Friday, March 7, 2008

Congress meets the Tan Man

I watched a little bit of the hearings. My favorite corporate criminal, Angilo "Tan Man" Mozilo was testifying. I didn't see much in the form of fireworks, but it was fun to watch him squirm when asked about selling $150 million in stock just before CountryWide plunged.

Also, I didn't know this: CountryWide started a share buyback program just as Mozilo was selling his shares off. They bought back $2.5 billion.

Here's the kicker; They borrowed $1.5 billion in order to buy back $2.5 billion. Captains of industry, indeed. Just like the captain of the Exxon Valdez.

UPDATE: I found an article in Forbes that provides some of the transcript for the share buyback issue I mentioned above:

In particular, lawmakers wanted to know how Mozilo justified selling $150 million of his Countrywide stock in 2006 and 2007, even while the company had to borrow money to buy back its own shares.

"That doesn't speak well of your faith in the company's stock," Waxman told him. Mozilo responded that that there was "no relationship between the buyback of stock and my sales," explaining that he was planning for retirement and that his net worth was tied up in Countrywide.

I wonder if the allow tanning booths in Club Fed?

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