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Obama’s Shameful Bonuses

- January 18, 2012

Almost Three Years After Decrying Lavish Bonuses As “The Height Of Irresponsibility” Obama Remains Silent On His Own Record Of  “Shameful” Bonuses

Obama: “We all need to take responsibility. And this includes executives at major financial firms who turned to the American people, hat in hand, when they were in trouble, even as they paid themselves their customary lavish bonuses. As I said last week, that’s the height of irresponsibility. That’s  shameful.” (President Barack Obama, Remarks On Executive Compensation With Secretary Geithner, Washington, D.C., 2/4/09)

SOLYNDRA: $535 MILLION FROM TAXPAYERS, $500,000 TO “KEY EMPLOYEES”

August 2011: Solyndra Announced That It Would File For Bankruptcy And Immediately Lay Off 1,100 Employees. “Solyndra, a Fremont solar tech manufacturer, announced Wednesday it is suspending operations and immediately laying off 1,100 employees. The company said it will also file for bankruptcy.” (George Avalos, “Fremont Solar Tech Firm Solyndra To Shut Down, Lay Off 1,100 Workers,” The San Jose Mercury News, 8/31/11)

  • Obama’s Poster-Child For “American Ingenuity And Dynamism,” Declared Bankruptcy. “The California-based Solyndra, which employed more than 1,000 people, declared bankruptcy earlier this month. President Obama visited the company in May of 2010, saying it was a prime example of ‘American ingenuity and dynamism.’” (Alexander Mooney, “White House Beats Back Claim It Pressured Loan To Now-Bankrupt Company.” CNN, 9/14/11)
  • Solyndra Was Offered The First Recovery Act Loan Guarantee, Receiving $535 Million From Taxpayers In March 2009. “Solyndra, Inc. announced today that it is the first company to receive an offer for a U.S. Department of Energy (DOE) loan guarantee under Title XVII of the Energy Policy Act of 2005.  Solyndra, a Fremont, California-based manufacturer of innovative cylindrical photovoltaic systems, will use the proceeds of a $535 million loan from the U.S. Treasury’s Federal Financing Bank to expand its solar panel manufacturing capacity in California.” (Solyndra, “Solyndra Offered $535 Million Loan Guarantee By The U.S. Department Of Energy,” Press Release, 3/20/09)

January 2012: Solyndra Is Planning To Hand Out Up To A Half-Million Dollars To Its “Key Employees.” “Now seems an unlikely time for handing out bonuses at bankrupt Solyndra LLC, but that’s the plan of company attorneys intending to dole out up to a half-million dollars to persuade key employees to stay put.” (Jim McElhatton, “Bankrupt Solyndra Seeking To Pay Bonuses,” Washington Times1/12/12)

“Nearly Two Dozen Solyndra Employees Could Receive Bonuses Ranging From $10,000 To $50,000 Each Under A Proposal Filed By Solyndra’s Attorneys In U.S. Bankruptcy Court In Delaware.” (Jim McElhatton, “Bankrupt Solyndra Seeking To Pay Bonuses,” Washington Times1/12/12)

  • Including A $50,000 Bonus To A “Senior Director With A Base Salary Of $206,499 Per Year.” “The biggest bonus, for $50,000, would go to a Solyndra employee whose job title is listed as a senior director with a base salary of $206,499 per year.” (Jim McElhatton, “Bankrupt Solyndra Seeking To Pay Bonuses,” Washington Times1/12/12)
  • “Two Senior Managers Stand To Receive Bonuses Of $30,000 And $32,500.” (Jim McElhatton, “Bankrupt Solyndra Seeking To Pay Bonuses,” Washington Times1/12/12)

Most Former Employees Have Claims Pending In Solyndra’s Bankruptcy Case. “Meanwhile, most other former employees, including several top former officials, have claims pending in the company’s bankruptcy case.” (Jim McElhatton, “Bankrupt Solyndra Seeking To Pay Bonuses,” Washington Times1/12/12)

  • Including Solyndra’s Former Executive Chris Gronet Made A Claim For $456,000 Associated With His Severance Package. “Another claim in the case, for $456,000, appears tied to a severance deal for the company’s founder and former chief executive, Chris Gronet. He left the company weeks before its collapse last summer, avoiding the public interrogations that befell two other top company executives who invoked their Fifth Amendment rights and refused to testify at a televised congressional hearing.” (Jim McElhatton, “Bankrupt Solyndra Seeking To Pay Bonuses,” Washington Times1/12/12)
  • And Stanford Professor James Gribbons, Who Served On Solyndra’s Board Of Directors And Is Seeking More Than $140,000.  “James Gibbons, a Stanford University professor who served on Solyndra’s board of directors, filed a claim for more than $140,000 last month in the bankruptcy, records show. He did not return phone and email messages this week.” (Jim McElhatton, “Bankrupt Solyndra Seeking To Pay Bonuses,” Washington Times1/12/12)

