Congress grills Lehman chief on financial crisis

In the first of what will be a series of hearings looking at the causes of the current financial crisis, the chief executive of Lehman Brothers was grilled about the millions in bonuses paid to the firm’s executives, even as the company appealed to the federal government for a bailout to save it from bankruptcy.

California Congressman Henry Waxler: "Seems that the system work for you, but it didn’t seem to work for the rest of the country, and the taxpayers who now have to pay up to $700 billion dollars to bail out our economy. We can’t continue to have a system where Wall Street executives privatize all the gains and then socialize the losses. Accountability needs to be a two-way street."

According to Todd Zwillich, reporter at "Capitol News Connection," members of Congress — almost exclusively Democrats — went after Fulds about his exorbitant compensation — somewhere between $350 and $500 million dollars in personal compensation earned between 2000 and when Lehman Brothers failed.

Fulds: "What happened to Lehman Brothers could have happened to any financial institution, and almost did happen to others — Bear Stearns, Fanny Mae, Freddie Mac, AIG, Washington Mutual and Merrill Lynch were all were trapped in this vicious cycle."

Zwillich says Fulds’ presentation was, "A combination of defiance, taking responsibility and then also shifting responsibility. He did make a very definitive statement that the buck stops with him, and he takes all responsibility for what went wrong at Lehman; and then came up with a litany of reasons as to why it was beyond his control."

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