We have another fly in the ointment. Judge Jed Ratkoff of federal district court refused to approve a $33 million settlement in the SEC vs. Bank of America Corp case.

In the complaint, the SEC had alleged that Bank of America Corp (NYSE: BAC) told investors in the proxy documents for the Merrill Lynch merger that Merrill agreed NOT to award year-end performance bonuses before the merger closed.

A report today in The New York Post reveals that bailed-out Bank of America (NYSE: BAC) is still doling out millions in bonuses to attract and retain top banking talent. Bank of America is catching heat over the bonus payouts, since it hasn't yet received federal clearance to repay its $45 billion in TARP loans.

Bank of America allegedly shelled out $15 million over two years to keep Fares Noujaim, an alumnus of both Bear Stearns and Merrill Lynch, who now serves as the company's vice chairman of investment banking. Harry McMahon is named as another banker who's been enticed to stay with handsome bonuses.

Bank lobbyists have a job I would not want. Their clients need them to fight a tide of populist revulsion against the use of taxpayer money to pay out billions in bonuses to bankers who pushed the global financial system into bankruptcy. More specifically, those bank lobbyists are buttonholing senators, trying to convince them to vote against a House bill that passed by a vote of 328 to 93, which would tax bonuses paid to bailout recipients at 90%. These lobbyists are making arguments that lack substance.

First, they suggest that restricting bonuses will put the companies at a competitive disadvantage. That argument is content-free because the bonus tax would apply to 500 firms that have received $200 billion from the government. This means that all those financial institutions will face the same bonus restrictions and thus all be on the same playing field. Moreover, these so-called talented individuals the lobbyists are seeking to reward with bonuses are the very same ones who made the money-losing deals in the first place. I am not sure how much more of that kind of "talent" we can afford.

The CEOs of the big TARP-backed banks appeared before the House Financial Services Committee yesterday to talk about the bailout and basically endure a few hours of awkwardness.

The Associated Press reports that "Anticipating confrontations over their own compensation, several asserted that none of the government's money went to bonuses or dividends" in their prepared remarks.

Ken Lewis followed the lead of many other bank CEOs. The head of Bank of America (NYSE: BAC) will take no bonus for last year. BAC will also miss its financial forecasts for 2008.

There is still a very substantial question about how bank boards handled the credit crisis and the M&A deals some large firms did in the wake of the trouble. Bank of America bought Countrywide just as other large banks picked up rivals at bargain prices.

But, were they bargains? There is a good deal of analysis emerging that JPMorgan (NYSE: JPM) may struggle to integrate Bear Stearns and other acquisitions. The balance sheets of the bank's targets may be worse than first realized.

Even if Countrywide was a relatively good deal, integrating it takes management time away from running the BAC core businesses which are likely to suffer heavy losses due to credit write-offs from consumer and business loans.

Lewis was the architect of the BAC M&A deals. He seems to be paying a relatively low price for the extent to which they have damaged the bank. The firm's board does not appear to care much about that.

The buck of bad decisions is being passed around at BAC and shareholders will probably end up with it.

Douglas A. McIntyre is an editor at 247wallst.com.

Flying shoe-dodger, President George W. Bush, has a track record of rewarding the guilty. After the faked intelligence that gave him the ammunition he needed to invade Iraq in 2004, Bush awarded a Presidential Medal of Freedom to CIA Director George "Slam Dunk" Tenet. And to reward the banks that got us into the current financial catastrophe, Bush rammed through Congress a bill that uses $700 billion of our tax dollars to pay bonuses to the executives who run those banks.

How did he do that? As usual, he did it secretively. The law that created the bailout bill includes provisions that limit executive compensation for banks that get bailout money. Specifically, the bill requires that banks report to the IRS any compensation above $500,000 paid to their top five executives. If that reporting does not occur, the IRS can impose tax penalties. Not only that, but there is no limit to what people below the top five can get paid -- so there never was any way to keep taxpayer money from paying millions to the traders and investment bankers who often get more than the CEO.

