‘Chaotic last hours’

Tuesday, Oct. 7, 2008 | 2:07 a.m.

The first congressional hearing into the origins of the financial crisis on Wall Street brought into full view one of the reasons why so many people on Main Street USA furiously opposed the $700 billion federal bailout.

Under scrutiny Monday by the House Oversight and Government Reform Committee was Lehman Bros. Its bankruptcy filing Sept. 15 — due largely to its own bad decisions in recent years after having established a trusted reputation since 1850 — set off what The Wall Street Journal described as a chain reaction resulting in a “global cash crunch.”

Despite the world-shaking consequences of the company’s impending doom, internal documents discussed publicly by the committee at Monday’s hearing show Lehman executives ensuring they would personally emerge wealthy by way of “year-end bonuses, stock buybacks and dividend payments.”

The committee’s chairman, Henry Waxman, D-Calif., said the documents reveal Lehman to have been “a company in which there was no accountability for failure.”

Lehman’s chief executive, Richard Fuld Jr., acknowledged personal compensation of more than $300 million since 2000. Of even more interest were documents written by executives in what the Associated Press reported were the company’s “chaotic last hours.”

One discussion involved a recommendation from accountants at Lehman’s off-Wall Street management subsidiary — that the company’s top executives forgo their multimillion-dollar bonuses.

Lehman executive George H. Walker, a cousin of President Bush’s, apologized for the recommendation in a memo to Lehman’s executive committee. Waxman quoted from the memo, which included this gem: “Sorry team. I’m not sure what’s in the water at 605 Third Avenue today ... I’m embarrassed and I apologize.”

For such an attitude, an apology and much more are owed to Main Street USA and to the world.