Monday, March 17, 2014

Fed Nominee Stanley Fischer’s Cayman Islands Problem

By Pam Martens

Stanley Fischer did not get a proper vetting at his Senate Banking confirmation hearing last Thursday to serve as Vice Chairman of the Federal Reserve Board of Governors. Of the 22-member Senate Banking Committee, only five Senators, outside of the Chair and Ranking Member, showed up to question Fischer. Questions should have focused on Fischer’s ties to Citigroup, the serially corrupt mega bank which collapsed into the arms of taxpayers in 2008, requiring a bailout of $45 billion in equity infusions, $300 billion in asset guarantees to stop a run on the bank, and over $2 trillion in below market rate loans from the Federal Reserve to prop it up.
Of the five regular Committee members questioning Fischer, all Democrats, only one, Senator Elizabeth Warren, brought up his ties to Citigroup and the bank’s insidious relationship with government and regulators. We’ll get to that in a moment. First, these are the issues on which the public has been denied adequate information and which the Senate Banking Committee has failed miserably to question.
In a December 20, 2001 employment agreement filed with the Securities and Exchange Commission on behalf of Citigroup by Sanford (Sandy) Weill, Chairman and CEO, and Robert Rubin, former U.S. Treasury Secretary turned Citigroup Board Member, a new Vice Chairman, Stanley Fischer, would join the bank on February 1, 2002 with a lavish compensation package for a man who had never worked in commercial banking.
In addition to medical and other executive perks, Fischer’s employment agreement promised:
$41,666 in monthly compensation;
A $500,000 “sign-on incentive compensation award”;
A guaranteed bonus of $2 million for 2002, payable in cash and restricted Citigroup stock;
A stock option grant of 75,000 shares of Citigroup common stock, subject to Board approval;
And, finally, the bank would place $100,000 in the super-secretive Citigroup Employee Fund of Funds I, LP which lists an address in the Cayman Islands. In addition to fronting the investment for Fischer, the “contribution will be enhanced with company-provided two to one leverage.”
By 2004, Fischer was sitting on 188,748 employee stock options according to his SEC filing that year. According to an SEC filing Fischer made on January 20, 2005, he held a total of 84,791 shares of Citigroup stock, worth approximately $4.08 million at that time. Wall Street On Parade was unable to determine just how much Fischer made in profits on the sale of his stock option awards but it is clear he liquidated or exchanged them because they do not show on his 2005 filing.
Fischer’s employment agreement also contained the same type of caveat that was revealed in the Senate confirmation hearing of Jack Lew, a former Citigroup Chief Operating Officer now serving as U.S. Treasury Secretary. If either Lew or Fischer left Citigroup for a high level position in the U.S. government or a regulatory body, the restricted money Citigroup had put away for them would be theirs to keep.

4 comments:

  1. The goobermint maggot ruling class criminals do whatever they want with no limits of any kind. Citizen peasants STFU and do as they are told.

    We need Glass-Steagall immediately.

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  2. When you find yourself saying, "you go girl" to Liz Warren, the uber-statist "Native American" princess, you know that the Rubicon has been crossed, cris-crossed, and wheelied and donut-ed over by the PTB and the TBTF banksters.

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    Replies
    1. Hey, Anon., can you draw a map of that?? I'm cornfused... :)

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  3. There Fed has one purpose and one purpose only: to enrich - at taxpayers' expense - the members and their families, friends and cronies. Look, we can't do anything about it, but can we at least stop pretending that the Fed has any other purpose.

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