Merrill’s Stan O’Neal wasn’t ready for subprime time, but he was a record-setting fundraiser for Bush
Merrill Lynch’s ouster of CEO E. Stanley O’Neal is good timing for the financial behemoth, but it comes a few years too late for America and for thousands of Merrill employees.
He’s being driven out for his reckless bundling of subprime mortgages into shaky securities that Merrill aggressively peddled and that are now shaking Wall Street’s foundations. Yes, these big financial institutions play funny money with your monthly payments, making millions while you don’t see a dime from their monopoly tactics.
Not that this is anything new. The explosion in subprime mortgages is caused in large part by predatory lending practices, which are particularly aimed at black people (O’Neal used to be one of those) and other minorities.
More on O’Neal in a minute, but as I wrote in April 2001 about this financiopathic scheme — “From the Subprime to the Ridiculous” — when the War of Terror was still being waged almost entirely on the domestic front by banks and companies like Merrill:
A guerrilla war that has dealt serious defeats to predatory lenders has spread from states like North Carolina and Massachusetts to big cities like Chicago and Philadelphia, which recently passed ordinances aimed at ending unfair banking practices. So why hasn’t the fight against what some have called “financial apartheid” spread to the biggest city of all?
State regulators in Albany adopted new restrictions on finance companies late last year, but activists say the victims of those profiteers still lack meaningful protection—help that could come from city officials. In New York, Mayor Giuliani has taken no action against predatory lending, say community organizers, and the City Council has done practically nothing.
But the big banks are worried about Giuliani’s potential successors. Citigroup has already laid big cash on the campaign coffers of prominent Democrats. …
Public Advocate Mark Green can say he probably was the first of the four Democratic mayoral candidates to make a big splash about the serious problem of blacks, Latinos, and the elderly being targeted by abusive lending practices. But neither he nor the other three Democrats have taken strong action to protect the poor from signing their lives away in unfairly structured loans.
Green saw it coming back in 1993, when his Consumer Affairs Office released a report pointing out a growing number of predatory loans in the city. Since then, Wall Street has financed a huge surge in the so-called subprime market, and more people than ever are being seduced into high-cost refinancing plans and shady home-improvement loans that are sending them toward bankruptcy. … Green isn’t eager to enact new regulations.
In those days, Stan O’Neal, while firing thousands of Merrill employees, was recklessly expanding Merrill’s subprime bidness.
In 2003, as I previously noted, O’Neal, the highest-ranking black man on Wall Street, was a reckless bundler in another way: He set a fundraising record for George W. Bush‘s campaign by sending out a letter that generated $279,750 from other rich people in less than three weeks’ time, the most in such a such a short period.
O’Neal, one of the nine Bush “Rangers” on Wall Street, was a prime bundler before the term hit its current vogue.
As this moneychanger is being driven from the temple, he’ll be dragging along a big bag of cash. Details of that aren’t immediately known, but, like most CEOs, he had one helluva deal. For instance, as the New York Times‘s Eric Dash noted this past April, O’Neal had a particularly sweet clause in his Merrill deal just in case the big company wobbled so much that it fell under the control of another big company:
Hell, that was incentive for him to be reckless enough take Merrill into the toilet. If he had stayed around long enough to really ruin the company to the extent that some other behemoth would take control, he would have gotten a quarter of a billion.
Now O’Neal joins the ranks of former Merrill employees. He probably won’t be asked to join them for commiseration drinks. He fired more than 25,000 of them during his tenure.