The Big Bucks For Regulators Needs To Stop
Want to get rich in the financial services business? Become a regulator! Judicial Watch sent Freedom of Information Act Requests to key agencies to find out what they pay their people. Get ready to be outraged. From BigGovernment.com:
The CFPB responded on August 4, 2011. The SF-50s revealed CFPB workers being hired at salaries twice the maximum ordinarily allowed under guidelines published each year by the Office of Personnel Management. A dozen new hires take home more than $225,000 a year, and a student intern is currently being paid $42,036 “through completion of education & study” as a communications trainee.
The CFTC responded on September 12, 2011, but blocked out most of the information on the 26 forms provided. The documents, however, reveal that the agency has instituted a cash award bonus system, and during the first six months of 2011, the agency doled out from $400 to $5,000 in bonus income to employees already earning $225,000 or more per year.
The OCC responded on August 22, 2011. The SF-50s indicated that 85 workers earn $225,000 or more per year. The employee names, as well as the legal authority under which the pay raises were issued, were blotted out.
The U.S. Department of the Treasury, responding on August 25, 2011, indicated that two employees earn more than $225,000, but withheld their names.
The SEC responded on October 3, 2011, reporting that 103 workers earn $225,000 or more per year.
Who knew that the OCC was such a windfall for bureaucrats? Once upon a time, the idea behind government service was service. People would go work for the government for a few years in order to do something for society at large, even at the cost of some forgone earnings. Or if you wanted to make government a career, the deal was you’d take a lower salary than the private sector offered, but would get bulletproof job security and lavish benefits. It might not have been a perfect tradeoff, but it had a basic fairness all around. Now we have a situation where a dozen hires at a brand new agency are making over $225,000-and they can’t be fired, and they’re on a gold-plated health and retirement plan. No wonder the Washington suburbs have become the richest in the country. This situation is ridiculous and obviously unsustainable.
I scarcely need to add that these same regulator fat cats failed to anticipate or prevent the financial meltdown, so that the system nearly collapsed at the same time they were drawing those big paychecks. . . This makes absolutely no sense.
What do you think? Let me know!
23 Responses to “The Big Bucks For Regulators Needs To Stop”
How do you still feel about Synovus. SNV???
Interesting article!
What does Occupy Wall Street and Senator Durbin think of these types of salaries?
Yeah, and according to some other mindless conservative think-tank, teachers are overpaid by 52%. Just continues the old maxim: bankers use numbers like drunks use lamp posts–for support rather than illumination.
Since when is $225,000 a year in Washington, DC a king’s ransom? Even Obama considers the salary to be in the 99% category. You can’t run a complex government agency with a clerical mentality.
Don’t be so shocked. When the FDIC was in a staff-up mode two years ago they were paying up to $325,000/year for short-term (2-3 year) contract employees. They picked up highly-experienced, highly-paid, recently-terminated bank employees. Smart move, but in the end very expensive, especially when many of these folks were responsible for liquidating failed bank assets at significant discounts to market value.
Please do NOT let the “Occupy Wall Street ” protestors know about this !!!!
Tom, I agree. But in all fairness please add in all the politicians in 07-08 that allowed the bank and financial executives to pilfer investor $$$ by ordering the regulators to leave them alone. Also what about those bank and financial executives that did the actual pilferage through trading and selling funny money CDO’s and CDS’s? The regulator’s may have been negligent and incompetent but they didn’t do the actual stealing. I’d say fire incompetent regulators but for the thieves long prison terms or perhaps firing squads like the Chinese do with their corporate thieves?
I suspect you can find similar outrageous salaries at virtually any agency of the federal government you might care to examine. The BUREAUCRACY is the fourth branch of government, fully entitled, irrevocably entrenched, answerable to no one other then themselves and the real power inside the beltway. Nothing short of a revolution is going to ever change that!
Much more interesting and significant, how about investigating how many of these people were earning these types of salaries when the financial crisis occurred. There is a lot of talk about how nobody on Wall Street lost their job or went to jail but how many highly paid financial regulators lost their job because of their failure to do their job? Most of these people making the $225K salary were the same people who was calling the shots. I can assure you that anybody who says nobody could have seen this coming is a liar. The front line employees of these FIRREA agencies were raising the issue but it feel on deaf ears because nobody in power of these financial regulatory agencies had the courage to say “enough is enough.” Don’t focus of salaries (they don’t appear out of line given the responsibility with which they are charged) but focus on accountability. Did they earn those salaries by doing their job.
