Testifying on Capitol Hill, eight Wall Street CEOs offer little contrition. | John Shinkle/POLITICO Banking CEOs offer few apologies

It would seem Wall Street still doesn’t get it.

After hours of testimony and grilling before a House panel Wednesday, there were few apologies and little contrition offered by the eight Wall Street CEOs and recipients of taxpayer bailout money.


Only Citigroup CEO Vikram Pandit offered an unprompted apology, saying the decision to press on with a purchase of a $50 million corporate jet after receiving a bailout was wrongheaded.

“We understand that the old model no longer works, and the old rules no longer apply. ... We did not adjust quickly enough to this new world, and I take personal responsibility for that mistake. In the end, I canceled delivery,” Pandit told members on the House Financial Services Committee. “I get the new reality, and I will make sure Citi gets it, as well.”

Pandit also said he’ll take a mere $1 annual salary until his firm, which has received $45 billion from the bailout fund, returns to profitability.

Score one for Citi.

Most of the CEOs, who combined have taken $165 billion in taxpayer money, focused instead on touting the lending they are doing and the foreclosures they are preventing. Several — including Goldman Sachs CEO Lloyd Blankfein, JPMorgan Chase CEO Jamie Dimon and Bank of America CEO Ken Lewis — stressed that they only took money from the Troubled Asset Relief Program at the urging of federal officials.

House Finance Committee Chairman Barney Frank (D-Mass.) seemed willing to give them a pass. “I’m more focused on the future than the past,” he said in an interview, explaining that he’s not interested in the “psychodrama” of the issue.

But many Americans — and quite a few of their congressional representatives — are not so forgiving.

In the January NBC/Wall Street Journal poll, Wall Street actually ranked below Congress and the national news media in public confidence. And those kinds of numbers are an invitation for vitriol on Capitol Hill.

“I have some people in my constituency that actually robbed some of your banks, and they said the same thing: They’re sorry, they didn’t mean it, they won’t do it again,” said Rep. Michael E. Capuano (D-Mass.), mocking the CEOs’ claims that they’ve done so much good for the economy.

“Do you understand that it is a little difficult for most of my constituents to take, that you learned your lesson?” he asked.

“None of us — America doesn’t trust you anymore,” Capuano said.

Indeed, it was only in the hearing’s third hour, at the prodding of lawmakers, that the chief executives offered any broad-based mea culpa for helping get the economy into its current mess — a sentiment their British counterparts offered freely during a similar public appearance.

“Do you feel that the industry has anything to apologize to the American people for so that we can try to have some reconciliation moving forward?” asked Rep. Gregory W. Meeks (D-N.Y.).

“It’s a tough question,” replied Morgan Stanley CEO John Mack.

After that less-than-auspicious start, Mack did say that the industry clearly made mistakes from its use of leverage to making bad loans to the designing of complex instruments. If Morgan Stanley could go back and do it differently, it would, he said.

“I’m especially sorry for what’s happened to shareholders and ... the American people,” he said. “Clearly, as an industry, we have accountability and a responsibility. It is much broader than just this group of people, but we all have responsibility, and I will take that responsibility for my firm.”

Republicans also jumped into the diatribe. Rep. Leonard Lance (R-N.J.) told Lewis that he was “disturbed” by the reports that Merrill Lynch secretly accelerated billions worth of bonuses to executives before Bank of America’s purchase was completed Jan. 1.

New York Attorney General Andrew Cuomo sent Frank a letter Wednesday detailing how Merrill Lynch doled out about $3.6 billion in early bonuses at the same time senior executives knew earnings were disastrous.

“Things got changed. We’re in charge now,” Lewis assured Lance. Lewis testified earlier that Bank of America discouraged Merrill’s excessive bonuses but did not have control over them.

The topic of Wednesday’s hearing was for the CEOs to tell Congress what they’ve done with the bailout money they’ve received so far amid reports that lending is still tight.

They testified that they have increased lending — despite heavy criticism from lawmakers that banks are merely sitting on the bailout money.

Goldman Sachs has committed more than $13 billion in new financing since receiving $10 billion from the government in October, Blankfein said, with some of that going to a mixed-use housing project in New Orleans and major American corporations such as Verizon and Pfizer.

The CEOs also testified that they didn’t use taxpayer dollars to fund bonuses to employees, another source of public ire.

But few were buying that one.

“Gentlemen, money is fungible. Don’t insult our intelligence,” said Rep. Brad Sherman (D-Calif.), arguing that there’s no difference between directly handing tax dollars out as bonuses and using depositor money for bonuses, then replacing the missing deposits with bailout funds.

“The issue is, what dividends and bonuses did you pay and will you pay while you’re holding taxpayer money? ... You had extra money, and instead of loaning it to the economy, instead of repaying it to taxpayers, as you should have done, you sent it as dividends,” he said.

When each CEO was asked if he had instituted policies against paying dividends while holding bailout money, only Citigroup’s Pandit and Bank of America’s Lewis raised their hands. Citigroup agreed to limit its dividend payments to 1 cent as a result of its most recent deal with federal officials for bailout money.

Frank said he was encouraged by Wednesday’s testimony because the CEOs demonstrated they understand that they need to increase lending, curtail excessive compensation and address foreclosures.

But Wall Street has more work to do to regain the public trust necessary for Congress to take the steps needed to get the financial system working again, he added.

“Words aren’t going to do it,” he said. “They have to follow through.”