Waxman slams Lehman Brothers on executive pay

Rep. Henry Waxman (D-Calif.) said Monday that Lehman Brothers’ leadership was doling out millions of dollars to executives even as it begged the government for a bailout. 

In his opening statement for a hearing, Waxman, chairman of the House Oversight and Government Reform Committee, cited e-mails in which company officials mocked a recommendation by Lehman's money managers for top managers to give up bonuses.

{mosads}He also pointed to internal documents showing Lehman’s compensation committee recommended $20 million in “special payments” to three departing executives on Sept. 11, four days before the firm filed for bankruptcy.

Former Lehman CEO Richard Fuld is expected to testify later. In his prepared testimony, Fuld says, “As incredibly painful as this is for all of those connected to or affected by Lehman Brothers — this financial tsunami is much bigger than any one firm or industry.”

The hearing began with a partisan clash between Waxman and Rep. Christopher Shays (R-Conn.). Waxman blocked Shays from giving an opening statement.

“I believe there’s a cover-up going on and I’d like to make a statement,” Shays said.

Rep. Tom Davis (Va.), the top Republican on the committee, said he wanted to stress that Republicans' laissez-faire approach to regulation is not at fault for the economic meltdown.

Davis also urged a closer look at mortgage giant Fannie Mae, saying that former CEO Franklin Raines should be asked to testify as part of the committee's five-hearing investigation this month.