We thought Alan Greenspan's "blame everybody but me" comedy act would be impossible to top, but that was before Kerry Killinger positively slayed them down on Capitol Hill this week.
Pitched for a fight, the former Washington Mutual CEO fingered federal regulators and Wall Street insiders for his bank's failure Tuesday, claiming firms that were "too clubby to fail" were sheltered during the 2008 financial crisis. Appearing before the Senate's Homeland Security and Governmental Affairs Committee's investigating panel, Killinger complained of "unfair treatment" for his bank, which was seized and sold for a pittance to JPMorgan Chase (Stock Quote: JPM) in September 2008, making it the largest U.S. bank ever to fail.
"For those that were part of the inner circle and were 'too clubby to fail,' the benefits were obvious," argued Killinger, referring to the liquidity and capital injections received by other banks. "For those outside the club, the penalty was severe."
Come on Kerry, that's a joke and you know it. In 2006, you sold $29 billion in subprime mortgage securities to investors, up from $2.5 billion in 2000, so you clearly had no trouble rubbing elbows with Wall Street's big boys. And your paycheck certainly resembled that of a Wall Street titan with you pulling in nearly $100 million in compensation between 2003 and 2008. For heaven's sake, you made more than $20 million in 2008, and you didn't even finish the year!
The real hilarity is how you "earned" all that cash by incentivizing your staff to make loans to anybody with a pulse and a pen, while simultaneously removing even the slightest hint of risk management.
Our largest laugh, however, came this week when it was revealed that you were afraid to hire Goldman Sachs (Stock Quote: GS) to help WaMu out in late 2007, choosing Lehman Brothers instead due to a fear that you would be "swimming with sharks" by going with Goldman.
"I trust Lehman more for something this sensitive. But we would need to assess if they have the smarts we need," wrote Killinger in an email
11 months before the crisis would consume both banks.
Welcome to the club, Kerry. Say hello to Bear Stearns for us.
Dumb-o-meter score: 90 -- Killinger should ask the Friars Club to let him in. Maybe they will find his shtick as funny as we did.