CM Letter
Content
CAROLYN McCARTHY
4TH DISTRICT, NEW YORK WASHINGTON OFFlCB: 2346 RAYBURN HOUSE OFFICE BUILDING WASHINGTON, DC 20515 (202) 225-5516 FAX: (202) 225-5758
COMMJTTBBS:
EDUCATION AND LABOR
SUBCOMMITrEES: CHAIRWOMAN, HBALTHY HEALTH, FAMILIES AND COMMUNITIES LABOR, AND PENSIO~
EMPLOYMENT,
FINANCIAL
SERVICES
CONGRESS OF THE UNITED STATES
HOUSE OF REPRESENTATIVES WASHINGTON, DC 20515-3204 April 6, 2009
SUBCOMMITTF.ES; CAPITAL MARKETS, INSURANCE AND GOVERNMENT SPONSORED ENTERPRISES FINANCIAL INSTITUTIONS CONSUMER CREDIT AND
DISTRICTOFFlCB: 300 GARDEN CITY PLAZA, SUITE 200 GARDEN CITY, NY 11530 (516) 739-3008 FAX: (516) 739-2973
E-MAIL:
http://www.house.gov/writerep/ WEBSITB: http://carolynmccarthy.house.gov
Mr. Robert J. Demichael 349 Pepperidge Rd. Hewlett, NY 11557-2736 Dear Robert:
Thank you for contacting me regarding corporate bonuses. I appreciate hearing from you on this important issue. I, along with a majority of my colleagues in Congress, was extremely disappointed to hear of executives receiving excessive bonuses from federally assisted financial institutions. As you are well aware, our nation's economic circumstances have put a great deal of pressure on average Americans. The federal government has taken unprecedented action in an effort to spur economic growth and, in doing so, expects federally assisted institutions to act fiscally responsible. Last Congress, I was pleased to stand with a majority of my colleagues in passing H.R. 1424, the Emergency Economic Stabilization Act, better known as the Troubled Assets Relief Program, or TARP. The TARP was not a perfect piece of legislation, but it was necessary under the circumstances in order to prevent further economic distress in our nation. It is my strong conviction that federally assisted companies manage their budgets responsibly with the American taxpayer in mind. Retention of and excessive payouts to employees of sputtering federally assisted financial institutions not only is irresponsible, but also does little to help restore integrity to company balance sheets. American International Group (AIG), a company that has received federal funding, and will likely need additional assistance, has recently come under fire for offering $165 million in retention bonuses. While not explicitly forbidden under TARP, the President, and Congress have expressed dismay over AIG and other companies' haphazard spending habits. Immediately following these reports, I stood with colleagues on both sides of the aisle in passing H.R. 1586 by a vote of 328-93. H.R. 1586, a bill to impose an additional tax on bonuses received from certain TARP recipients, is currently awaiting consideration by the Senate. In light of concerns regarding the details of the tax in the aforementioned bill, another piece of legislation, H.R. 1664, the Grayson-Himes Pay for Performance Act of 2009, was brought before the House to more accurately define terms of the TARP. H.R. 1664 would amend executive compensation provisions in TARP to prohibit unreasonable and excessive compensation not based on performance standards. Moreover, this legislation would ensure that irresponsible payouts, not performance incentives, are curbed for those federally assisted institutions. This bill, which was openly debated among my colleagues and I in the Financial Services Committee and on the House floor, passed the House with my vote, 247 to 171, with 12 members voting present, and is awaiting consideration by the Senate. Please know that I will work for the final passage and implementation of this legislation.
Our current financial crisis will not be solved overnight, but it is imperative that troubled financial institutions work along side the federal government in a transparent manner so as to ensure the proper utilization of federal funding. The American taxpayer cannot continue to be asked to pay for the irresponsibility of corporate executives. As this Congress continues to deliberate about appropriate measures to stabilize our economy, please know that I will continue to support legislation that promotes a culture of responsibility and accountability in our nation's financial sector and weighs the past and future actions of financial institutions before approving additional
federalfunding.
.
Again, thank you for contacting me. Please feel free to do so in the future.regarding any matter of concern to you.
