If You Thought The AIG Bonus Story Was Explosive... Wait 'Til You Hear What Went Down At Merrill Lynch

Will Ken Lewis get a corner cell? With a window?

Matt Renner is breaking the story at Truthout about how the Merrill Lynch Bonus Payments Dwarf AIG's. NY Attorney General Cuomo's office is getting to the bottom of the story but Renner's got a key paragraph that paints a grisly-- pitchfork inspiring-- picture:

In its last days as an independent company, Merrill gave performance-based bonuses exclusively to employees earning $300,000 a year or more and holding a rank of vice president or higher, according to their financial statements. $3.62 billion was handed out to these executives - a sum equal to 36.2 percent of the $10 billion in taxpayer funds that were allocated to Merrill as part of the Troubled Asset Relief Program (TARP) before the bonuses were paid.

So over a third of the $10 billion Bush gave his bankster buddies went directly into the pockets of the incompetent crooks most responsible for the failure of the company! Dennis Kucinich, who chairs the House Domestic Policy Subcommittee is launching an investigation that is likely to result in the firing of Bank of America CEO Ken Lewis, who made the Merrill Lynch deal without letting his shareholders know about the bonuses when they were asked to vote on the merger. (Sign SEIU's petition that calls for the ouster of one of the worst and most dangerous of the crooked banksters in America.)

But that isn't today's only bankster news. TPM has more on Joseph Cassano, the thief who ran AIG's Financial Products division and ran off with a $34 million bonus last month. It looks like the Feds will be able to extradite him from London and arrest him-- but not for theft but, like the way they got Al Capone, on tax charges.

An ABC News investigation found that Cassano set up some dozens of separate companies, some off-shore, to handle the transactions, effectively keeping them off the books of AIG and out of sight of regulators in the U.S. and the United Kingdom.

"This is the other very important issue underneath the AIG scandal," said [tax law expert Jack] Blum. "All of these contracts were moved offshore for the express purpose of getting out from under regulation and tax evasion."

Watch the video of the ABC News report. It's starting to look like what Cassano and AIG have been up to is helping set up tax scams so that corporations and very rich people wouldn't have to pay any, a hallmark of Republican economics and something heartily encouraged by the Bush Regime and their apologists inside and outside of Congress.

And as breathtaking as the sum of taxpayer dollars AIG has managed to put down in its post-crisis nationalized afterlife, the zombie insurer might possibly have indirectly scammed the government out of more money back in its Triple-A days. Today the Wall Street Journal explores AIG's euphemistically-named "tax structuring" business in a story about an IRS battle with Hewlett-Packard over an offshore entity -- or what the IRS terms a "sham that lacked economic substance and a business purpose"-- that AIG set up for the company to collect $132 million in tax credits. AIG's tax business, is "even bigger than the credit-default swaps business that led to the company's meltdown," a person "familiar with the business" tells the Journal. But that might be compartmentalizing things: we are beginning to suspect the credit default swap business and the tax "structuring" business were the same thing-- not just because they served the same end.

An attorney and tax shelter expert we spoke with today says AIG FP was one of the biggest players in the business of engineering offshore tax shelters for corporate and private clients that resembled a multibillion dollar tax evasion scheme called Son of Boss (we don't have time to figure out why) that thousands of corporations and wealthy individuals used to book phony capital gains losses and evade most or all of their income taxes in the late nineties and early 00s. The mind-numbing litany of esoteric loopholes such tax shelters employ to concoct said phony losses is something you don't want to hear about at this hour-- trust us-- but they are generally anchored by a set of exotic unregulated derivative securities whose 'notional value' can help fabricate losses that don't actually exist. Which is where Cassano came in-- only, obviously, the losses existed.