 00:53:48 |
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THEY HAVE NOT. ALL RIGHT. LET ME ASK YOU, YOU STATED THAT IT'S A GOOD IDEA TO TIE THE STOCK OPPORTUNITIES... |
| 00:54:12 |
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ONE-THIRD AFTER TWO YEARS, ONE-THIRD AFTER THREE YEARS AND ONE-THIRD AFTER FOUR YEARS. |
| 00:54:15 |
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YOU KNOW, THAT DOESN'T SOUND VERY LONG TERM TO ME. HOW DID YOU ARRIVE AT FOUR |
| 00:54:19 |
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WELL, IT'S A VERY DIFFICULT QUESTION. WE CONCLUDED THAT ASKING INDIVIDUALS TO DELAY THE PAYMENT OF... |
| 00:55:17 |
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I DON'T -- I GUESS I JUST FIND IT SURPRISING, YOU KNOW, IF YOU LOOK AT A TWO-YEAR TIME HORIZON TO... |
| 00:55:29 |
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WELL, IT MAY NOT BE A LONG TIME -- I GUESS IT'S RELATIVE, BUT OUR CONCERN WAS THAT IF WE'RE REDUCING... |
| 00:56:09 |
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ON THE OUTER EDGE BUT ON THE INNER YEARS IT'S TWO YEARS. YOU WERE QUOTED IN "THE NEW YORK TIMES" OCTOBER... |
| 00:56:46 |
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WELL, WE DID IT IN A NUMBER OF WAYS. FIRST WE GATHERED ALL THE DATA WE COULD GATHER AND EXAMINED THE... |
| 00:57:48 |
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THE GENTLEWOMAN'S TIME HAS EXPIRED. |
| 00:57:50 |
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I WOULD LIKE TO PLACE IN THE RECORD INFORMATION WE HAVE ABOUT THE CLIENTS OF THE GENTLEMAN'S LAW FIRM... |
| 00:57:58 |
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THANK YOU. WITHOUT OBJECTION. THE GENTLEMAN FROM INDIANA, MR. SAUTER. |
| 00:58:03 |
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THANK YOU, MR. CHAIRMAN. I'M SURE IT DOESN'T SHOCK MR. FEINBERG THAT SOME OF US ON THE REPUBLICAN... |
| 01:00:01 |
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UNDER THE LAW I'M LOOKING AT THE TOP 25 COMPENSATED INDIVIDUALS AT AIG AS THE PARENT. IN OTHER WORDS,... |
| 01:00:17 |
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IN OTHER WORDS, MY QUESTION IS, THEN, CONGRESS DIDN'T SEPARATE. WE BLENDED THEM ALL TOGETHER. LET... |
| 01:02:28 |
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CONGRESSMAN, I CAN ONLY SAY, IN RESPONSE TO YOUR -- |
| 01:02:31 |
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I ASK YOUR OPINION NOW, JUST NOT WHAT YOU'RE REQUIRED TO BY LAW. |
| 01:02:35 |
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WELL, BUT, I MEAN, I THINK THAT IS A FAIR ANSWER. I'M CONFRONTED WITH A STATUTE AND SOME REGULATIONS,... |
| 01:02:50 |
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I'M ASKING YOU, YOU'RE INSIDE NOW. YOU'RE LOOKING AT THESE. YOU'VE GOT TO BE MEASURING THESE DIFFERENT... |
| 01:03:31 |
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I THINK TO THE EXTENT THAT YOU'RE ASKING DO WE ALSO LOOK AT THE IMPORTANCE, THE ROLE OF THE INDIVIDUAL,... |
| 01:03:42 |
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DID THEY HANDLE THESE TOXIC THINGS AND OVERLOOK? |
| 01:03:48 |
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I ALSO THINK, IF I MAY, CONGRESSMAN, YOU'RE RAISING -- IMPLICITLY YOU'RE RAISING AN WHAT ABOUT CORPORATE... |
| 01:04:07 |
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THE GENTLEMAN FROM TEXAS? |
| 01:04:12 |
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THANK YOU, MR. CHAIR, AND THANK YOU, MR. FEINBERG. I GUESS IF I LOOK AT THIS SCENARIO, YOU HAVE COMPANIES... |
| 01:04:45 |
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CORRECT. |
| 01:04:51 |
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WE TALKED ABOUT CONCENTRATION, AND I THINK WHEN I AG -- AIG SPOKE AND I WAS AND HOW RICH FROM THE... |
| 01:05:14 |
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YES, I REMEMBER THAT. |
| 01:05:16 |
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ALL RIGHT. SO I GUESS ONE OF THE THINGS THAT WE HAVE TO LOOK AT AS LEGISLATORS IS SOMETIMES THE PUBLIC... |
| 01:06:41 |
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I COMPLETELY AGREE WITH YOUR COMMENT ABOUT BEING CAREFUL. I ASSURE YOU THAT THE OFFICE OF THE SPECIAL... |
| 01:07:08 |
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THANK YOU VERY MUCH. |
| 01:07:09 |
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THANK YOU. |
| 01:07:10 |
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AND I YIELD FIVE MINUTES TO THE GENTLEMAN FROM NORTH CAROLINA, MR. McHENRY. |
| 01:07:14 |
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THANK YOU, MR. CHAIRMAN. THANK YOU, MR. CHAIRMAN. THANK YOU, MR. FEINBERG, FOR YOUR TESTIMONY. I... |