Hi Tom
In Australia, the regulators just boosted their own pay to over $1 million a year (RBA Chied Stevens). Apra over $800,000, etc etc
All the big four Australian banks were bust, insolvent in October 2008. The NAB it now transpires was operating on 24 hour money. CBA and NAB diluted their retail shareholders out of sight as they rushed the instos for more capital (while simultaneously telling the market they need no more capital) – normally directors would have been jailed and struck off for 20 years for that sort of stuff.
But what the Government did was to sing from the roof tops that Australian banks were the best regulated and strongest in the world, while on the other side of their government mouths, handing out a taxpayer Commonwealth Guarantee of bank wholesale funding with a total taxpayer exposure of $850 million (of which $160 billion was drawn) PLUS a trillion dollar guarantee of bank deposits. Sound familiar? The Aussie regulators were caught completely by surprise (and being rewarded by million dollar pay rises), allowing the banks to breach multiple Commonwealth laws.
The NAB defaulted on a bank guarantee liability to my company to the tune of over $400 million out of a $3.8 billion liability – refer http://www.maconochieassociates.com (that of course was not disclosed to the market or in the NAB’s filings.
Kind Regards
John Maconochie
So the very top people in these governmental agencies are being paid salaries of $225k and possibly more. By contrast what is the salary of the people sitting across the table from them? If the pay were so rich, then why do so many leave the SEC and Justice Department to earn multiples of their former salaries in private practice? How much did John Corzine make to blow up a 200-year old firm in 1? Nobody should make more than they are worth – though many do.
Thank goodness for your keen insight. Now we all share your wisdom that people really work for the government for the money. Really! The facts prove it. Two and a quarter K to a handful of people at government agencies that when all combined employ no more people than one average midsize bank and pay their people – in total – a fraction of the record $20 billion bonuses a much smaller number of Wall Street execs paid themselves after the 2008 crash. Golley, those bonuses are nothing compared to the gold plated government benefits that haven’t change in 30 years from the time they were considered only average benefits. Of course you’re right too about government incompetence. Anybody who works for government in the financial sector should be automatically disqualified as not being shrewd enough to go where the reall money is. The banks. It proves the point – government gumshoes are not nearly as smart as the people they regulate because the government doesn’t pay enough to get the smartest guys in the room! You have to be really smart to tank the largest economy in the world and then pay yourself billions.
Seriously Tom?! Whats the minimum you think you can pay to hire senior experts in the financial services space?
Tom, someone of your facial features ought to refrain from calling other people fat. How much were you paid to fail to anticipate the financial problems?
You wouldn’t believe what mid level brokerage management is paid! These ” managers” make several times what you quote, and are essentially powerless in decision making.
You make excelent points Tom. Federal salaries need to held in check as a minimum and even cut back. Our governement risks being called hypocrits for calling out fat cat bankers on one hand then paying regulatiors such huge sums on the the other. Thanks for posting this information. Mr. Riesenberg, your comments regarding Tom are way off base and show a lack of understanding of Tom’s character. I first heard of Tom when in the mid 90′s I read a WSJ article about a top bank analyst who was fired for not being a “team player” when it came to firm’s wanting analysts to write puff pieces on banks so that the investment bankers could get a referral. I don’t know how much Tom makes but I do know he turned down a $500k offer to keep his mouth shut and walk away and that’s more than I can say for most people including you. Its also why I pay attention to what Tom says.
You do realize that those regulators aren’t paid using taxpayer dollars don’t you? Or would that detract from your story?
Tom’s comment is indicative of all that is wrong with Wall Street and the hedge fund world. To complain about regulators making $200K when many Wall Streeters make multiples of that while endangering the world with stupid zero-sum products like CDS. Tom is probably also just mad because his performance has been terrible for so long and his own compensation has declined so dramatically to the point where $200K is looking pretty good. Hey Tom, why don’t you calculate the amount of money you have lost for your investors over the last few years and pay back any incentive comp from earlier years that you should have never earned in the first place?
Erich Riesenberg, you’re an idiot. you have to be able to distinguish between government pay and private sector.
Erich Riesenberg, you’re an idiot. you have to be able to distinguish between government pay and private sector.
While the salaries may appear high to main streeet america they are low if you compare them to what a bank would pay an employee at a similar level in the same location. The government can’t afford to hire cheap people for these positions or we will have a repeat of the past. Banks are getting all the good compliance people and if the goverment would like to have any chance of effective regulation it needs to hire some good people.
A nation of sheep run by wolves.
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