“Congratulations! Here’s a Bonus for Doing Such An Outstanding Job Investigating That Fiasco That Happened Because You Screwed-Up In The First Place!”

"Iolanthe's" Lord Chancellor has nothing on me: his nightmare* was only "love unrequited." Mine is the SEC.

[  I read about the following outrage before going to bed last night, and vowed to write a post on it in the morning. It literally gave me nightmares and an upset stomach, so disrupting my repose that I gave up and headed to the keyboard. I am writing this at 4:30 AM. I have never written anything at 4:30 AM before, but I have learned something useful for future reference: I’m not in a good mood then.]

And here we have a prime example of why 1) many people don’t trust the Federal government and 2) why they are 100% right to feel this way.

I’ll take “Incompetence, Failure of Accountability and the Appearance of Impropriety” for a thousand, Alex!

SEC  Inspector General H. David Kotz has issued a thorough report on the U.S. Securities and Exchange Commission, revealing that an employee who investigated Bernie Madoff in 2005 and 2006 and failed to notice that he was running a $50 billion Ponzi scheme was later rewarded by the agency with a cash bonusfor his fine work on the Madoff scandal after it was discovered, the lives ruined, the damage done.

Someone in the SEC leadership nominated the unnamed employee for a bonus in September 2009, shortly after a massive report detailing the SEC’s failure to catch Madoff. That report flagged the same employee — and the assistant regional director who nominated the employee for the award!!!! — for “numerous performance issues” and potential disciplinary action. The SEC postponed payment of the bonus  until April of 2010, having determined that the employee didn’t deserve to be fired for failing to uncover the largest financial investment scam in U.S. history that was unfolding before his eyes. Apparently if you are not bad enough to be fired at the SEC, then you are good enough for a bonus. This is the government way.

Ah, yes, those anti-government zealots are stark raving mad I tell you! Mad!

Tell me: is it still fair for the Obama Administration to blame the Bush Administration for the economy, when it is not only keeping many of the same incompetents from the Bush days around, but is also rewarding them for a job well done?

I don’t know, but Inspector General Kotz suggests in his report that “to reward the employee’s efforts in 2009 pertaining to a follow-on investigation of Madoff” when his ineptitude played what the report concludes was a pivotal role in allowing Madoff to get away with his swindle for so long “jeopardizes the integrity of the awards program.”

Ya think???

I’d say that’s a fair conclusion. Kotz also found that the SEC’s budgeting process for employee awards is “flawed and ineffective.” But hey—they SEC doesn’t award you much for being a screw-up, just $951 per person in 2010. Peanuts really. A pittance. 2,524 cash awards, the 2010 total, times $951 is only a little more than $2, 400, 000.

And isn’t that a small price to pay to reward those tireless public servants who may not be able to stop the financial misconduct they are charged with preventing, or stop it from savaging the economy, but who are aces at cleaning up the mess afterwards?


* For the culturally-deprived souls who are unfamiliar with “The Nightmare Song,” the epic patter song, sung by the Lord Chancellor of England, that highlights Gilbert and Sullivan’s operetta Iolanthe, here is a good version. Not as good as mine, of course.

6 thoughts on ““Congratulations! Here’s a Bonus for Doing Such An Outstanding Job Investigating That Fiasco That Happened Because You Screwed-Up In The First Place!”

    • Since they both apparently should have been fired, that’s tough to answer. I guess you can’t blame someone for somebody else nominating him, so the nominator had to get the nod.

  1. If all of our Federal Agencies are run like the SEC, it’s no wonder we have huge deficits and an economy in virtual ruin. And this is all Bush’s fault, right? No, it’s a lack of leadership on Obama’s part, and a lack of responsible oversight by the heads of his key agencies. Have us all undress at airports for national security, but ignore what’s going on in one of our primary economic watchdog agencies? Our economic health is just as important as the shoe bomber, in my opinion. Bernie Madoff basically murdered (economically) a logarithmically higher number of people than the shoe bomber would have…

    By the way, whatever happened to the SEC employees who were caught spending up to six hours a day on government time looking at porn on their work computers? Were they fired, or did they get awards, too?

  2. (In honor of your 4:30AM post, I am responding to the video as I would if I were responding at 4:30AM.)
    Butthead: Uhhhhhhh . . . that’s pretty cool.
    Beavis: Hey! Is that Ozzy Osborne?!?
    Beavis: What’s this song about?
    Butthead: Uhhhhhhh , I think he said he didn’t even know.
    Beavis:Hey, didn’t that guy have some sort of *list*?
    Butthead: Uhhhhhhh . . .I don’t know.
    Butthead: Whoa!!! Now he’s rapping. Ozzy rapping is cool.
    Beavis:Heh heh, yeah, British dudes rapping is cool.


  3. I spent 25 years working for a Federal agency that was not the SEC, and, yes, it was run the same way. You got an award because you were buddies with the supervisor, and/or because it was your turn. It had little to nothing to do with competence, and everything to do with “spreading the wealth around” to friends. A pox on both their left- and right-wing houses, I say. I’d like to strip most power from the Feds and return the bulk of it back to where it belongs, to the state and local level where we could have at least some modicum of control, but I believe we’re already past the point of no return. My dad-dratted, misguided slave-owning ancestors saw to that.

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