| 01:07:44 |
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CORRECT. |
| 01:07:46 |
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HOW LOCHBOFTEN DO YOU MEET WITH SECRETARY GEITHNER? |
| 01:07:48 |
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I'VE MET WITH THE SECRETARY PROBABLY THREE OR FOUR TIMES IN THE LAST FIVE MONTHS. |
| 01:07:51 |
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IN THE LAST HOW MANY MONTHS? |
| 01:07:52 |
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FIVE MONTHS. |
| 01:07:53 |
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FIVE, OKAY. SO EVERY OTHER MONTH, ROUGHLY. OKAY. AND IN TERMS OF THIS DISCUSSION ABOUT CASH, OKAY?... |
| 01:08:33 |
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CORRECT. |
| 01:08:34 |
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NOW, THE "WALL STREET JOURNAL" STORY YOU REFERENCE IN YOUR OPENING STATEMENT SAYS THAT YOU RAISED... |
| 01:08:48 |
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THAT'S WHAT "THE WALL STREET JOURNAL" SAYS. MY DEFINITION OF BASE SALARY'S QUITE DIFFERENT. MY DEFINITION... |
| 01:09:36 |
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AND THAT $13 MILLION FIGURE IS NOT ANY STOCK AWARDS. |
| 01:09:40 |
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CASH. |
| 01:09:42 |
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OKAY. ALL RIGHT. I JUST WANT TO UNDERSTAND THIS DISTINCTION BECAUSE I READ HERE -- I READ IN "THE... |
| 01:10:03 |
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I GUESS THAT'S RIGHT. IT'S UNCLEAR TO ME WHAT THEY MEAN. |
| 01:10:06 |
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SO WHAT YOU'RE LOOKING AT, YOU WOULD UP THAT BASE GUARANTEE IN THAT FACTOR, BUT THE REST YOU'RE HAVING... |
| 01:10:23 |
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I'M ALSO ELIMINATING ALL CASH GUARANTEES LIKE BONUSES GUARANTEED REGARDLESS OF PERFORMANCE, LIKE COMMISSIONS... |
| 01:10:37 |
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I WANT TO DISCUSS A LARGER ISSUE HERE. DO YOU USE COMPENSATION CONSULTANTS WITHIN YOUR OFFICE? |
| 01:10:44 |
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IN THE OFFICE OF THE SPECIAL MASTER? YES. |
| 01:10:47 |
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ARE THESE -- ARE THESE COMPENSATION CONSULTANTS THAT HAVE OTHER CLIENTS? |
| 01:10:52 |
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NO, THEY'RE -- NO. THEY MAY HAVE CLIENTS THAT I'M NOT AWARE OF. THEY'RE BOTH ACADEMICS. |
| 01:10:58 |
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BOTH ACADEMICS, OKAY. ALL RIGHT. NOW, IN TERMS OF COMPENSATION CONSULTANTS, THERE'S BEEN A LOT OF... |
| 01:11:17 |
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WE CERTAINLY HAVE. |
| 01:11:19 |
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CAN YOU DISCUSS -- BECAUSE WE'RE IN CONGRESS HERE. WE SET THE TAX RULES. WHAT CAN WE DO TO MAKE THE... |
| 01:11:33 |
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WELL, THAT'S A COMPLICATED QUESTION ABOUT THE TAX CODE. I'D HAVE TO GET BACK TO YOU ON THAT. I CAN... |
| 01:12:07 |
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I'D CERTAINLY APPRECIATE THAT. |
| 01:12:08 |
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I WILL. |
| 01:12:10 |
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FINALLY, THE NUMBER OF 25, OKAY? I FIND IT ARBITRARY. DO YOU FIND IT ARBITRARY? |
| 01:12:17 |
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YEAH -- OF COURSE, IT'S ARBITRARY. |
| 01:12:19 |
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HAVE YOU ENCOUNTERED THIS AS A PROBLEM WHERE YOU HAVE TWO EXECUTIVES, ONE MAKES MARGINALLY MORE THAN... |
| 01:12:53 |
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NO, WE HAVEN'T SEEN THAT YET. OF COURSE, WE HAVEN'T GOT TO THE NEW T.A.R.P. 25 IN 2010 WHICH MAY VARY.... |
| 01:13:33 |
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YOUR TIME'S EXPIRED. |
| 01:13:35 |
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MR. CHAIRMAN, IF I MAY SUBMIT FOR THE RECORD, A QUESTION I HAVE ABOUT CONTRACTING OUT SERVICES THAT... |
| 01:13:43 |
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WITHOUT OBJECTION. SO ORDERED. I NOW RECOGNIZE THE GENTLEMAN FROM VERMONT, MR. WELCH. |
| 01:13:54 |
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THANK YOU VERY MUCH. MR. FEINBERG, I THANK YOU AND I THANK YOUR STAFF FOR THE TREMENDOUS WORK THAT... |
| 01:16:16 |
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CONGRESSMAN, I DON'T HAVE AN OPINION. I'VE READ THAT, THAT STORY JUST AS OTHERS HAVE. I HAVE ENOUGH... |
| 01:16:38 |
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LET ME ASK YOU THIS. I UNDERSTAND YOU HAVE A LIMITED PURVIEW PURVIEW. I CAN'T TELL YOU THAT NOBODY'S... |
