Corker Claw Back Targets Wall Street Wallets for Failed Institutions

By Evan Harris

Apr 25, 2010 10:29am

Republican Senator Bob Corker plans to one-up populist measures to reign-in Wall Street with a provision to punish top officials of failed financial institutions that require federal intervention by taking their personal wealth.  Corker told me on “This Week” that he plans to introduce a “claw-back” provision which would take away the personal earnings for the past five years of the corporate officers of failed institutions that fall under the government’s resolution authority.  


Corker said, “if a large entity like this has to go through this resolution where in essence they’re liquidated in an orderly way, I think that everything that the executive team and the board members have earned through this company over the last five years needs to be clawed back.  In other words, there needs to be some penalties assessed to the management that have caused the country to have to go through this orderly liquidation process.”


White House Economic Adviser Austan Goolsbee wouldn’t endorse the idea, but said the president is supportive of measures that would cost officers of failed companies their jobs.  “There is a requirement that they’re all fired.  If you get to that point, all the management is fired,”  Goolsbee said. 
 


WATCH VIDEO HERE:


CORKER:  There is no question, and I
think that first of all, I plan to offer changes to this resolution
authority that say that, if a large entity like this has to go through
this resolution where in essence they’re liquidated in an orderly way, I
think that everything that the executive team and the board members have
earned through this company over the last five years needs to be clawed
back.  In other words, there needs to be some penalties assessed to the
management that have caused the country to have to go through this
orderly liquidation process.  So absolutely, I will be offering an
amendment that deals with that, so that we’re taking back, we’re clawing
back all the earnings that management has made out of this firm, if it
has to go through orderly liquidation.  I think that’s very appropriate,
and certainly I’m going to be doing that on the floor if it doesn’t make
it into the base bill.


    TAPPER:  Austan, can the White House get behind that clawback
provision?  Are you being out-populisted by Republicans?


    GOOLSBEE:  Well, look, in the bill now — the president went to
Cooper Union this last week to revisit the spot where more than two
years ago, he went and said we need to have fundamental reform–


    TAPPER:  But there is no clawback in this bill?


    GOOLSBEE:  There is a requirement that they’re all fired.  If you
get to that point, all the management is fired–


    TAPPER:  So they take their $500 million to their home in the Hamptons.


    GOOLSBEE:  — all the shareholders are wiped out.  Well, look, as I
say, on any details, we’re open to looking at negotiating the details of
how we carry out the president’s principles.  But if negotiation — and
Senator Corker, to his credit, is not in this camp — but if the
negotiators are going to come forward more as a delaying tactic and
we’re just going to put in hundreds of amendments and try to keep this
going so as to stall, delay and kill reform, that’s not going to
happen.  This is going to pass.

You are using an outdated version of Internet Explorer. Please click here to upgrade your browser in order to comment.
blog comments powered by Disqus