There have been numerous examples of banks and business people enriching themselves during the credit boom and in the current slump. There’s been fraud like the Bernie Madoff ponzi scheme, but nothing quite as offensive as the way Merrill Lynch bankers raided their company’s accounts just before it was formally absorbed by Bank of America in late December and legally grabbed up to $US4 billion.

Merrill had been forced into the arms of Bank of America in September after it hovered on the same brink as Lehman Brothers — but before the takeover the board okayed a $US4 billion payout of bonuses.

That was despite the fact Merrill Lynch lost a huge $US15 billion in the quarter, losses far greater than anyone had expected, which forced Bank of America to ask for more aid from the government.

It was as though the officers of the Titanic raided the ship’s safe and stole some of the contents in the hope it wouldn’t be noticed and that they would be saved and rich.

Meanwhile Citigroup has replaced its 13 month chairman with a director who has been on the board since 1996 and been a part of every wrong decision that has imperilled what was once the world’s biggest bank. Richard Parsons was hardly the best CEO of media giant, Time Warner, but his time on the Citi board should have seen him out the door for his part in all the dud dealings and poor governance on risk management, investments. He is as much to blame as anyone for Citi’s pitiful state where it now being kept alive by the US taxpayer.

As is Bank of America (BofA) as it struggles with the scandal of the greedy bankers at Merrill Lynch. US taxpayers have contributed $US45 billion to bank of America to keep Merrill alive: Merrill’s bankers paid themselves $US15 billion in compensation last year (down a mere 6%, despite a $US42 billion loss).

And of that payment, at least $US4 billion was grabbed late last month as Merrill’s struggled with greater than expected losses. If an ordinary individual did something like that, there would be hell to pay, but the bankers seem to be free and clear.

Today Bank of America fired John Thain, the head of Merrill’s over the self enrichment.

Thain was sacked by BofA chief executive Ken Lewis, who flew to New York from Charlotte, North Carolina, for a face-to-face meeting.

The reason is easy to see: this week news emerged of tensions inside the two companies over bigger-than-expected losses at Merrill which forced BofA to ask the Government for more financial help, which was given.

Then the FT reported a day ago that Merrill Lynch had accelerated its bonus payment plan for 2008 and paid out close to $US4 billion in discretionary bonuses on December 29, just three days before the BofA acquisition was completed, in spite of posting operating losses of $US41.2 billion for the year.

It was a great story, obviously there was some inside help, but its content was offensive, especially coming the day that President Obama moved into the White House and froze the salaries of everyone there earning $US100,000 a year or more.

Merrill Lynch took the unusual step of accelerating bonus payments by a month last year, doling out billions of dollars to employees just three days before the closing of its sale to Bank of America.

The timing is notable because the money was paid as Merrill’s losses were mounting and Ken Lewis, BofA’s chief executive, was seeking additional funds from the government’s troubled asset recovery programme to help close the deal.

Merrill and BofA shareholders voted to approve the takeover on December 5. Three days later, Merrill’s compensation committee approved the bonuses, which were paid on December 29. In past years, Merrill had paid bonuses later — usually late January or early February, according to company officials.

Within days of the compensation committee meeting, BofA officials said they became aware that Merrill’s fourth-quarter losses would be greater than expected and began talks with the US Treasury on securing additional Tarp money.

Last week, BofA said it would be receiving $20bn in Tarp money, in addition to the $25bn that had been earmarked for it and Merrill last year. It was then revealed that Merrill had suffered a $21.5bn operating loss in the fourth quarter.

Despite the magnitude of the losses, Merrill had set aside $15bn for 2008 compensation, a sum that was only 6 per cent lower than the total in 2007, when the investment bank’s losses were smaller.

The bulk of $15bn in compensation was paid out as salary and benefits throughout the course of the year. A person familiar with the matter estimated that about $3bn to $4bn was paid out in bonuses in December.

This should be the final straw for those who want much closer control over banks, executive payments and tougher regulation. Those who oppose such controls have again disappeared and aren’t game to defend this greed, or for that matter the so-called “free market”.