| 01:17:31 |
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YES. I'M HOPEFUL THAT THE MODEL THAT WE HAVE DEVELOPED FOR THE SEVEN COMPANIES THAT'S IN THIS REPORT... |
| 01:18:14 |
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THANK YOU. I YIELD BACK. THANK YOU, MR. FEINBERG OPINION. |
| 01:18:18 |
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THANK YOU VERY MUCH. I NOW YIELD TO THE GENTLEMAN FROM CALIFORNIA, CONGRESSMAN BILBRAY. |
| 01:18:26 |
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THANK YOU, MR. CHAIRMAN. MR. FEINBERG, I GUESS WITH MY WIFE ON THE OTHER SIDE OF THE CONTINENT, I... |
| 01:19:37 |
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I THINK THAT IS RIGHT. AS WE SAID EARLIER, THE FOOTNOTE TO THAT GENERAL VIEW WHICH I SHARE IT IS WITH... |
| 01:20:07 |
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BECAUSE RIGHTS AND RESPONSIBILITIES -- THE FISCAL RESPONSIBILITY LEADS THE RIGHT TO BE ABLE TO INTERVENE.... |
| 01:20:26 |
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I CAN'T SPEAK FOR THE FEDERAL RESERVE OR OTHERS. I KNOW THAT I HAVE PUBLICLY AGAIN TODAY EXPRESSED... |
| 01:20:41 |
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AND I APPRECIATE THAT. HOW MANY MEMBERS OF YOUR TEAM WERE DRAWN FROM THE PRIVATE LAW FIRM FROM YOUR... |
| 01:20:48 |
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I THINK MYSELF AND TWO OTHERS. |
| 01:20:52 |
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WOULD YOU MIND NAMING THEM? |
| 01:20:54 |
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MS. CAMILLE BYROS WHO IS SITTING RIGHT HERE AND MS. JACQUELINE ZINS ALSO SITTING NEXT TO MS. BYROS.... |
| 01:21:04 |
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ALL THE REST ARE TREASURY OFFICIALS. |
| 01:21:06 |
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I BELIEVE SO. |
| 01:21:07 |
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DO YOU HAVE THEIR NAMES? |
| 01:21:08 |
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THEY'RE ALL HERE. I CAN GET YOU THOSE NAMES, YES. |
| 01:21:12 |
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I APPRECIATE THAT. NOW, THERE'S A LOT OF REPORTS THAT HAVE BEEN GOING AROUND. THE LATEST IS THAT ACCORDING... |
| 01:21:29 |
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TWO. PROFESSOR LUCIAN FROM HARVARD AND ANOTHER FROM USC. |
| 01:21:34 |
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I APPRECIATE THAT. AND THAT'S THE KIND OF CLARITY I THINK THAT PRESIDENT OBAMA REALLY WANTED TO SET... |
| 01:22:08 |
|
I'LL BE FWLADGLAD TO DO THAT. I CAN TELL YOU SUMMARILY, THERE'S THE TWO ACADEMICS AT HARVARD AND SOUTHERN... |
| 01:22:22 |
|
THANK YOU VERY MUCH. AND THAT'S HOW WE AVOID ALL OF THE HE SAYS/SHE SAYS OR WE HEAR REPORTS AND WE... |
| 01:22:28 |
|
WOULD THE GENTLEMAN YIELD? |
| 01:22:30 |
|
I YIELD TO THE GENTLEMAN FROM CALIFORNIA. |
| 01:22:32 |
|
BEING AN OLD EMPLOYER, I COULDN'T RESIST ASKING ONE QUESTION. YOU'VE HAD MORE THAN HALF OF THE KEY... |
| 01:23:03 |
|
I DON'T -- I DON'T KNOW THE ANSWER TO THAT, CONGRESSMAN. IT'S A FAIR QUESTION, AND I'LL TRY AND GET... |
| 01:23:07 |
|
IF YOU'D GET BACK TO US ON THAT. ADDITIONALLY, MADAM CHAIR, I'D LIKE TO ENTER BLOOMBERG.COM'S ARTICLE... |
| 01:23:39 |
|
I'M NOT SURE, BUT -- |
| 01:23:41 |
|
BY A MAGNITUDE OF MANY? |
| 01:23:43 |
|
I'M NOT SURE, BUT I WILL ASSUME, BASED ON THE RANKING MINORITY MEMBER'S QUESTION, THAT |
| 01:23:50 |
|
THANK YOU. I YIELD BACK. HERE YOU GO. |
| 01:24:00 |
|
MR. FOSTER IS RECOGNIZED FOR FIVE MINUTES. |
| 01:24:03 |
|
THANK YOU. THANK YOU FOR APPEARING TODAY. I REALLY APPRECIATE IT. THE FIRST QUESTION I HAVE IS SORT... |
| 01:24:23 |
|
PROHIBITED BY OUR RULES AND REGULATIONS. VERY GOOD QUESTION. |
| 01:24:26 |
|
WHO ENFORCES THIS? ESPECIALLY FOR FORMER EMPLOYEES THAT ARE HOLDING THE STOCK THAT'S GOING TO VEST... |
| 01:24:35 |
|
I WOULD GUESS WITH ANY OF OUR FINAL COMPENSATION DETERMINATIONS, IF THERE'S A VIOLATION, I WOULD ASSUME... |
| 01:24:43 |
|
OKAY. BUT DO THEY HAVE TO REPORT? IF YOU LEAVE THE FIRM AND THEN, YOU KNOW, FOR THE NEXT SEVERAL ... |
| 01:24:58 |
|
I THINK WE WOULD MONITOR THAT AND THEN BE REQUIRED TO DO THAT, YES. |
| 01:25:01 |
|
SO THERE ARE FINANCIAL STATEMENTS THAT HAVE TO BE |
| 01:25:03 |
|
I THINK SO. |
| 01:25:05 |
|
YEARS AFTER YOU'RE TERMINATED. OKAY. YOUR STAFF IS AT LEAST NOT SHAKING THEIR HEAD. OKAY. SO NOW... |
| 01:25:14 |
|
I MAY GET CORRECTED IN THE NEXT HOUR, AND IF SO, I'LL LET YOU KNOW. |
| 01:25:17 |
|
DOWN THE HALL IN THE FINANCIAL SERVICES COMMITTEE THAT I ALSO SERVE ON, WE HAVE A BROADER CONCERNS... |
| 01:26:53 |
|
AGAIN, THOSE ARE QUESTIONS -- I WILL GET BACK TO YOU -- THOSE CORPORATE GOVERNANCE QUESTIONS ARE VERY... |
