NEW YORK ( TheStreet) -- When Mary Schapiro was named chairwoman of the Securities and Exchange Commission last year, I was not bubbling over with enthusiasm.

As the head of NASD, the self-regulatory body for the Nasdaq Stock Market, I felt she was excessively embedded in a system that had failed to adequately supervise brokerages, big and small. To me, her unsuitability for the job was epitomized by the way she appeared on the cover of penny-stock-promoting Equities magazine -- as I described in this blog post back in 2007.

I'm not saying she had to spit in the eyes of the penny-stock crowd, but was it absolutely necessary for her to prance on to the cover of what used to be known as OTC Journal?

Well, now we're in annual Wall Street bonus season, and word is slithering out of the big banks that record bonuses are about to be paid out, 4% over last year -- even as profits remain 20% below the levels in 2006. If you're not seeing Mary Schapiro jumping up and down, jawboning the banks to tear the word "obscene" out of its habitual pairing with "compensation," there's a good reason for that. Seems that when she was at NASD, Schapiro was slobbering over the trough as eagerly as any of the people she was supposed to be regulating.

According to a FINRA report that came out a few days ago, helpfully excerpted by Zero Hedge and other blogs -- but generally ignored by the media -- Schapiro was paid a staggering $9 million when Obama made his big mistake, and she left NASD for the SEC .

According to the report, she received $8,985,334.02 as she exited her NASD job, "most of which consisted of the lump sum payment of the retirement benefits that had accrued in her favor during her 13-year tenure with FINRA. Most of the remainder consisted of incentive compensation for 2008 to which she was contractually entitled."

But that's OK, said the report: "... the total compensation paid to or accrued in favor of Ms. Schapiro during the relevant time period was not more than competitive with the comparable groups." What groups are we talking about? "As comparables for the compensation of FINRA's chief executive officer and chief financial officer, compensation consultant Mercer used investment banking and brokerage firms with between $250 million and $5.6 billion of revenue because the pay level of CEOs and CFOs are generally related to firm size," says the report.

People talk a lot about regulators being "captured" by the people they regulate. In this case, I'm not sure who's capturing whom. Are Wall Street bankers going to be "benchmarked" to the pay of the overpaid paper-pushers who regulate them?

Seven years ago, the media was all agog over Richard Grasso, CEO of the New York Stock Exchange, walking away with $190 million. Today, we have a mini-Grasso situation here, except that this person isn't a disgraced bald man, but a far-from-disgraced lady who is head of our securities regulation apparatus, such as it is. This supposed moral force who has spoken out on executive comp when the ink was still wet on her appointment papers, is as much of a "gimme" practitioner as any of the people she regulates.

Some moral force. What can this grotesquely overpaid (while at NASD) woman possibly say about Bank of America ( BAC), which is paying out 3% more in compensation even as its revenues declined? Or Goldman Sachs ( GS), which can boast of similarly disparate numbers? Or Morgan Stanley ( MS), which the Wall Street Journal reports will be paying out 49% of its revenues to employee compensation and benefits? Or JPMorgan Chase ( JPM), paying out 28% of its revenues in compensation, 7.7% higher than 2009? Citigroup ( C), to its credit, is sanely cutting compensation even as revenues gain a bit.

The reason these rich pay levels are obscene is that America is continuing to suffer from the recession that the big banks caused. To me, this is akin to escaped convicts living out their lives in luxury on the south of France. Most of the big banks have paid back their TARP money, thereby freeing themselves of compensation limits, so putting the bankers in their place is not a job for Kenneth Feinberg's successor as pay czar, Patricia Geoghegan. This is a job for Tim Geithner, Barack Obama and his point person -- Mary Schapiro, heaven help us. The Street needs to stop spitting in the faces of the public while paying such immense sums to their people while the public is strapped. I can just see bankers laughing in the face of the "$9 million regulator."

Schapiro has already opted out, making it clear in her June 2009 speech, linked earlier, that she's only concerned with disclosure issues, not telling banks how much they should pay. So we're back to square one. It's 2007 all over again, compensation-wise, except that the banking industry and Wall Street were only able to survive because they were bailed out by taxpayers struggling to make ends meet.

I know, life isn't fair. But there's something mighty grotesque about this picture. And here's the upshot: The popular angst about Wall Street is part of what's fueling the Tea Party movement. Wouldn't it be just ducky if the latest bonus tidings push voters to cast protest votes for Tea Party candidates and Republicans -- who are even less likely to care about Wall Street compensation than Obama and the Democrats?

A few years ago, Thomas Frank wrote a great book called "What's the Matter With Kansas." We know what's the matter with Wall Street. I'd like to know what's the matter with the Obama administration. (As if I didn't know.)

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Gary Weiss has covered Wall Street wrongdoing for almost a quarter century. His coverage of stock fraud at BusinessWeek won many awards, and included a cover story, �The Mob on Wall Street,� which exposed mob infiltration of brokerages. He uncovered the Salomon Brothers bond-trading scandal, and wrote extensively on the dangers posed by hedge funds, Internet fraud and out-of-control leverage. He was a contributing editor at Conde Nast Porfolio, writing about the people most intimately involved in the financial crisis, from Timothy Geithner to Bernard Madoff. His book "Born to Steal" (Warner Books: 2003), described the Mafia's takeover of brokerage houses in the 1990s. "Wall Street Versus America" (Portfolio: 2006) was an account of investor rip-offs. He blogs at garyweiss.blogspot.com.