In his opening remarks, Waxman lambasted both Fuld and Lehman.
Internal documents obtained by the committee, Waxman said, "portray a company in which there was no accountability for failure."
Waxman cited an e-mail exchange among top Lehman executives. After someone sent an e-mail suggesting that Lehman's top management give up their bonuses, both Fuld and George H. Walker, a member of Lehman's executive committee and a cousin of President Bush, sent e-mails disagreeing with the suggestion.
Walker, according to Waxman, replied by writing, "Sorry team. I'm not sure what's in the water at 605 Third Avenue today. … I'm embarrassed and I apologize."
Waxman said that Fuld "mocked" the suggestion by adding, "Don't worry – they are only people who think about their own pockets."
Waxman also cited a request submitted to Lehman's compensation committee four days before the firm filed for bankruptcy. The request, he said, recommended that the board give three departing executives over $20 million in "special payments."
"In other words, even as Mr. Fuld was pleading with Secretary Paulson for a federal rescue, Lehman continued to squander millions on executive compensation," Waxman said.
Despite warnings that "liquidity can disappear quite fast," Fuld "depleted Lehman's capital reserves by over $10 billion through year-end bonuses, stock buybacks, and dividend payments," Waxman said.
Others at the hearing voiced their own concerns about compensation at Lehman.
Nell Minow, the editor of the research firm, The Corporate Library, highlighted Fuld's compensation, which exceeded $70 million last year.
"I think it is fair to say by any standard of measurement that this pay plan is as uncorrelated to performance as it is possible to be," she said.
Minow also found fault with Lehman's corporate board. The Corporate Library grades the performance of corporate boards and last month, Minow said, the firm downgraded Lehman's board to an "F."
"In this case, the board was too old, had served too long, was too out of touch with massive changes in the industry, had too little of their own net worth at risk, and was too compromised for rigorous independent oversight," she said.
Prior to Fuld's testimony, Minow and several other experts testified before the committee on Lehman's bankruptcy and today's financial turmoil.
Dr. Luigi Zingales, a professor of finance at the University of Chicago, said that Lehman's demise was a result of its aggressive use of leverage, or debt to finance investments, "in the context of a major financial crisis."
It made Lehman especially vulnerable to insolvency, Zingales said.
"Lehman did not find itself in that situation by accident; it was the unlucky draw of a consciously-made gamble," he said.
Robert Wescott, the president of the economic analysis and public policy research firm Keybridge Research LLC, said that the root of the financial crisis, overall lay in "easy credit."
Variable rate mortgages with low initial interest rates "gave many families an inflated sense of their capacity to afford housing," Wescott said. As a result, he said, housing prices began rising as high as 30 percent per year and "a housing frenzy developed."
Near the end of the Congressional hearing, after some two hours of questioning, Fuld stressed his personal feelings about Lehman's bankruptcy.