| 01:27:39 |
|
YEAH. WHAT I'M LOOKING FOR IS A RESPONSE OF YOU PERSONALLY NOT AS SPECIAL MASTER. BECAUSE YOU HAVE... |
| 01:27:54 |
|
I WILL HONOR YOUR REQUEST AND GET BACK TO YOU, THEN, AS A LAYMAN. AS A PRIVATE CITIZEN. |
| 01:27:58 |
|
THANKS VERY MUCH. |
| 01:27:59 |
|
THANK YOU. |
| 01:28:00 |
|
I YIELD BACK. |
| 01:28:02 |
|
THANK YOU. MR. JORDAN FROM OHIO. |
| 01:28:05 |
|
I THANK THE CHAIR. AND I APOLOGIZE. I WAS OVER ON THE FLOOR HANDLING A FEW SUSPENSIONS WITH THIS COMMITTEE.... |
| 01:28:51 |
|
WE HAVE BEEN -- IT WAS FOR LUCK THAT IT CAME OUT THE SAME DAY. THE FEDERAL RESERVE SS IN TERMS OF... |
| 01:29:14 |
|
AS A MATTER OF FACT, WE DID NOT. I HAD NO CONTACT WITH THE FEDERAL RESERVE CONCERNING THE TIME OF... |
| 01:29:20 |
|
IS IT COINCIDENCE THAT THEY CAME OUT THE SAME DAY? |
| 01:29:22 |
|
ALL I CAN TELL YOU, CONGRESSMAN, IS THAT THERE WAS NO COORDINATION AND NO COMMUNICATION ON THAT REGARD.... |
| 01:29:33 |
|
DO YOU -- AGAIN, SORT OF PICKING UP WHERE CONGRESSMAN BILBRAY WAS IN THE BIG-PICTURE SENSE, ARE YOU... |
| 01:29:57 |
|
I'M NOT GOING TO SECOND-GUESS CONGRESS. I'VE LEARNED OVER THE YEARS THAT'S A MISTAKE. |
| 01:30:01 |
|
THE AMERICAN PEOPLE SURE DO. |
| 01:30:04 |
|
I CAN ONLY SAY, CONGRESSMAN, AS I'VE SAID IT PUBLICLY, THAT MY ROLE IS RELATIVELY VERY, VERY LIMITED.... |
| 01:30:21 |
|
LET ME ASK YOU THIS, THEN. THE SLIPPERY SLOPE ARGUMENT. ARE YOU NERVOUS -- AND IN LIGHT OF COMMENTS... |
| 01:31:28 |
|
I HAVE TWO ANSWERS TO YOUR CONCERN. ONE, MY JOB AND MY OFFICE AND WHAT I'M DOING WAS ESTABLISHED ... |
| 01:31:48 |
|
MR. FEINBERG, I UNDERSTAND THAT. AND, YOU KNOW, I GET IT. AND I GET THE FACT THAT THESE COMPANIES,... |
| 01:32:20 |
|
I AM TROUBLED, AND I SAY SO IN MY PUBLIC STATEMENT. I AM TROUBLED AT THE NOTION THAT MY ROLE CURRENTLY... |
| 01:32:31 |
|
WELL, IT'S IMPORTANT -- |
| 01:32:33 |
|
THAT'S A MISTAKE. |
| 01:32:34 |
|
IT'S IMPORTANT THAT YOU EMPHASIZE WHAT YOU SAID EARLIER. IT STOPS HERE. I MEAN, THAT'S WHAT SCARES... |
| 01:33:00 |
|
I HAVE AN EXCELLENT RELATIONSHIP NOT ONLY WITH THE SECRETARY OF THE TREASURY I'D LIKE TO THINK BUT... |
| 01:33:43 |
|
THE GENTLEMAN'S TIME HAS EXPIRED. |
| 01:33:50 |
|
THANK YOU, MADAM CHAIR, AND THANK YOU, MR. FEINBERG, FOR TESTIFYING BEFORE US TODAY. I KNOW THAT YOU... |
| 01:35:34 |
|
WELL, THERE IS ONE COMPANY, GMAC, WHICH IS UNDER YOUR JURISDICTION JURISDICTION, AND IT HAS ALREADY... |
| 01:36:01 |
|
WE'RE VERY VIGILANT IN MAKING SURE THAT THE COMPENSATION PRACTICES THAT WE HAVE ARTICULATED IN THIS... |
| 01:36:33 |
|
AND FOR THEM TO CONTROL THEIR COMPENSATION PRACTICES? |
| 01:36:35 |
|
THEY CONTROL THEIR COMPENSATION PRACTICES SUBJECT TO OUR RULES AND REGULATIONS IN WHICH WE HAVE MANDATORY... |
| 01:36:51 |
|
WELL, LET'S TALK ABOUT AIG. I KNOW THAT YOU MADE SOME MAJOR EXCEPTIONS TO PAY CUTS FOR THREE SENIOR... |
| 01:37:31 |
|
WE HAVE AUTHORITY UNDER THE LAW TO ATTEMPT TO WORK WITH THE COMPANY IN RENEGOTIATING THOSE CONTRACTS.... |
| 01:38:18 |
|
WHILE THERE ARE ALARMING FINDINGS THAT EXECUTIVE COMPENSATION IS ACTUALLY INCREASING EVEN THOUGH THERE... |
| 01:38:35 |
|
I THINK GOING FORWARD WE'LL CONTINUE. FIRST TO IMPLEMENT THE RECOMMENDATIONS IN OUR REPORT THAT CALL... |
| 01:39:22 |
|
THANK YOU. I YIELD BACK. |
| 01:39:27 |
|
HIS TIME HAS EXPIRED. MR. CUMMINGS IS RECOGNIZED FOR FIVE MINUTES TO BE FOLLOWED BY MR. CONNELLEY.... |
| 01:39:32 |
|
MR. FEINBERG, I WANTED TO THANK YOU FOR YOUR TESTIMONY. AND I'VE LISTENED TO YOU VERY, VERY CAREFULLY.... |
| 01:39:46 |
|
THANK YOU. |
| 01:39:48 |
|
LET ME JUST TRY TO GET DOWN TO WHERE THE RUBBER MEETS THE ROAD. YOU KNOW, I THINK PART OF THE REASON... |
| 01:43:39 |
|
CONGRESSMAN, YOU'RE ASKING A POLITICAL SCIENCE QUESTION ABOUT THE DIFFERENCE -- THE GAP -- THE GAP... |
| 01:44:05 |
|
AND GIVE ME YOUR BEST ARGUMENT. THAT'S WHAT I WANT TO HEAR. YOU'RE TALKING TO WALL STREET. YOU SAY... |
| 01:44:15 |
|
MY BEST ARGUMENT WOULD BE TO WALL STREET THAT THIS IS WHY YOU SHOULD DO THIS BECAUSE IF YOU DON'T... |
| 01:45:36 |
|
THANK YOU VERY MUCH, SENATOR. |
| 01:45:40 |
|
WE MIGHT NEED ANOTHER COMPANIES. |
| 01:45:41 |
|
CONGRESSMAN CONNELLY. |
| 01:45:42 |
|
THANK YOU, MR. CHAIRMAN AND MR. FEINBERG, THANK YOU FOR YOUR WILLINGNESS TO SERVE. IN LISTING SOME... |
| 01:46:15 |
|
IT'S CLEAR. MY JOB WAS CREATED BY CONGRESS AND THE TREASURY TO ESTABLISH COMPENSATION DETERMINATIONS... |
| 01:46:31 |
|
MR. FEINBERG, I UNDERSTAND THAT, AND THANK YOU. BUT WHY? DID SOMETHING GO WRONG? WHY DID WE DECIDE... |
| 01:46:40 |
|
THESE ARE THE SEVEN COMPANIES THAT WERE -- THAT WERE ALLOWED, I GUESS, TO SURVIVE ON THE BACK OF THE... |
| 01:46:49 |
|
AH, SO THE PRIVATE SECTOR, THE FREE MARKET, IN FACT, HAD FAILED. IS THAT CORRECT? |
| 01:46:53 |
|
CORRECT. |
| 01:46:55 |
