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Culture of Deceit: Why Dick Fuld So Needlessly and Recklessly Perjured Himself Before Congress

 

Culture of Deceit: Why Dick Fuld So Needlessly and Recklessly Perjured Himself Before Congress

Truth is not only violated by falsehood; it may be equally outraged by silence.”

Henri-Frederic Amiel

Yet another whistle blower who has been completely ignored by the SEC just stepped forward to finally be acknowledged by the media.

A Bloomberg analyst reported around noon NY time that they had verified Mr. Budde’s story, and that indeed Dick Fuld easily had received cash in excess of $500 million in compensation for the period in question, higher than even Henry Waxman had asserted in his charts during Dick Fuld’s testimony.

Mr. Budde, a former counsel who was frustrated and plain fed up with the culture of personal greed and deceit among the Lehman executives stepped forward again to tell his story after being completely ignored by the SEC and the Lehman Board of Directors.

Now, I have some sympathy for Dick Fuld. I mean, when you are making the big bucks owed to a master of the universe, and you eat widows and orphans for breakfast, what does it really matter if it is $300 million, or $550 million, or even the one billion that some estimate was the true total compensation? What is a few hundred millions when you can afford to wipe your derrière with Cohiba cigars, and gargle with Cristal Brut 1990? (Oh yeah, that’s class, real class. I must finally be somebody, and not just some schmuck from the Bronx. I’ll show them, show them all.)

I know I have trouble keeping track of what I have exactly in my own wallet at times, especially after paying the kids a couple of quid to walk the dog. And $200 million is hardly a significant sum anymore in the rapidly expanding compensation universe change on Wall Street. There is the locus of Bernanke’s inflation, the FIRE sector, where the liquidity has been channeled, for years.

But what interests me most is why did Dick Fuld perjure himself over something to obviously verifiable, and largely irrelevant? Doesn’t he file tax returns? Did he mess up using Turbo Tax like other board members of the NY Fed are said to have done? Or was he just a little bit ashamed of taking huge sums from a company that he ran into the ground in a Ponzi scheme? On the other hand Goldman execs celebrate their bonuses and just love to roll in their own irrational greed. Perhaps it was just a slip, a bad habit, a automatic reflex.

Fuld was widely disliked on the Street, and when those sharks and sociopaths, who would sell their own mothers for an eighth, don’t like you there just have to be some serious personality issues involved.

But Dick is likely to be just another scapegoat, like Martha Stewart, in an escalating program to feed the relative small fry to the mob and the show trials, while the great bulk of the crime continues to be concealed.

And just so you don’t feel too sorry for the Dickster, on November 10, 2008 Fuld sold his Florida mansion to his wife Kathleen for $100; this may protect the house from potential legal actions and judgements against him. They had bought it only 4 years earlier for $13.56 million.

Still, one can only ask the question, and wonder, what a brave new world, that has such people in it, virtually running the regulators, the Congress, and the government for their own irrational benefit and obsessive greed.

Bloomberg
Fuld Understated Pay More Than $200 Million, Lehman’s Budde Says

By James Sterngold

April 29 (Bloomberg) — Before Lloyd Blankfein of Goldman Sachs Group Inc. took his place, Richard S. Fuld Jr.’s angry face was the universal symbol of Wall Street greed.

On Oct. 6, 2008, three weeks after Lehman Brothers Holdings Inc. filed the largest bankruptcy in U.S. history, Lehman’s former chief executive officer found himself before Representative Henry A. Waxman, the California Democrat who chaired the House Committee on Oversight and Government Reform. Waxman has stared down plenty of CEOs over the years, yet this had to be one of the most intense confrontations of his career.

“Mr. Fuld will do fine,” Waxman said. “He can walk away from Lehman a wealthy man who earned over $500 million. But taxpayers are left with a $700 billion bill to rescue Wall Street and an economy in crisis.”

Fuld said he was a victim, not an architect, of the collapse, blaming a “crisis of confidence” in the markets for dooming his firm. Reckless management had nothing to do with it. “Lehman Brothers,” he said, “was a casualty.”

Fuld and Waxman went on to disagree about just how much money Fuld had taken out of Lehman before it went under, Bloomberg Businessweek reported in its May 3 edition. Fuld, now 64, said his total compensation from 2000 through 2007 was less than $310 million, not the $485 million that appeared on Waxman’s chart. He said 85 percent of his pay was in Lehman stock that had become worthless. “I never sold my shares,” Fuld said at one point. At another, he said he had not sold the “vast majority” of them.

“That just seems to me an incredible amount of money,” Waxman responded.

Under Oath

Among those closely observing Fuld was a 49-year-old former Lehman lawyer named Oliver Budde who was watching the hearing at home on C-Span. Budde (pronounced Boo-da) was certain Waxman’s figures weren’t too high. They were too low, and he could prove it. Fuld, he believed, had understated the amount he was paid during those years by more than $200 million, and now he had done it under oath, for the entire world to see.

For nine years, Budde had served as an associate general counsel at Lehman. Preparing the public filings on executive compensation had been one of his major responsibilities, and he had been infuriated by what he saw as the firm’s intentional under-representation of how much top executives like Fuld were paid. Budde says he argued with his bosses for years over the matter, so much so that he eventually quit the firm. After he left, he couldn’t let the matter rest.

Contacting Regulators

He contacted the Securities and Exchange Commission and the Lehman board of directors and says neither showed interest in meeting him. He was so shocked by Fuld’s testimony in front of Congress that he started thinking about writing a book going public with his story, which is told here for the first time.

“I wasn’t surprised, because these guys don’t surprise me anymore,” Budde says. “But it just struck me — they’re doing it again. I wasn’t going to sit back and watch…”

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