Erika Eichelberger

Erika Eichelberger

Reporter

Erika Eichelberger is a reporter in Mother Jones' Washington bureau. She has also written for The NationThe Brooklyn Rail, and TomDispatch. Email her at eeichelberger [at] motherjones [dot] com. 

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AIG CEO Says People Angry Over Wall Street Bonuses Are Like a Lynch Mob

| Tue Sep. 24, 2013 9:30 AM EDT

Is a public upset about big bonuses at bailed-out Wall Street firms akin to a lynch mob? The CEO of the insurance giant AIG thinks so. In an interview with the Wall Street Journal, Benmosche talks about the outrage that erupted in March 2009, when AIG—which had just received a $170 billion bailout—announced it would pay up to $450 million to employees in the financial products unit that brought the company to the brink of collapse.

Here's what Benmosche said:

"That was ignorance…of the public at large, the government, and other constituencies. I’ll tell you why. [Critics referred] to bonuses as above and beyond [basic compensation]. In financial markets that's not the case… It is core compensation.

"Now you have these bright young people who had nothing to do with [the bad bets that hurt the company]…They understand the derivatives very well; they understand the complexity…They’re all scared. They probably lived beyond their means…They aren’t going to stay there for nothing.

The uproar over bonuses "was intended to stir public anger, to get everybody out there with their pitchforks and their hangman nooses, and all that–sort of like what we did in the Deep South. And I think it was just as bad and just as wrong.

"We wouldn’t be here today had they not stayed and accepted…dramatically reduced pay…They really contributed an enormous amount [to AIG’s survival] and proved to the world they are good people. It is a shame we put them through that."

Interestingly, the main interview with Benmosche ran in the Journal Friday, but as the Columbia Journalism Review notes, this particular clip only showed up on the website's MoneyBeat blog two days later.

Elizabeth Warren's Consumer Watchdog Forces JPMorgan to Pay $329 Million

| Thu Sep. 19, 2013 4:10 PM EDT

During last year's Massachusetts Senate race, the banking giant JPMorgan Chase heaped more than $80,000 on Sen. Elizabeth Warren's opponent Scott Brown. And for good reason. The consumer watch dog agency that she conceived of and helped get running announced Thursday that it has ordered JPMorgan Chase to pay $309 million to more than 2.1 million Americans it scammed, plus a penalty of $20 million.

The Consumer Financial Protection Bureau (CFPB) found that between 2005 and 2012, Chase charged customers monthly fees ranging from $8 to $12 for services they didn't ask for and didn't receive. The bank collected money from customers for credit card products such as "identity theft protection" and "fraud monitoring," even when the consumer hadn't given consent.

The refund the CFPB ordered the bank to issue includes the total fraudulent fees charged, plus interest, and amounts to about $147 a person.

"At the core of our mission is a duty to identify and root out unfair, deceptive, and abusive practices in financial markets that harm consumers," CFPB director Richard Cordray said Thursday.

The bureau is also forcing the bank to send out the refund checks in a simple, convenient way, so that consumers don't have to take any additional action to get their money, and to submit to an independent audit of the refund process.

Thursday was not a good day for for JPMorgan. In a rare admission of fault, the bank was also fined some $920 million for a bad trade out of its London office last year that resulted in a $6.2 billion loss.

House Republicans' Latest Obamacare Freakout: Identity Theft!

| Thu Sep. 19, 2013 10:45 AM EDT

Conservatives have been freaking out lately about how Obamacare, the president's signature health care law, could lead to massive identity theft. Now House Republicans have joined in.

The Affordable Care Act provides $67 million to over 100 community and health care groups to hire "navigators" to help sign up uninsured Americans for health coverage through the new health insurance exchanges that go into effect on October 1. A report released by the House Committee on Government Oversight and Reform on Wednesday found that more safeguards are needed to ensure that criminals don't impersonate navigators in order to steal financial details from people trying to sign up for health insurance.

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