|
LET'S TAKE ONE OF THE SEVEN COMPANIES YOU OVERSEE. AIG. THE LARGEST CORPORATE QUARTERLY LOSS IN THE... |
| 01:47:11 |
|
CORRECT. |
| 01:47:13 |
|
AND AIG HAS BEEN THE BIGGEST RECIPIENT OF BAILOUT FUNDS, IS THAT CORRECT? |
| 01:47:16 |
|
I THINK THAT -- YES, THAT'S CORRECT. |
| 01:47:19 |
|
SO IT HAD THE LARGEST LOSS AND THE LARGEST SINGLE TAXPAYER BAILOUT IN AMERICAN HISTORY IS THAT CORRECT?... |
| 01:47:25 |
|
CORRECT. |
| 01:47:26 |
|
DOES THE PUBLIC HAVE ANY INTEREST AT ALL? IN WANTING TO SEE SOME KIND OF RATIONAL COMPENSATION LIMITS... |
| 01:47:40 |
|
INSOFAR AS THE PUBLIC'S VIEW IS REFLECTED IN THE STATUTE THAT I'M WORKING UNDER, YES. |
| 01:47:50 |
|
DOES THAT SEEM A RATIONAL CONCERN? |
| 01:47:51 |
|
NO. |
| 01:47:52 |
|
IT'S NOT RATIONAL? |
| 01:47:54 |
|
IT'S A RATIONAL RESPONSE TO THE CRISIS YES. |
| 01:47:56 |
|
IN THE PUBLIC'S INTEREST? |
| 01:47:57 |
|
YES. |
| 01:48:00 |
|
THANK YOU. LET ME ASK YOU, THE STATUTE THAT CREATED A SPECIAL MASTER WAS TO REVIEW PRIOR PAYMENTS.... |
| 01:49:15 |
|
PERFORMANCE BASED. WHEN YOU LOOK AT COMPENSATION PRIOR AND IN YOUR REPORT YOU ARE SUBMITTING THE DAY... |
| 01:49:50 |
|
I THINK THAT THAT IS RIGHT. |
| 01:49:53 |
|
BUT WOULD YOU NOT AGREE, IF I SAID, THE CEO'S COMPENSATION IN COMPANY X OUGHT TO BE TO 1% OF THE ENTIRE... |
| 01:50:11 |
|
I THINK IT PROBABLY WOULD. |
| 01:50:12 |
|
SO IT'S NOT ENTIRELY ARBITRARY. |
| 01:50:15 |
|
OH, NO. OUR DECISIONS WEREN'T ARBITRARY. OUR DECISIONS ABSOLUTELY WERE BASED, I THINK, WERE BASED... |
| 01:50:51 |
|
AND YOU USE THE WORDS PERFORMANCE-BASED. COULD YOU JUST ELABORATE ON THAT? THAT'S WHERE WE GET INTO... |
| 01:51:07 |
|
THAT IS ABSOLUTELY CORRECT. WE REJECTED OUT OF HAND THE NOTION THAT REGARDLESS OF COMPANY PERFORMANCE... |
| 01:52:54 |
|
I THANK YOU. AND MY TIME SUP, MR. CHAIRMAN. THANK YOU. |
| 01:53:07 |
|
I JUST WANT TO MAKE ONE POINT FROM MY FRIEND AND COLLEAGUE FROM VIRGINIA. THEY TAURKED ABOUT THE PRIVATE... |
| 01:53:35 |
|
YEAH. THANK YOU VERY MUCH. LET ME SAY THIS BEFORE I YIELD TO THE GENTLEMAN FROM NEW YORK, THAT, YOU... |
| 01:54:08 |
|
WELL, WE HEAR THE ARGUMENT ALL THE TIME. YOU EXPRESSED ONE VIEW, AND RANKING MINORITY MEMBERS EXPRESS... |
| 01:54:30 |
|
I THINK ABOUT MOEFBS CONGRESS. WHEN WE LEIGH, SOMEONE TAKES OUR SEAT. THEY DO REAL WELL. I YIELD... |
| 01:54:41 |
|
THANK YOU. FIRST I WOULD LIKE TO WELCOME MR. FEINBERG AND MENTION HIS TRULY OUTSTANDING WORK AS A... |
| 01:55:20 |
|
I'M NOT -- I CAN GET YOU THAT DATA CONGRESSWOMAN. I CAN TELL YOU THERE HAS BEEN A GREAT DEAL OF RECENT... |
| 01:55:49 |
|
I WOULD LIKE TO KNOW. I'VE ALSO READ THE UNITED KINGDOM ADOPTED SAY AND PAY RULES OR SHAREHOLDER VOTE... |
| 01:56:06 |
|
I THINK THAT'S OF RECENT VINTAGE. LY TRY TO SECURE SOME IMPACT OF THAT IN THE UNITED KINGDOM POP ... |
| 01:56:38 |
|
NOT ON MY WATCH. I DON'T KNOW. I'M LIMITED TO THESE SEVEN COMPANIES. AND AGAIN, AT THE RISK OF DISAPPOINTING... |
| 01:57:08 |
|
ARE YOU TRYING TO ISSUE PAY ACCORDING TO PERFORMANCE? |
| 01:57:11 |
|
WHAT CONGRESS IS CONSIDERING, AS IEN S, BOTH THE HOUSE AND THE SENATE, CONCERNING BOTH CORPORATE GOVERNANCE... |
| 01:57:38 |
|
OKAY, THE LAW GIVES FIRMS THE RIGHT TO APPEAL WITHIN 0 DAYS OF THE COMPENSATION DETERMINATION. AND... |
| 01:57:48 |
|
I HAVEN'T RECEIVED ANY APPEALS AS YET. I'M HOPEFUL THERE WON'T BE ANY APPEALS. IF THERE ARE UNDER... |
| 01:58:11 |
|
|
| 01:58:17 |
|
ARE COMPANIES OFFERING GRARNT GUARANTEES TO EMPLOYEES AND DOES THAT VIOLATE TREASURY REGULATIONS? |
| 01:58:22 |
|
IT ALL DEPENDS WHETHER THOSE EMPLOYEES GETTING THOSE GRANTS ALLEGEDLY IN THE NEW YORK TIMES FALL WITHIN... |
| 01:59:02 |
|
DO YOU HAVE THE AUTHORITY TO |
| 01:59:04 |
|
NO. IF THE CONTRACTUAL RIGHTS ARE FOUND BY MY OFFICE TO BE VALID, LEGAL AND BINDING, THEN WE GIVE... |
| 02:00:01 |
|
THANK YOU. MY TIME HAS EXPIRED. WE'VE BEEN CALMED TO I WILL ALWAYS BE IN YOUR BED FOR THAT. |
| 02:00:20 |
|
AND WE THANK YOU FOR YOUR TESTIMONY. WE WANT TO LET YOU KNOW THAT WE APPRECIATE THAT AND THE WORK... |
| 02:00:48 |
|
GIVE ME A CALL NOW WILL BE UP HERE AS SOON AS POSSIBLE. |
| 02:00:51 |
|
AND NOW OUR SECOND PANEL. |
| 02:01:01 |
|
I THINK YOUR AUDIENCE IS GOING TO DISAPPEAR NOW. |
| 02:01:09 |
|
WITH YOUR STAFF LEAVING, YOU LEAVE PLENTY OF OPEN SEATS. |
| 02:01:34 |
|
PLEASE STAND AS I SWEAR YOU WIN. -- AS IS WHERE YOU WIN. LET THE RECORD REFLECT THAT THE WITNESSES... |
| 02:03:04 |
|
YOU MAY WANT TO PULL IT CLOSER. |
| 02:03:08 |
|
DISTINGUISHED MEMBERS OF THE COMMITTEE, AMERICANS ARE ANGRY ABOUT EXECUTIVE COMPENSATION, RIGHTFULLY... |
| 02:08:02 |
|
THANK YOU VERY MUCH. MR. BLACK. |
| 02:08:16 |
|
I JOINED US IN THANKING YOU FOR HAVING US. I AGREE THAT WHAT WE HAVE THIS CHRONIC CAPITALISM. BUT... |
| 02:11:09 |
|
