The Bonus Buster: ‘Secret Information Never Works’

By

The following is a dramatic reenactment. While the actual events are real, a certain amount of color has been added to make the story moderately more entertaining.

Scene: Office of the New York State Attorney General.

Attorney General Andrew Cuomo sat at the massive wooden desk in his office on the 25th floor of 120 Broadway, poring over the news articles that had been compiled for him by his assistant, Bryce. It was Sunday, but he hadn't been able to relax. He had a queer, shaky feeling in his stomach. He regarded the half-eaten Fruit Loop Surprise that Sandra Lee had prepared for him for breakfast, but he knew it wasn't the sugar. Nor was it nerves about his opponent in the governor's race, Rick Lazio. It was excitement. The same kind of tingly adrenaline feeling he had last year around bonus season, just before he sprang into action and demanded the bonus information from the banks who had accepted TARP money in order to compile his seminal report, the artfully titled “No Rhyme or Reason: The ‘Heads I Win, Tails You Lose’ Bank Bonus Culture." As his eyes grazed the page-one Times story by Louise Story and Eric Dash, he knew it was almost time to take action again, though he was not sure when. And then he saw it.

Four paragraphs down:

Many executives are bracing for more scrutiny of pay from Washington, as well as from officials like Andrew M. Cuomo, the attorney general of New York, who last year demanded that banks disclose details about their bonus payments.


"BRYCE!" the attorney general yelled, his voice echoing down the long corridor lined with lawyers and publicists. He heard the brisk tap-tapping of shoes on marble and soon Bryce, a slight young man in his early twenties, was standing before him, holding a pen and legal pad. His eyeliner, Cuomo could see, was still visible from the night before.

"It's time, Bryce," Cuomo told his assistant. "Louise Story and Eric Dash have given us the Sign. Bonus furor is at a fever pitch, and we must take maximum advantage by drafting letters to each bank demanding the details of their bonus pool, then calling a press conference and making a huge deal of it, just like we did last time."

Bryce nodded and took out a pen and legal pad.

"Tell the banks I want to know how these bonus pools were established," the attorney general said, pacing. "How their compensation is tied to performance — if it is. And ask them how, exactly, their bonus pools have changed since the crisis, if in fact they have at all."

Bryce nodded. "On what grounds should I tell them I asking for the information, sir?"

Cuomo stopped pacing and looked at him ...

Bryce hesitated. "I mean, all of the banks have paid back their TARP money, except Citigroup, obviously, and therefore they don't have a responsibility to tell taxpayers — "

Cuomo exploded. "Yes, they do have a responsibility!" he shouted. "Do you know why? Because they can't think they just use us and walk away and continue their lives as they did before. We won't let them, Bryce, do you hear me? We're like the Human Papilloma Virus! They had sex with us and now we will be a part of them forever, so they had better damn well get used to it, and expect us to flare up occasionally and require them to get uncomfortable colposcopies."

There was a pause. "Do you want me to write that?" Bryce asked.

The attorney general shook his head. "No. Mention the Martin Act. And tell them this:"

“As we informed your firm last year, when you received TARP funding, your firm took on a new responsibility to taxpayers,” Cuomo said in his Jan. 11 letter to Bank of New York Mellon. “While your firm has now paid the TARP money back, it is not clear that your firm would have been in the same position now had you not received that TARP money.”


"Add that 'Transparency and disclosure of the banks’ practices and plans are essential especially at this time.'"

"That's perfect, sir."

"You think?" He strolled over to the window and looked out at Ground Zero below him. "I think it could use something else. Something that captures not only the boldness but the futility of their endeavor to pay out bonuses when I, Andrew Cuomo, am watching. It's like trying to hide a secret from GOD."

"How about this," Bryce asked:

“Trying to hide and secret information never works.”

Cuomo raised an eyebrow and regarded his young assistant. "Well. It's choppy," he said. "But I like it. Has a ring to it. A populist ring."

"Thanks," Bryce beamed. I saw Erin Brockovitch this weekend."

New York’s Cuomo Seeks Bonus Data From TARP Banks [Bloomberg]
Banks Prepare for Big Bonuses, and Public Wrath [NYT]