Spitzer Spit Out; Mr. Mozilo Goes to Washington; Bear's Cayne: Up in Smoke; Not Dead Yet; Yahoo!'s New Search; Schwarzman Bashes Birthday; Lamenting Lehman; AIG's Hunting Party; GM Jettisons Jet; Christopher Cox Clouseau; Credit Crunch Chaos
By Nat Worden, 01/18/08 Speaking of the slow-motion train wreck on Wall Street, whatever happened to the conductors that steered us into it? Before riding off into the sunset to count their riches, they first made a stop on Capitol Hill, to visit Henry Waxman, chairman of the House Oversight and Government Reform Committee. "According to press reports, you collected tens of millions of dollars in payments and other compensation upon your departure from Citigroup," said Waxman in his written invitation to former Citi ( C) CEO Chuck Prince to testify before his committee. "You should plan to address how it aligns with the interests of Citigroup's shareholders and whether this level of compensation is justified in light of your company's recent performance and its role in the national mortgage crisis." Lest Prince feel guilty about having the stage all to himself, the invitation was also extended to former Merrill Lynch ( MER) CEO Stan O'Neal and the co-founder, chairman and CEO of Countrywide Financial -- Mr. No-Doc himself -- Angelo Mozilo. Prince left his throne at Citi in November 2007 amid a mountain of subprime losses that are still piling up. Investors were getting frustrated with him when the stock was at $50 early that year, having made no significant gains during his tenure, which began in 2003. The stock closed Dec. 24 at $6.78 but Prince left with a parting gift reportedly worth roughly $40 million for a job ... well done? O'Neal was ousted under similar circumstances in October 2007 after holding the reins at Merrill for five years. Through the beginning of 2007, his performance far outpaced that of Prince in terms of shareholder returns, but once the credit took hold, shares of Merrill fell off a cliff wiping out over three years' worth of gains. Ultimately, in order to save the firm, O'Neal's replacement John Thain had to hand over the keys in September 2008 to Bank of America ( BAC) CEO Ken Lewis. . Still, Merrill said at the time of his departure that O'Neal would be charging shareholders about $161.5 million in stock awards and benefits on his departure. But Angelo, the Orange of Countrywide, was the star of Waxman's show. On Jan. 11, 2008, a week before his appearance before Congress, Mozilo agreed to sell CFC to BofA for $4 billion, or $7.16 a share -- an 83% discount to where its shares stood at the same time the previous year. Prior to the sale, CFC and its perpetually-tanned CEO were darlings on Wall Street and Main Street, beating analyst profit estimates and giving often unqualified people the gift of home ownership. In 2007, however, it became clear amid a spike in home foreclosures that Countrywide's loose lending practices were behind its success, and they would ultimately be the cause of its downfall. Mozilo soon became the prime target for critics of the predatory lending practices that rose to prominence in recent years. Mozilo bid farewell to CFC at the end of June after the sale closed, but left far from empty-handed. From 2005 to 2007, Mozilo sold much of his CFC stock realizing $291.5 million in profit. Angelo, did you really believe that you could leave your shareholders in a tailspin and sail off into the sunset in your golden parachute without paying a visit to the people's house? After all, the "country" in Countrywide is a democracy, and 2008 was an election year. Update 12/26: Several lawmakers and Congressmen have since been proven to be on the so-called "Friends of Angelo" list, making them privy to cut rate mortgage loans . They have all since scurried away from their former friend, leaving Mozilo all alone to roll around in his millions and watch the nation's subprime foreclosures mount.