WE HAVE TO RUN AND BOWED. WE WILL BE BACK 10 MINUTES AFTER THE LAST VOTE, OK? WE WILL DO OUR RECESS.... |
| 02:11:53 |
|
WE APOLOGIZE. WE HAVE THE VOTE AROUND HERE IN IF YOU DO NOT, YOUR CONSTITUENTS WILL TALK ABOUT YOU.... |
| 02:12:14 |
|
ALL RIGHT. TO RESUME, THE CRITICAL THING TO UNDERSTAND ABOUT ACCOUNTING FRAUD IN CONNECTION WITH ... |
| 02:15:28 |
|
THANK YOU, BOTH OF YOU, FOR YOUR TESTIMONY. AND AGAIN I APOLOGIZE FOR THE BRAKE AND THE INTERRUPTION... |
| 02:16:00 |
|
THIS EXIST AT BOTH THE CRIMINALITY LITERATURE AND THE ECONOMIC LITERATURE. WE'VE WORKED TOGETHER ON... |
| 02:17:57 |
|
THANK YOU VERY MUCH, PROFESSOR BLACK. PROF. ROBERTS, I UNDERSTAND YOUR AVERSION TO THE BAILOUT, BUT... |
| 02:19:41 |
|
DO YOU THINK THE FOLKS ON WALL STREET WILL GET THE MESSAGE? |
| 02:19:45 |
|
I DO NOT THINK THAT THEY WILL GET THE MESSAGE AT ALL. I THINK THAT WE HAVE SEVEN FIRMS BEING TOLD... |
| 02:20:35 |
|
WHAT ELSE DO YOU THINK WE NEED TO DO? |
| 02:20:39 |
|
POLITICALLY, WITH A LOT OF ANGER ON MAIN STREET, I WOULD GO AFTER FOLKS THAT YOU HAVE DIRECT LEGISLATIVE... |
| 02:22:13 |
|
WE HAVE TO GET OUR MONEY BACK. |
| 02:22:16 |
|
I AM WORRIED ABOUT THAT, TOO. IT IS POLITICALLY IMPORTANT TO GET YOUR MONEY BACK BUT I HATE TO SAY... |
| 02:23:31 |
|
I YIELD TO THE GENTLEMAN FOR CALIFORNIA. |
| 02:23:34 |
|
THANK YOU, MR. CHAIRMAN. I'LL START WITH PROF. ROBERTS. IRONICALLY THE 1992 ACT FELT THAT EXECUTIVES... |
| 02:24:19 |
|
EARLIER I QUOTED THE NOBEL LAUREATE WHO TALKED ABOUT THE PURPOSE OF ECONOMICS, TO TELL PEOPLE THAT... |
| 02:25:22 |
|
THANK YOU FOR DESCRIBING THE THE FED. THAT IS WHAT THEY DID. WE CAN TINKER WITH THE ECONOMY AND THERE... |
| 02:26:36 |
|
NO, IT IS ACTUALLY MORE COMPLICATED. |
| 02:26:38 |
|
I APPRECIATED THE MORE COMPLICATED, BUT NO DESERVES AN EXPLANATION. NO, THEY DID NOT TAKE THIS ON ... |
| 02:26:50 |
|
FANNIE AND FREDDIE TOOK LESS OF IT ON TO THEIR BOOKS THAN DID PRIVATE -- PURELY PRIVATE ENTITIES.... |
| 02:27:04 |
|
NO. |
| 02:27:06 |
|
$1.90 TRILLION. |
| 02:27:07 |
|
OF SUBPRIME? NO. |
| 02:27:10 |
|
WHAT FIGURED TO YOU HAVE? |
| 02:27:14 |
|
RELATIVELY LITTLE THEY HAD LITTLE SUBPRIME 3 THEY HAD MUCH MORE OF ALT-A. |
| 02:27:23 |
|
YOU'RE TALKING ABOUT WIRES LOANS? |
| 02:27:26 |
|
YOU MAY BE UNDER THE IMPRESSION THAT I AM HERE TO DEFEND FANNIE AND FREDDIE. I'M IN A VERY DIFFERENT... |
| 02:27:35 |
|
LET'S GO THROUGH IT. THEY WERE PROVIDING AAA RATING FOR SUBPRIME, AND FANNIE AND FREDDIE WAS TAKING... |
| 02:28:09 |
|
IN GENERAL, NO. THESE THINGS WERE SOLD WITH RECOURSE. |
| 02:28:16 |
|
YOU PRODUCT CREDIT THE FAULT AND THEN YOU ENTER THE FAILURE. |
| 02:28:23 |
|
PERHAPS YOU DID. WE DO NOT KNOW ABOUT THE CREDIT DEFAULT SWAPS MARKET, YOU HAVE TO WONDER STANDARD... |
| 02:28:34 |
|
PROFESSOR ROBERTS, PERHAPS YOU HAVE MORE TRANSPARENCY IN THIS AREA. |
| 02:28:38 |
|
WHAT ABOUT FANNIE AND FREDDIE'S INVOLVEMENT? |
| 02:28:44 |
|
FRANKLIN RAINES WASN'T COMPENSATED INCREDIBLY WELL. |
| 02:28:48 |
|
$90 MILLION OVER A SIX-YEAR PERIOD. -- WAS COMPENSATED INCREDIBLY WELL. |
| 02:28:55 |
|
THAT IS THE FACTS. SUBPRIME IS AN ELUSIVE DEFINITION AS YOU POINT OUT. THE WAY IT SHOULD BE DEFINED... |
| 02:29:50 |
|
CHAIRMAN KUCINICH WAS HOLDING A HEARING DURING THAT TIME THAT THE LOANS WERE STILL BEING PUT DOWN,... |
| 02:30:01 |
|
THANK YOU VERY MUCH. I YIELD FIVE MINUTES TO THE GENTLEMAN FROM MISSOURI. |
| 02:30:07 |
|
I WANT TO THANK THE WITNESSES FOR PARTICIPATING TODAY. TO PROF. BLACK, YOU HAVE STATED THAT GOVERNMENT... |
| 02:30:59 |
|
WE SHOULD BE REGULATING THE FINANCIAL LENDERS OF AMERICA. NOT REGULATING THE LOAN BROKERS, THE MORTGAGE... |
| 02:32:25 |
|
PROFESSOR ROBERTS, ANYTHING TO ADD? |
| 02:32:27 |
|
THERE IS ALWAYS THE HOPE THAT THIS TIME IT WILL BE DIFFERENT. YOU START TO THINK THAT MAYBE THERE... |
| 02:34:10 |
|
YOU LEFT OUT TREASURY AND THE FEDERAL RESERVE. |
| 02:34:14 |
|
IN WHAT PART? |
| 02:34:16 |
|
IN THE REGULATORS. |
| 02:34:19 |
|
THERE ALSO WHEN BALL FROM REGULATION. BUT WE CAN GO FURTHER TO BASIL II. -- BASEL II. BASEL II SAID... |
| 02:36:46 |
|
I GIVE FIVE MINUTES TO THE GENTLEMAN FROM OHIO. |
| 02:36:48 |
|
A YEAR. I HAVE HEARD YOU SAY THAT REGULATION WAS THE PROBLEM. AND I SIMPLIFYING THIS TOO MUCH? |
| 02:37:07 |
|
NOT THE REGULATION, BUT THE ANTICIPATION OF THE BAILOUT. |
| 02:37:13 |
|
IF WE GO BACK TO THE 1980'S, WHEN THE SAVINGS AND LOANS WERE BAILED OUT, THAT WAS A GREEN LIGHT AND... |
| 02:38:43 |
|
I WOULD PUT AWAY THE CHECKBOOK. WE AGREE ON A LOT, BUT CONTRARY TO PROF. BLACK, THE AVAILABILITY ... |
| 02:39:37 |
|
AND THEY SHOULD BE. |
| 02:39:41 |
|
DO YOU KNOW WHAT THE BENEFIT WAS OF FANNIE MAE AND FREDDIE MAC? ONE-QUARTER OF 1%. THIS IS DWARFED... |
| 02:40:43 |
|
DR. BLACK, THANK YOU. |
| 02:40:46 |
|
I AGREE THAT THE BAILOUT IS A DISASTER. 98% OF AMERICANS BELIEVE THAT THIS IS A DISASTER. YOU ALWAYS... |
