New York Attorney General Andrew Cuomo is making a strong case to become the new Eliot Spitzer. No, he’s not dialing 10-digit numbers culled from the back of the Village Voice, but he is telling nine top banks —including Citi, Goldman, Morgan Stanley, J.P. Morgan and Merrill Lynch— to turn over “a detailed accounting regarding [their] expected payments to top management in the upcoming bonus season.”
The letter Cuomo just sent to the firms goes on to say, “Obviously, we [the State of New York] have grave concerns if your expected bonus pool has increased in any way as a result of our receipt or expected receipt of taxpayer funds from” the big ole government bailout. In addition, Cuomo asked banks to reveal any “bonuses awarded to employees receiving more than $250,000 in compensation” in 2006 and 2007. All this info, and a bit more, is due on the Attorney General’s desk by November 5th.
At a glance, it appears that banking exec compensation might soon receive yet another blow to the stomach, but a closer look reveals that nothing's likely to happen for some time as a result of Andy's note.
Given that the “grave concern” part of his letter sounds a lot like my mother when investigating some major or minor indiscretion of one her three sons—she'd line them up and begin her inquiry with, “I’m going to be very angry if you tell me that you [insert said indiscretion] …”—banks aren't going to be too quick to hand over any potentially incriminating pieces of paper, meaning that Andy's gonna have to do a lot more digging than sending a two-page letter to find anything he can use against the banks in a court of law, or just in another letter.
Plus, given the "more than $250,000 in compensation" part, Cuomo will, if banks take his deadline seriously (which is highly doubtful), have a stack of papers 250,000-inches high on his desk next Wednesday, meaning he's gonna be wading throgh paperwork for a long, long time. The quarter-of-a-million dollar-amount threshold, if we're talking all-in comp, which is how I read the letter, must cover a very high percentage of employees at firms that received the letter formerly known as investment banks (such as Goldman and Morgan Stanley) or those commercially-minded institutions with significant investment banking operations (Merrill, J.P. Morgan, Citi).
If nothing else, Andy was extremely polite in his lettter, closing with a “very truly yours” valediction.