This past week, a Tennessee journalist, George Poague of the Clarksville Leaf-Chronicle, surveyed the Tennessee power structure in light of the nation’s current economic crisis and, by way of noting the bad aroma now attaching to the financial sector, had this to say: “We’ve read about the Merrill Lynch CEO (since fired) who spent more than a million bucks redecorating his office. That included a trash can costing $1,400. Just before Christmas, he gave billions in bonuses to Merrill executives – their reward for destroying the company.”
From there Poague, pointing out the U.S. automakers had a harder time coaxing bailout money from Congress than had Wall Street, went on to excoriate U.S. Senator Bob Corker for taking positions which he deemed detrimental to the domestic auto industry and concluded: “When Corker showed up at the Detroit auto show last month, auto workers said the senator should receive a pay cut, or should have his job outsourced. See how you like it, Bob! That made me laugh. At the very least, Corker should be given a buyout and replaced. Is Harold Ford Jr. still available?”
Connecting the dots reveals an irony not touched upon by Poague: Included in the lucky Merrill executives getting those pre-Christmas bonuses was almost certainly Ford, a ranking Merrill Lynch executive since February 2007 and one so highly regarded that Bank of America, which absorbed the fallen brokerage, kept the former Memphis congressman on as a rainmaker.
Indeed, Ford reportedly was the featured speaker only last week at a hedge fund group on behalf of the Merrill Lynch division. And a googling of his activities on behalf of the brokerage since his initial appointment in February 2007 (some three months after losing a U.S. Senate bid) as a Merrill Lynch “vice chairman and senior policy advisor,” shows a vast and varied itinerary — ranging from a visit to China as the face of Merrill Lynch to featured spots on financial panels organized by the likes of the prestigious Brookings Institution.
And Ford continues to be a hot property on the political market as well. His name is continually put forth on lists of potential Tennessee Democratic gubernatorial candidates in 2010, and any number of traditional party brokers are angling to get him to make that race.
As of now, the recently married Ford has not closed the door on running for governor, though those who know him wonder if he would be wiling to undertake an administrative job confining himself to the Volunteer State and to forgo his current vistas, which — besides the Merrill Lynch position, estimated by the New York Post to pay him $3 million annually — include heading up the Democratic Leadership Council, appearing as an analyst on national political affairs at MSNBC, and maintaining a relationship to Vanderbilt University as a featured adjunct professor.
And, if he did choose to make a gubernatorial race, how would his Merrill Lynch status play?
Something of a storm broke last weekend when the New York Times reported on the list of Merrill Lynch bonuses and the apparent determination of an irate Andrew Cuomo, the attorney general for the state of New York, to do something about what he saw as a wretched excess.
Noting that, just in advance of its absorption by Bank of America last year, the failing brokerage gave out some $3.6 billion in bonuses to its executives, Cuomo, who is conducting an investigation into executive compensation for possible legal action, said this in a letter to U.S. Rep. Barney Frank, chairman of the House Committee on Financial Services:
Merrill Lynch’s decision to secretly and prematurely award approximately $3.6 billion in bonuses, and Bank of America’s apparent complicity in it, raise serious and disturbing questions. By December 8, 2008, Merrill and presumably Bank of America must have been aware that the fourth quarter and yearly earnings results were disastrous. Indeed, on January 16,2009, the companies announced that in the fourth quarter alone Merrill Lynch has lost $15.31 billion, and more than $27 billion for the year.
In the face of these losses, federal taxpayers were forced to help Bank of America acquire Merrill. Thus, Bank of America also announced on January 16, 2009, that the federal government would invest $20 billion in the deal and provide $188 billion in protection against further losses primarily from the Merrill Lynch portfolio. These investments were in addition to the previous $25 billion in TARP funding that taxpayers had given to Bank of America.
Cuomo provided figures showing that some 700 Merrill Lynch executives had received at least $1 million in year-end bonuses which, as he noted to Frank, seemed rushed ahead of the company’s usual first-of-year schedule so as to benefit from the then pending financial bailout money.
But those $1 million bonuses were for the low end of the 700 recipients. Ranking Merrill Lynch executives got more, much more.
Let Cuomo tell it:
The top four bonus recipients received a combined $121 million;
The next four bonus recipients received a combined $62 million;
The next six bonus recipients received a combined $66 million;
Fourteen individuals received bonuses of $10 million or more and combined they received more than $250 million;
20 individuals received bonuses of $8 million or more;
53 individuals received bonuses of $5 million or more;
149 individuals received bonuses of $3 million or more;Overall, the top 149 bonus recipients received a combined $858 million;
696 individuals received bonuses of $1 million or more.
Several Tennesseans familiar with Harold Ford’s activities at Merrill Lynch professed no doubt that Ford was among the beneficiaries of the bonus payout and little doubt, for that matter, that he was among those receiving relatively substantial sums.
At some point, Cuomo’s list will be made public. Presumably, Ford’s name, with a dollar figure attached to it, will be on it. From a political point of view, one question would be: What might the effect of this disclosure be on an electorate that is patently growing more and more out of sorts with what it sees as an out-of-control wildly self-aggrandizing financial industry?
The issue is a much larger one than the political future of Harold Ford Jr., still a potential superstar in the political arena, but the charismatic former congressman from Memphis undoubtedly has much at stake in the potential fallout.
See follow-up article, “Ford Still (Or Again) a Candidate to Head Commerce Department.“