| 02:44:55 |
|
THANK YOU VERY MUCH. I WOULD LIKE TO TALK ABOUT WHAT YOU JUST SAID. THE PRESIDENT OF THE UNITED STATES... |
| 02:45:28 |
|
CHANGE YOUR SENIOR LEADERS OF YOUR EFFORT, BECAUSE THEY DO NOT BELIEVE IN REGULATION. |
| 02:45:36 |
|
SUMMERS AND GEITHNER. WE HAVE A SERIES OF REGULATIONS -- SHEILA BEIHR IS TRYING TO DO SOMETHING AND... |
| 02:47:18 |
|
I WANT TO STAY WITH WHERE YOU ARE. IF WE HAVE A SITUATION WHERE WHEN I LOOK AT THIS -- WHEN I LOOK... |
| 02:48:40 |
|
I AGREE. I THINK THAT THIS IS TERRIBLE PUBLIC POLICY AND I WILL GIVE YOU AN EXAMPLE. AFTER I WAS SPEAKING... |
| 02:50:09 |
|
THEY ALWAYS TALK ABOUT GOLDMAN SACHS, GIVING ALL THE MONEY IN BONUSES. LET'S SAY THAT THE MONEY DID... |
| 02:50:40 |
|
WE HAVE CHANGED THE ACCOUNTING RULES, WITH THE INDUSTRY -- AND THIS IS SOMETHING WHERE CONGRESS HAS... |
| 02:51:40 |
|
THANK YOU VERY MUCH. |
| 02:51:45 |
|
LET ME ASK A COUPLE OF QUESTIONS. YOU STATED IN YOUR WRITTEN TESTIMONY THAT THEY ARE NOT NEARLY AS... |
| 02:52:14 |
|
THEY NEED TO KNOW THAT THIS IS NOT MERELY AN ISSUE OF POPULISM. THIS IS THE DRIVER, ALONG WITH THE... |
| 02:53:13 |
|
YOU ARE NOW A MEMBER OF CONGRESS. WHEN THEY COME TO US, AND THEY SAY, THAT THIS PARTICULAR COMPANY... |
| 02:53:32 |
|
THIS IS NONSENSE. THE IDEA THAT YOU COULD KEEP THEM ALIVE, IS WORSE THAN NONSENSE. THEY JUSTIFY ALL... |
| 02:54:52 |
|
DO YOU WANT TO ADD SOMETHING TO THAT? |
| 02:54:55 |
|
I HAVE A STORY. I HAVE THE WEEKLY PODCAST AND THE FDIC IMPROVEMENT ACT, HE TALKED ABOUT HOW THIS COULD... |
| 02:57:22 |
|
IN GENERAL THIS IS MANDATORY, PARTICULARLY FOR THE INSOLVENT PLACES. BUT THERE IS A TERRIBLE WITNESS... |
| 02:57:45 |
|
I YIELD FIVE MINUTES TO THE GENTLEMAN FROM CALIFORNIA. |
| 02:57:47 |
|
THANK YOU. THIS IS ANECDOTAL. DO EITHER ONE OF YOU BELIEVE FOR A MOMENT THAT THE EXECUTIVES WHO TOOK... |
| 02:59:02 |
|
I WAS -- |
| 02:59:04 |
|
THIS WAS A COMMENT ON THE QUALITY. |
| 02:59:10 |
|
THEY HAVE THE RESPECT AND THE COMMENTS FOR THE CONSTITUTION. HE SAID, THERE WERE COMMENTS THAT THEY... |
| 03:00:04 |
|
I WAS WANTING TO CONTINUE THE LINE THAT YOU WERE ALREADY ON. THE BAILOUT WAS THE WRONG STATEMENT.... |
| 03:01:41 |
|
THERE ARE VERY NOT-NICE THINGS ABOUT TIM GEITHNER AND BEN BERNANKE, LET ME TALK ABOUT HENRY PAULSON.... |
| 03:02:09 |
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WHAT I TALKED ABOUT EARLIER, WHEN TIM GEITHNER AND HIS OPERATION WITH THE NEW YORK FED TOOK AN OPPORTUNITY... |
| 03:02:34 |
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THEY WERE ACTING AGAINST THE INTERESTS OF THE AMERICAN PEOPLE. WHY WERE WE BAILING OUT AIG ANYWAY?... |
| 03:02:42 |
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AT LEAST THE BRITISH DIVISION. |
| 03:02:45 |
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THEY NEVER HAVE FEDERAL INSURANCE. I HAVE SPOKEN ABOUT WHAT SHOULD HAVE HAPPENED AT AIG. THEY SEPARATE... |
| 03:03:21 |
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PROF. ROBERTS? |
| 03:03:24 |
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I THINK THAT THE MAJOR IDEAS THAT THE IDEA THAT YOU WOULD ONLY PAY 60 CENTS ON THE DOLLAR OR 80 CENTS... |
| 03:04:35 |
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ON THAT NOTE, MR. CHAIRMAN, WE WILL CONTINUE ON A BIPARTISAN BASIS. PERHAPS THIS COULD BE ONE OF THE... |
| 03:05:16 |
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WILL THE GENTLEMAN YIELD? |
| 03:05:23 |
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I UNDERSTAND YOUR CONCERNS AND THE WAY THAT YOU LOOK AT THIS AS WE MOVE FORWARD. BUT WE ARE RUNNING... |
| 03:05:43 |
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WHEN I THINK BACK TO LAST FALL, HENRY PAULSON WAS USING FEAR AS A FACTOR. THIS INTIMIDATED MANY PEOPLE... |
| 03:07:03 |
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THAT IS ALWAYS THE ARGUMENT AND THEY CAN COME BACK WITH THAT. THE QUESTION IS IF THEY WERE RIGHT,... |
| 03:08:33 |
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THEY ARE TALKING ABOUT GOING AFTER THE SMALL-BUSINESS SECTOR AND SECURITIZED IN ANY LOANS THAT ARE... |
| 03:08:46 |
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THIS IS A MISTAKE. BECAUSE OF THE UNCERTAINTY OF WHAT IS COMING DOWN THE ROAD, GIVING PEOPLE THE POWER... |
| 03:09:23 |
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ONE EFFORT THAT YOU MAY PUT IN THE AREA OF THIS THEORY IS IF THEY CAN PUT YOU IN CHARGE, EVEN THOUGH... |
| 03:10:23 |
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THE TRUTH IS, THIS WAS AN ENTIRE MARKETPLACE BASED ON, DON'T ASK, DON'T TELL. NOBODY WAS LOOKING AT... |
| 03:11:23 |
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HER TIME HAS EXPIRED. I WILL YIELD TO THE GENTLEMAN FROM INDIANA. |
