American Taxpayers: Beware of the $35,000 Commode Bill

In the recent economically turbulent times, the government has been distributing taxpayer money via the Troubled Access Relief Program (TARP) to protect financial institutes from collapsing. The hope is that this money will be used well and will create jobs and prosperity. But the bonuses and lifestyles of the Wall Street executives makes one wonder if all the hard-earned money is going down the drain!

John Thain, the former head of Merrill Lynch was celebrated for his business acumen as he sold his company in September 2008 to Bank of America when his brokerage firm's stock had plummeted and it was at the verge of a collapse.

He doled out annual bonuses amounting to $3-$4 billion when Merrill Lynch reported over $15 billion in fourth-quarter losses for 2008 while Bank of America was receiving $20 billion of TARP funds from the government to write down the losses from the acquisition.

But aside from these payouts, what has made Thain really famous in the recent times is his fascination with luxury and excesses. He is reported to have spent $1.2 million renovating his office in Merrill in early 2008. The decor includes a fancy $35,000 commode on legs, a Persian rug for $87,000, silk curtains for $28,000 and a $1,400 parchment trash can!

When the losses at Merrill came to light, he left for a three-week family vacation in Vail, Colorado to enjoy skiing. After his return, he went on to be a top executive in Bank of America. When news of his excesses exposed him to media and public glare, he resigned in late January 2009.

Thain perpetrated such indiscriminate spending in the backdrop of Merrill's $27 billion loss for the fiscal year 2008. Now an investigation has been initiated against those involved in the bonus payouts at Merrill. But money lost is the taxpayers' loss.

Sources:

http://www.dallasnews.com/sharedcontent/dws/dn/opinion/editorials/stories/DN-merrill_27edi.State.Edition1.21c4c73.html

http://dealbook.blogs.nytimes.com/2009/01/26/thain-speaks-out-in-defense-of-himself/?hp