CNN "Anderson Cooper 360" - Transcript

Interview

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Let's dig deeper now on these excesses, but also the kind of bonuses that may be completely legal. Especially with nearly 10 percent unemployment, people are just outraged about this stuff, home foreclosures at record highs, credit still tight for a lot of small- business owners.

With us tonight, Congresswoman Marcy Kaptur of Ohio, who is sponsoring legislation that imposes an additional income tax on employees and ex-employees of companies that got bailout money, also David Walker, who was America's chief penny-pincher when he ran the Government Accountability Office during the Clinton and Bush years.

Representative Kaptur, what about this? I mean, why are these bigwigs, these executives in the financial industry getting these perks, when their companies were being bailed out by -- with U.S. taxpayer dollars?

REP. MARCY KAPTUR (D), OHIO: Because no one is standing up to them.

COOPER: So, they can just get away with it?

KAPTUR: They just get away with it.

There is a culture of greed and excess that operates at the highest levels. And there are many that are people intimidated by that. We need a country that changes its values from one of greed and excess to a culture of responsibility and prudence, certainly in the banking sector.

They should be leaders in helping our country dig its way out of this financial mess that we're in. But they're part of the problem, not part of the solution.

COOPER: David...

KAPTUR: I have a bill to recoup the bonuses. In addition to that, we need 1,000 agents at the FBI in the areas of mortgage fraud and securities fraud, because, if we can't recoup it through taxation, we need very diligent investigation, because control fraud is a distinct possibility in many of the securitization schemes that were developed.

And the FBI has been seriously underfunded.

COOPER: David, does it make sense? I mean, it doesn't make sense to a lot of folks at home who are listening to this to hear, OK, well, these companies are getting paid with taxpayer dollars to bail out. They're not giving out loans. They're -- they're -- they're, you know, foreclosing on people. And, yet, their perks are going up.

I mean does it make sense to you? You have been in the business world a long time.

Sorry. David, we're having a problem. We can't hear your mike.

We are going to take a quick break. We will get that fixed. We will talk to David and the congresswoman on the other side of the break.

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COOPER: That was President Obama at a fund-raising dinner earlier tonight in New York.

Back now with Congresswoman Marcy Kaptur of Ohio and former Comptroller General David Walker.

David, I think we have your mike fixed.

(CROSSTALK)

COOPER: I just want to re-ask you the question I asked you before, which is, I mean, a lot of folks out there don't get it, why -- why these executives should get more perks and at the same time that their companies are getting bailout money. Does it make sense to you?

DAVID WALKER, FORMER UNITED STATES COMPTROLLER GENERAL: Well, they -- they shouldn't, Anderson.

The fact is, we have a problem with the executive compensation and perks before the bailout. We have a problem after the bailout. There's a problem with the corporate governance system. Frankly, the federal government has done an extremely poor job of regulation, oversight and design of the bailout program.

There's a shared responsibility here.

COOPER: And what do you think, David, is the solution?

WALKER: Well, I think the solution is, the government ought to do its job. It ought to do a better job with regard to regulation, with regard to oversight.

It should not regulate executive compensation. I mean, frankly, if the government was on a pay-for-performance system, it would owe money. The fact of the matter is, is that we need to strengthen shareholder rights. We need to also have tougher capital requirements.

We have to have risk-related premiums for -- for a number of these institutions. We ought to not give them access to the Fed -- the borrowing from the Fed. There's a number of things that we ought to do. And Washington is still waiting. COOPER: Representative Kaptur, you introduced a bill, as you mentioned, that would recoup 100 percent of bonuses paid out by any company that received TARP money.

But why should these companies be forced to abide by rules that weren't in place last year, when they were offered the money?

KAPTUR: Well, because America needs it right now. And I think they should be leaders. They should be leaders for the country. They should try to make up to the country some of the -- for some of the damage that they have done.

And I agree with David that, in fact, we need an entire new financial architecture for our country. We should be taking some of these institutions into receivership. We should not be rewarding them. We should be working out the loans on their books and dealing with the people losing their homes across this country, and resolving this in the normal way.

We are trying to deal with this in a very abnormal way. And it's getting worse all across this country, more unemployment, more foreclosures, fewer bank loans being made.

COOPER: Let me just -- let me just play...

KAPTUR: The more money poured into the top, we're not getting the economy to unfreeze.

COOPER: Let me play devil's advocate -- let me play devil's advocate with you, though. There are plenty of folks who say, well, look, we need to give these top executives these perks, or -- or bonuses in some case, in order to retain good executives, in order to get these companies back on track.

KAPTUR: Well, you know what? If that's what it takes, they certainly made a mess of it.

I think we need a whole new set of people. In fact, I would support legislation to not allow any of these executives who have been involved in these terrible, terrible schemes to have any relationship with the federal government or do business with the federal government again.

COOPER: Let me ask David.

What do you think about that?

WALKER: Look, the fact is, is, for any system to be successful and sustainable, you have got to have properly aligned and integrated incentives, adequate transparency, and appropriate accountability.

With regard to pay, that doesn't exist right now. And we need to do something about it. But it needs to be done through the governance system, not through legislation.

COOPER: We're going to have to leave it there. Representative Kaptur, I appreciate you being on the program.

KAPTUR: Thank you.

COOPER: And, David Walker, as well, thank you very much.

Want to know...

WALKER: Good to see you.

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