| 03:11:29 |
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THAT IS MY PICTURE? DO I LOOK LIKE THIS? I APOLOGIZE FOR BEING LATE GETTING BACK. |
| 03:11:37 |
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THAT IS OR HIGH-SCHOOL PICTURE. -- THAT IS YOUR HIGH SCHOOL PICTURE. I APOLOGIZE FOR NOT GETTING... |
| 03:12:11 |
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I THINK THAT THEY WILL BE PASSING A CONSTITUTIONAL TEST WITH THE SUPREME COURT, AND I DO NOT THINK... |
| 03:12:54 |
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WHAT DO YOU THINK ABOUT THE APPROACH THAT HAS BEEN TAKEN BY REDUCING COMPENSATION. |
| 03:13:07 |
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WHAT YOU THINK ABOUT THE PEOPLE WHO WILL KEEP THIS IN STOCK. WHAT DOES THIS DO FOR THE TOP OF THE... |
| 03:13:28 |
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THE SENIOR OFFICERS HAVE INCREDIBLY SHORT TENURES WITHOUT THIS PROGRAM. YOU GET A HUGE TURNOVER IN... |
| 03:13:45 |
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YOU DO NOT THINK THAT THIS WOULD INCLUDE THE LIKELIHOOD THAT THIS WOULD MOVED -- THIS WOULD INCREASE... |
| 03:13:52 |
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THIS WILL INCREASE THE LIKELIHOOD ABOUT THE MARGINS. |
| 03:14:03 |
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I WOULD DISAGREE WITH YOU. IF I WAS A PERSON WITH THAT KIND OF SALARY COMMITMENT, TO CUT THIS TO $450,000... |
| 03:14:23 |
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SOME OF THEM MAY NOT BE ABLE TO AND YOU HAVE TO STAY WITH WHOEVER YOU HAVE. MOST OF THEM SAW THE HANDWRITING... |
| 03:14:55 |
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WHAT DOES THIS SAY FOR THE PEOPLE WITH THE MONEY TO GET OUT OF THIS PROBLEM, AND THEY GO TO THE SECOND... |
| 03:15:05 |
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THEY ARE LOOKING FORWARD TO THE STOCK BONUS DOWN THE ROAD, IN THREE OR FOUR YEARS. WHAT IS THEIR OPTION... |
| 03:15:18 |
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I THINK THAT THE STOCKHOLDERS SHOULD BE CONCERNED WITH HAVING THE TOP-NOTCH PEOPLE IN THESE POSITIONS.... |
| 03:15:48 |
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EVERYBODY IS WANTING TO HAVE MORE POWER. BUT THE FED, I BELIEVE THAT THEY WOULD GROW AND THEY WOULD... |
| 03:16:56 |
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I HAVE A COUPLE OF QUICK QUESTIONS. DO YOU THINK THAT FREDDIE MAC AND FANNIE MAE SHOULD HAVE THE ... |
| 03:17:10 |
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IT IS SURPRISING THAT THEY DO NOT -- THEY ARE IN THE RED RIGHT NOW AND THEY MAY BE DOWN BY $400 MILLION.... |
| 03:17:27 |
|
THEY HAVE DONE THIS TO THESE EXECUTIVES WHO WERE RESPONSIBLE FOR AT LEAST PART OF THIS. FANNIE MAE... |
| 03:17:51 |
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THIS WAS MUCH LARGER AND THIS WAS MUCH EASIER TO STOP. THIS WAS FAR MORE OBVIOUS. THERE WAS ALMOST... |
| 03:18:28 |
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THE HANDLE THE CRISIS MUCH MORE DIFFERENTLY THAN THIS CRISIS. |
| 03:18:33 |
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THIS WAS AN ATTEMPT TO TELL PEOPLE THAT THERE WAS NO RISK, AND IF YOU PUT YOUR DEPOSIT IN THIS, THE... |
| 03:19:13 |
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THE GENTLEMAN'S TIME HAS EXPIRED. I GO TO THE GENTLEMAN FROM MARYLAND. |
| 03:19:21 |
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I ASKED MR. FEINBERG WHERE WE ARE GOING FROM HERE. HE HAD EXPRESSED A HOPE THAT IF HE CONTROLLED THE... |
| 03:20:35 |
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OUR MOTTO IS THAT YOU DID NOT HAVE TO HOPE TO PERSEVERE. THE CIRCUMSTANCES WERE MUCH DIFFERENT THAN... |
| 03:22:13 |
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ON AN OPTIMISTIC NOTE, WHETHER SOME POPULATIONS -- WHETHER SOME CORPORATIONS INCENTIVIZE THE STOCKS... |
| 03:24:39 |
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WHEN WE SEE PEOPLE THROWN OUT OF THEIR HOUSES BECAUSE OF FORECLOSURES, AND THERE WAS AN ARTICLE ABOUT... |
| 03:25:27 |
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THAT IS WHY CRONY CAPITALISM DESTROYS DEMOCRACY OVER TIME AS WELL. IT WILL CORRUPT THEM. PEOPLE UNDERSTAND,... |
| 03:26:14 |
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THANK YOU VERY MUCH, MR. CHAIRMAN. AND THANK YOU TO THE GENTLEMAN FROM MARYLAND, WHOSE TIME HAS EXPIRED.... |
| 03:28:07 |
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THANK YOU, MR. CHAIRMAN. [CAPTIONING PERFORMED BY NATIONAL CAPTIONING INSTITUTE] [CAPTIONS COPYRIGHT... |
NOTE: The transcript for this program was compiled from uncorrected Closed Captioning.
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