No private jets as Wall St CEOs face US Congress

WASHINGTON:Once they were "masters of the universe," corporate jets at the ready.

But on Wednesday, eight top U.S. bank chief executives will flycommercial or ride Amtrak to explain themselves to Congress, testifying beforethe U.S. House Financial Services Committee about what's happened to some $176billion in taxpayer money.

That's the amount pumped into the banksby the U.S. Treasury Department since October when Congress created a historic$700 billion bank bailout.

Just days after former Treasury SecretaryHenry Paulson began buying the banks' preferred shares last October to prop uptheir balance sheets, there were already questions about what the banks weredoing with the money.

Reports surfaced of big executive bonuses,buyouts of other banks, expensive travel and hoarding cash. There were few signsthe banks were injecting the money into the economy.

Even now, fourmonths into the bailout, known as the Troubled Asset Relief Program (TARP), fewfully understand what happened to the money, according to watchdog groupsassigned to monitor it.

The CEOs scheduled to testify on Wednesdayinclude Goldman Sachs Group Inc's Lloyd Blankfein, JPMorgan Chase & Co's James Dimon, Citigroup Inc's Vikram Pandit, and Bank of America Corp's KennethLewis.

Also testifying are John Mack of Morgan Stanley, Robert Kellyof Bank of New York Mellon Corp, Ronald Logue of State Street Corp and JohnStumpf of Wells Fargo & Co .

Stumpf, Kelly, Logue,Mack and Pandit are taking commercial flights to Washington for the hearing,while Dimon and Lewis are taking the train, said bank officials.

Goldman said Blankfein will take "public transportation," butdeclined to give details, citing security concerns.

'POLITICALTHEATER'

The committee, chaired by Rep. Barney Frank, will press theCEOs for answers on how they used the bailout funds.

The hearingscould mirror the October pasting that Richard Fuld, the disgraced head of LehmanBrothers Holdings Inc, received from lawmakers, outraged over the bank'sdownfall.

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In a sign of the crisis' global reach, top British bankersapologized to a parliamentary committee hearing on Tuesday for mistakes thatbrought Royal Bank of Scotland Plc and HBOS Plc to the brink of collapse.

"You've destroyed a great British bank," opposition Conservativepolitician Michael Fallon told Fred Goodwin, the RBS CEO ousted after the U.K.government rescued the bank by taking a 70 percent stake.

TheCongressional hearing will be the first time so many U.S. bank CEOs face thewrath of Washington politicians since the global capital crunch hit home.

"This will be great political theater," said Jaret Seiberg, a policyanalyst at investment firm Stanford Group Co.

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For men accustomed toprivate jets, gilt-edged corporate luxury -- such as the $1.2 million thatformer Merrill Lynch CEO John Thain spent to renovate his office -- andthousands of employees at their beck and call, the public glare of acongressional hearing is seldom easy.

With Frank, the MassachusettsDemocrat known for his sharp tongue and little patience for long-winded answers,wielding the gavel, committee members are likely to pillory the CEOs.

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Lawmakers are expected to vent the same anger they say they'rehearing from voters about TARP, the years of colossal executive pay, and thebanks' role in pumping up the real estate bubble that triggered the economiccrisis.

DISTRUST, ANGER When the new treasury secretary, TimothyGeithner, announced a new financial rescue plan on Tuesday, he also criticizedpast approaches and many Wall Street leaders.

"The spectacle of hugeamounts of taxpayer assistance provided to the same institutions that helpedcause the crisis added to public distrust," Geithner said at a news conference.

"The American people have lost faith in the leaders of some of ourfinancial institutions, and they are skeptical that their government has usedtaxpayers' money in ways that will benefit them."

Auto industryexecutives ran into that buzzsaw of anger last year, when they flew on privatejets to Washington to ask the government for billions of dollars in bailoutmoney.

Last week, the Senate voted to ban bonuses for top managersat banks and companies getting bailout assistance. The vote came a day afterPresident Barack Obama put a $500,000 cap on executive pay and otherrestrictions on bailout beneficiaries.

Blankfein took home around$70 million in compensation in 2007. Goldman got $10 billion under TARP inOctober and has benefited from other federal bank assistance programs.

Blankfein did not get a 2008 bonus, but received a cash salary of$600,000 and may have received other compensation not yet disclosed.