NEW YORK (Reuters) - Disgraced CEO Richard Fuld, who oversaw the demise of venerable Lehman Brothers Holdings Inc that helped tip the credit crunch into a full-blown crisis, will testify at a congressional hearing this week.
Rep. Henry Waxman, the Democratic chairman of the U.S. House of Representatives Committee on Oversight and Government Reform, has called Fuld and former chief executives of insurer American International Group Inc to appear at hearings into the financial excesses that led to the collapse of the companies.
“Lax oversight and reckless investments on Wall Street are causing massive disruption throughout our economy,” Waxman said in a statement on the committee’s website. “Our hearings will examine what went wrong and who should be held to account.”
The hearings are likely to be testy, given the foul mood of the U.S. Congress after having had to swallow a $700 billion bailout package to keep Wall Street from bringing the entire nation’s economy to it knees due to a stifling credit crunch.
Waxman has a reputation for raking high-profile corporate executives over the coals as cameras roll.
Fuld is scheduled to appear before the committed on Monday in what would be his first public appearance since Lehman filed for bankruptcy.
On Tuesday, the committee will take on former AIG CEOs Robert Willumstad, Martin Sullivan and Maurice “Hank” Greenberg.
A spokeswoman for Lehman Brothers declined to comment.
Last month, Waxman asked the CEOs to provide internal documents and communications transmitted to and from the executive suites during a 180-day period leading up to September 16, the day after Lehman, the 158-year-old investment bank and Wall Street fixture, filed for bankruptcy.
Excessive executive pay will be a theme at the hearing. Multimillion-dollar salaries and golden parachutes for exiting executive has been a hot topic of debate as the House and Senate worked to craft bills to bail out foundering financial institutions.
Fuld received $22 million in bonuses alone for 2007, although he is not receiving a golden parachute.
Fuld, who in a four-decade career at Lehman deftly steered the company through the Asian debt crisis of 1998, is widely seen as having been far to slow to recognize the bank’s need to raise capital and shed bad assets prior to its collapse.
Lehman, the biggest investment bank to collapse since 1990, listed $639 billion in assets at the end of May in its bankruptcy filing.
Editing by Andre Grenon