 “Bankruptcy Records Show That Some Solyndra Executives Received Bonuses Of More Than $40,000 In The Months Before The Company’s Collapse.” (Jim McElhatton, “Bankrupt Solyndra Seeking To Pay Bonuses,” Washington Times1/12/12)

Odd Considering How Much Stress The Obama Administration Placed On The Political Optics When It Came To Solyndra

Newly Released Emails “Again Show That High-Level Obama Administration Officials Were Keenly Aware Of The Political Optics Surrounding Solyndra.” “The internal emails the White House released Friday afternoon again show that high-level Obama administration officials were keenly aware of the political optics surrounding Solyndra, the first company to receive a loan guarantee under a stimulus-backed renewable-energy program.” (Andrew Restuccia And Ben Geman, “White House Sends GOP Another Batch Of Solyndra Documents,” The Hill1/13/12)

  • Emails Show That Senior White House Officials Were Given Advanced Notice That Solyndra Planned To Announce Layoffs Just Before The 2010 Midterm Elections. “Senior White House officials were warned that solar-panel-maker Solyndra planned to announce layoffs just before the hotly contested November 2010 midterm elections, newly released e-mails show.” (Carol Leonnig And Joe Stephens, “White House Got Heads Up On Solyndra’s Pending Layoff Announcements,” The Washington Post, 1/13/12)
  • Obama Energy Aide Heather Zichal Warned Officials Including White House Communications Director Dan Pfeiffer And Top Communications Aide Jennifer Psaki Of Solyndra’s Layoffs.  “In one message, Obama energy aide Heather Zichal warned officials including White House Communications Director Dan Pfeiffer and top communications aide Jennifer Psaki of Solyndra’s upcoming announcement.” (Andrew Restuccia And Ben Geman, “White House Sends GOP Another Batch Of Solyndra Documents,” The Hill1/13/12)

“’What’s So Troubling Is That Politics Seems To Be The Dominant Factor,’ Said Ryan Alexander, President Of Taxpayers For Common Sense, A Nonpartisan Watchdog Group.” (Joe Stephens And Carol D. Leonnig, “Solyndra: Politics Infused Obama Energy Programs,” The Washington Post, 12/25/11)

  • Alexander:  What The Obama Administration Was Concerned About Was “How Are We Going To Manage This Politically.” “They’re not talking about what the taxpayers are losing; they’re not talking about the failure of the technology, whether we bet on the wrong horse. What they are talking about is ‘How are we going to manage this politically?’” (Joe Stephens And Carol D. Leonnig, “Solyndra: Politics Infused Obama Energy Programs,” The Washington Post, 12/25/11)

Emails Show That Obama Officials Discussed What Impact A Solyndra Collapse Would Have On The Obama’s Reelection Chances.“They show that as Solyndra tottered, officials discussed the political fallout from its troubles, the ‘optics’ in Washington and the impact that the company’s failure could have on the president’s prospects for a second term.” (Joe Stephens And Carol D. Leonnig, “Solyndra: Politics Infused Obama Energy Programs,” The Washington Post, 12/25/11)

But They “Rarely, If Ever” Discussed The Impact Of Solyndra’s Failure On Its Employees. “Rarely, if ever, was there discussion of the impact that Solyndra’s collapse would have on laid-off workers or on the development of clean-energy technology.” (Joe Stephens And Carol D. Leonnig, “Solyndra: Politics Infused Obama Energy Programs,” The Washington Post, 12/25/11)

  • Former Solyndra Employee: “We All Feel Betrayed” By Obama.  “Then came the August morning when Sterio heard a newscaster announce that more than a thousand Solyndra employees were out of work. Only recently did she learn that, within the Obama administration, the company’s potential collapse had long been discussed. ‘It’s not about the people; it’s politics,’ said Sterio, who remains jobless and at risk of losing her home. ‘We all feel betrayed.’” (Joe Stephens And Carol D. Leonnig, “Solyndra: Politics Infused Obama Energy Programs,” The Washington Post, 12/25/11)
  • Former Solyndra Employee: “I’m Not Getting Money That Is Owed To Me And The Government Hasn’t Done Anything To Look Out For Us.” “Kohlstadt said employees arrived at work to find the company closed, and they lost vacation pay and benefits without notice. Kohlstadt said Solyndra’s collapse leaves him doubly affected. ‘I’m being hit twice: As a taxpayer, $500 million, where did it go?’ he said. ‘I’m hit a second time: I’m not getting money that is owed to me and the government hasn’t done anything to look out for us.’”(Carol D. Leonnig and Joe Stephens, “Solyndra Employees: Company Suffered From Mismanagement, Heavy Spending,” The Washington Post, 9/21/11)

