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Jonathan Weil: Banks trade TARP for bonuses, debauchery, jets

It's party time again on Wall Street

Jonathan Weil 

Lock up the booze, and hide your wallet. America’s most powerful, too-big-to-fail banks are turning in their TARP money. And you know what that means: It’s party time again on Wall Street.

Ten US banks gained permission this week to buy back $68 billion of shares they issued to the government under the Troubled Asset Relief Programme (TARP). And thank goodness for that. For eight months, they endured the twin nuisances of mass hysteria and populist scorn for blowing taxpayer money on employee bonuses and junkets. Now they can tell the rest of the country to kiss off. There’s nothing Barney Frank can do about it.

Finally, the richest bankers and traders at Goldman Sachs, Chase can stop asking what their country can do for them, and start dreaming again about what they can do for themselves with their banks’ money. Biking to work is out. Helicopter commutes to the Hamptons will be back in. The opportunities are limitless. They’re free at last.

What these masters of the government rescue need now is a shopping list — a 10-step programme to restore their remorseless, reptilian souls and help them rediscover the unique thrill that can come only from being paid millions of dollars to provide services that are of no value to greater mankind. This brings us to our first agenda item:

No. 1: Reinstate the bonuses. Start with the top guys. That means you, Lloyd Blankfein, John Mack and Jamie Dimon. America is back. All we need is a little confidence. And there can be no confidence without the hope, however faint, that one day the son of some unemployed auto worker can grow up to make millions advising his dad’s old company on its next Chapter 11 filing. Just keep repeating this line: We need to retain our best talent, or else we’ll wind up the next AIG.

Because You Can
No. 2: Raise the bonuses. Because you can. Don’t worry that Timothy Geithner at Treasury might unveil some new, vague “best practices” for banker compensation. They’ll never stick. Your lobbyists can fix that.

No. 3: Relax your rules on corporate expense accounts. Scores, which I’m told is Manhattan’s finest adult-entertainment hot spot, has re-opened after a two-year hiatus. A happy customer is a loyal customer. Tell your bank’s traders to say Howard Stern sent them.

No. 4: Redecorate your office. Act quickly before former Merrill boss John Thain lands another job and hires all the good talent. Maybe you can find a $35,000 commode on legs that actually flushes.

Air Power
No. 5: Buy that fleet of private jets you’ve been coveting ever since Citigroup cancelled its $50 million Dassault Falcon 7X in January. Earmark at least half of them for executives’ and directors’ personal use. The Dow is up more than 2,000 points since March. Complacency is back, and it might not be for long. The Gulfstream G550, at $59.9 million, has great leg room.

No. 6: More junkets, more retreats. Now that you don’t have to run your travel plans through a PR firm anymore, it’s safe to hit Vegas again. The Wynn Tower Suites costs just $1,000 a night for a one-bedroom fairway villa. Don’t forget the Tiffany swag bags and Mercedes shuttle rides for valued guests.

No. 7: Hire Kenneth Feinberg’s law firm. The White House has tapped this Washington attorney to be “special master” overseeing the pay practices at TARP babies. Turns out the client list at Feinberg Rozen LLP includes several of them, such as Citigroup, Merrill Lynch and AIG, according to the firm’s Web site. You can’t have too many friends in high places should you ever need another dip at the taxpayer trough.

Some Bankers
No. 8: Book the Rolling Stones for your next company party. Northern Trust got creamed in the press for hiring Sheryl Crow, Chicago, and Earth Wind & Fire to entertain clients at a golf tournament it sponsored in February. Might as well go all out and prove you’re no longer under Geithner’s thumb.

No. 9: Hire former Merrill boss Stan O’Neal to run your board’s compensation committee. If you want your own $161.5 million severance package approved, it helps to have a man in charge who understands why you need one.

No. 10: Help out Geithner, and buy his house. The poor fellow could use a bailout of his own. You never know when he might have a chance to return the favour. This 3,600-square-foot, Tudor-style home in Westchester County, New York, has an eat-in kitchen with black granite countertops. And he’s renting it out for $7,500 a month, after failing to find a buyer at $1.6 million. It would make a fine perk for one of your up-and-comers.

One last bit of advice: Whatever you do, don’t buy the naming rights for a major league sports stadium or the jersey of a British soccer club. Even on Wall Street, some sins are unforgivable.

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