Carolyn McCarthy Member of Congress CMC/ear
4TH DISTRICT, NEW YORK WASHINGTON OFFlCB: 2346 RAYBURN HOUSE OFFICE BUILDING WASHINGTON, DC 20515 (202) 225-5516 FAX: (202) 225-5758
COMMJTTBBS:
EDUCATION AND LABOR
SUBCOMMITrEES: CHAIRWOMAN, HBALTHY HEALTH, FAMILIES AND COMMUNITIES LABOR, AND PENSIO~
EMPLOYMENT,
FINANCIAL
SERVICES
CONGRESS OF THE UNITED STATES
HOUSE OF REPRESENTATIVES WASHINGTON, DC 20515-3204 April 6, 2009
SUBCOMMITTF.ES; CAPITAL MARKETS, INSURANCE AND GOVERNMENT SPONSORED ENTERPRISES FINANCIAL INSTITUTIONS CONSUMER CREDIT AND
DISTRICTOFFlCB: 300 GARDEN CITY PLAZA, SUITE 200 GARDEN CITY, NY 11530 (516) 739-3008 FAX: (516) 739-2973
E-MAIL:
http://www.house.gov/writerep/ WEBSITB: http://carolynmccarthy.house.gov
Mr. Robert J. Demichael 349 Pepperidge Rd. Hewlett, NY 11557-2736 Dear Robert:
Thank you for contacting me regarding corporate bonuses. I appreciate hearing from you on this important issue. I, along with a majority of my colleagues in Congress, was extremely disappointed to hear of executives receiving excessive bonuses from federally assisted financial institutions. As you are well aware, our nation's economic circumstances have put a great deal of pressure on average Americans. The federal government has taken unprecedented action in an effort to spur economic growth and, in doing so, expects federally assisted institutions to act fiscally responsible. Last Congress, I was pleased to stand with a majority of my colleagues in passing H.R. 1424, the Emergency Economic Stabilization Act, better known as the Troubled Assets Relief Program, or TARP. The TARP was not a perfect piece of legislation, but it was necessary under the circumstances in order to prevent further economic distress in our nation. It is my strong conviction that federally assisted companies manage their budgets responsibly with the American taxpayer in mind. Retention of and excessive payouts to employees of sputtering federally assisted financial institutions not only is irresponsible, but also does little to help restore integrity to company balance sheets. American International Group (AIG), a company that has received federal funding, and will likely need additional assistance, has recently come under fire for offering $165 million in retention bonuses. While not explicitly forbidden under TARP, the President, and Congress have expressed dismay over AIG and other companies' haphazard spending habits. Immediately following these reports, I stood with colleagues on both sides of the aisle in passing H.R. 1586 by a vote of 328-93. H.R. 1586, a bill to impose an additional tax on bonuses received from certain TARP recipients, is currently awaiting consideration by the Senate. In light of concerns regarding the details of the tax in the aforementioned bill, another piece of legislation, H.R. 1664, the Grayson-Himes Pay for Performance Act of 2009, was brought before the House to more accurately define terms of the TARP. H.R. 1664 would amend executive compensation provisions in TARP to prohibit unreasonable and excessive compensation not based on performance standards. Moreover, this legislation would ensure that irresponsible payouts, not performance incentives, are curbed for those federally assisted institutions. This bill, which was openly debated among my colleagues and I in the Financial Services Committee and on the House floor, passed the House with my vote, 247 to 171, with 12 members voting present, and is awaiting consideration by the Senate. Please know that I will work for the final passage and implementation of this legislation.
Our current financial crisis will not be solved overnight, but it is imperative that troubled financial institutions work along side the federal government in a transparent manner so as to ensure the proper utilization of federal funding. The American taxpayer cannot continue to be asked to pay for the irresponsibility of corporate executives. As this Congress continues to deliberate about appropriate measures to stabilize our economy, please know that I will continue to support legislation that promotes a culture of responsibility and accountability in our nation's financial sector and weighs the past and future actions of financial institutions before approving additional
federalfunding.
.
Again, thank you for contacting me. Please feel free to do so in the future.regarding any matter of concern to you.
Carolyn McCarthy Member of Congress CMC/ear