FANNIE AND FREDDIE: $141 BILLION FROM TAX PAYERS $12 MILLION TO TOP EXECS

Fannie And Freddie So Far Have Cost Taxpayers $141 Billion.” “Fannie and Freddie so far have cost taxpayers $141 billion, but that tab will begin to shrink as narrower losses at the firms allow them to pay back more, though the regulator said they were unlikely ever to reimburse the government in full.” (Nick Timiraos, “Fannie, Freddie Bailout Costs Revised Lower,” The Wall Street Journal, 10/28/11)

  •  The Best-Case And Worst-Case Estimates Range From $121 Billion To $193 Billion. “While the $124 billion cost estimate is the most likely scenario, depending on the housing market, the overall economy and the performance of the loans Fannie and Freddie back, the agency gave a best-case and worst-case estimate range of between $121 billion and $193 billion.” (Chris Isidore, “Cost Of Fannie & Freddie Bailouts Trimmed,” CNN Money, 11/7/11)

Taxpayers Have Paid More Than $160 Million To Defend Fannie Mae And Freddie Mac Executives From Fraud Charges Since The Federal Government Took Over The Companies. "Since the government took over Fannie Mae and Freddie Mac, taxpayers have spent more than $160 million defending the mortgage finance companies and their former top executives in civil lawsuits accusing them of fraud." (Gretchen Morgenson, "Mortgage Giants Leave Legal Bills To The Taxpayers," The New York Times1/24/11)

THEN: In 2008, Obama Was Troubled By Fannie And Freddie Handing Out “Multimillion-Dollar Severance Packages” To Top Executives. OBAMA: “I've always said that any action with respect to Fannie Mae and Freddie Mac needs to put taxpayers first and can't under any circumstances bail out shareholders or senior management of that company -- those companies. As a consequence, I'm troubled by the news reports that the outgoing CEOs of Fannie and Freddie may be in line to receive multimillion-dollar severance packages as part of the Treasury plan.” (Senator Barack Obama, Press Conference, Riverside, OH, 9/9/08)

  • Obama Wrote That “Under No Circumstances Should The Executives Of These Institutions Earn A Windfall” As They Are Being Bailed Out With Taxpayer Resources. OBAMA: “Under no circumstances should the executives of these institutions earn a windfall at a time when the U.S. Treasury has taken unprecedented steps to rescue these companies with taxpayer resources.” (Senator Barack Obama, Letter To Treasury Secretary Henry Paulson And FHFA Director Henry Lockhart, 9/9/08)

NOW: “[T]he White House So Far Has Remained Largely Silent About Comparable Bonuses At Fannie Mae And Freddie Mac.” (Josh Boak And Joseph Williams, “Fannie Mae, Freddie Mac Executives Get Big Housing Bonuses,” Politico, 10/31/11)

Fannie And Freddie Executives Are Awarding Over $12 Million In Bonuses To Ten Executives For Meeting “Modest Performance Targets.” “The Federal Housing Finance Agency, the government regulator for Fannie and Freddie, approved $12.79 million in bonus pay after 10 executives from the two government-sponsored corporations last year met modest performance targets tied to modifying mortgages in jeopardy of foreclosure.” (Josh Boak And Joseph Williams, “Fannie Mae, Freddie Mac Executives Get Big Housing Bonuses,” Politico, 10/31/11)

The Bonuses Come After Fannie And Freddie Have Received Nearly $170 Billion In Taxpayer Aid. “The executives got the bonuses about two years after the federally backed mortgage giants received nearly $170 billion in taxpayer bailouts — and despite pledges by FHFA, the office tasked with keeping them solvent, that it would adjust the level of CEO-level pay after critics slammed huge compensation packages paid out to former Fannie Mae CEO Franklin Raines and others.” (Josh Boak and Joseph Williams, “Fannie Mae, Freddie Mac Executives Get Big Housing Bonuses,” Politico, 10/31/11)

  • Freddie Mac CEO Ed Haldeman Received A $2.3 Million Bonus On Top Of His $900,000 Salary. “Securities and Exchange Commission documents show that Ed Haldeman, who announced last week that he is stepping down as Freddie Mac’s CEO, received a base salary of $900,000 last year yet took home an additional $2.3 million in bonus pay.” (Josh Boak And Joseph Williams, “Fannie Mae, Freddie Mac Executives Get Big Housing Bonuses,” Politico, 10/31/11)

Rep. Elijah Cummings (D-MD): “It Is Outrageous …” “‘It is outrageous that senior executives at Fannie and Freddie are receiving multimillion-dollar compensation packages when they now rely on funding from U.S. taxpayers, many of whom face foreclosure or whose homes are underwater,’ Rep. Elijah Cummings of Maryland … wrote in an email.” (Josh Boak And Joseph Williams, “Fannie Mae, Freddie Mac Executives Get Big Housing Bonuses,” Politico, 10/31/11)


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