Obama: Wall Street 'Arrogance and Greed' Won't Be Tolerated

Says administration will crack down on banks' executive bonuses.

ByABC News
January 31, 2009, 8:19 PM

WASHINGTON, Jan. 31, 2009— -- President Obama, usually cool, was visibly angry in his weekly address, chastising corporate bankers for the second time this week for accepting taxpayer bailout money and then doling out $18 billion in bonuses.

"The American people will not excuse or tolerate such arrogance and greed," Obama said in the video and radio message released today. "Even as they petitioned for taxpayer assistance, Wall Street firms shamefully paid out nearly $20 billion in bonuses for 2008."

Administration officials challenged a report in The Washington Post that suggested Obama was unlikely to tighten restrictions on compensation for banks that accept bailout funds, saying the report was "simply untrue."

White House and Treasury officials said the president will soon crack down on those big bonuses, shareholder enrichment and overall accountability.

Banking executives have long argued that they need to pay bonuses to retain quality executives.

This week, ABC News asked all 26 banks that have received $1 billion or more in bailout funds if they gave executive bonuses for 2008. Of the 21 that responded, 19 indicated they've either paid bonuses, or might still.

Yet government strings come at a cost. Several healthy banks have recently declined money from the bailout fund aimed at persuading them to loosen credit and foster lending to boost the economy.

Rick Adams, executive vice president of United Bankshares Inc. of Charleston, W.Va., told ABC News the bank has declined $197 million in government funds in order to keep the government out of the boardroom, citing the government's ability to change the rules unilaterally and limit dividends, which have increased at the bank for 35 consecutive years.

"That was one of the factors," Adams said. "We're in a position to weather the tough times ... but the terms of the conditions was also a factor."