Vikram Pandit, Citigroup (NYSE: C)'s CEO, is set to announce an even bigger round of job cuts this morning. (This round may supercede the potential 10,000 layoffs announced last Friday.) Will these cuts help revive Citi? No. But they may lower its cash burn rate by $50 billion in 2009. And investors are not impressed, sending its stock down 2.2% in pre-market.

Citi's 53,000 job cuts would represent a 14% cut -- yielding a total workforce of 300,000. Citi may also decide on canceling management bonuses -- a move led by Goldman Sachs (NYSE: GS). Let's hope that these bonus cuts affect the entire industry -- not just top management. After all, the Treasury has already given $159 billion to 24 leading banks and it would be a shame to see that money going to pay bonuses to people who got us into this mess.

Meanwhile, Citi is posed to raise rates on its credit card customers. Citi, which had 182.7 million open card accounts card customers in the third quarter, has told as many as 20% of them that their rates are being raised by an average of three percentage points. Credit losses in Citi's global card division rose over a third to $1.59 billion in the third quarter of 2008.

Now, thousands of Citi workers will pay with their jobs.

Peter Cohan is President of Peter S. Cohan & Associates. He also teaches management at Babson College and edits The Cohan Letter. He owns Citigroup stock.

NY State Attorney General Andrew Cuomo wants to see detailed account of the bonuses banks and investment houses are planning to pay for 2008, and he wants the figures before the checks are passed out. According to The Wall Street Journal, "He is looking for information from banks that have received or are expected to receive funds under the Treasury Department's Troubled Asset Relief Program."

It is not clear why Cuomo has anything to say about a federal matter, but that has not stopped him from investigating Wall Street matters before. Among the firms being asked to supply data are Morgan Stanley (NYSE: MS) and Goldman Sachs (NYSE: GS).

Cuomo's case may turn on whether banks committed fraud by planning to make large bonus payments, but it is not quite clear why rewarding people for their work could be considered criminal. There may be an ethical problem with paying huge sums for work that, in some cases, lost Wall Street firms money. There may also be a shareholder issue about whether people holding stock in these companies think boards should pass out such a large portion of revenue to senior employees.

It has taken forever to curb huge payouts on Wall Street. There are now enough people looking into it that perhaps compensation will become more sane. Once the credit crisis is over, things can go back to the way they were.

Douglas A. McIntyre is an editor at 24/7 Wall St.

We know that some of that money went to pay for plush resort vacations in California. But that is only the small amounts. The Administration just figured -- "Heh, it's not our money going out the door -- who cares what happens to it?"

It was the same thing with $44.5 billion worth of government contracts for Iraq -- give friends the billions and let them do with it what they want. This attitude led to the firing of an Army official who refused to authorize $1 billion in questionable charges to KBR, the unit of Halliburton (NYSE: HAL) that Dick Cheney formerly ran.

American International Group (NYSE: AIG) is not required to report how it's spending our money, but hints have surfaced about where some of it went: $18 billion to cover losses on AIG's securities lending -- where it lent out securities which then declined in value, and $13 billion to pay guarantees on Guaranteed Investment Contracts (GICs). I know I had nothing to do with these bad business bets so why am I paying for them?

Seems the government, and the people, just can't seem to learn their lesson.

Wasn't it just last week that former Federal Reserve Chairman Alan Greenspan testified in front of a House committee, saying his model was flawed because he overestimated how entities -- run by people -- would react to a free system. He thought banks would act in their own best interest, which is to protect themselves and their stockholders. But seems the people who run these banks were more interested in protecting their own personal wealth and increasing it further, actually losing site of the bigger, longer-term picture.

So you'd think government would learn, right? Wrong.

Congressional investigators now want answers from Citigroup Inc. (NYSE: C), Goldman Sachs Group Inc. (NYSE: GS) and seven other banks that took the $125 billion as part of a taxpayer-funded bailout, fully planning on paying billions of dollars in pay and bonuses. What did we think? That they'd actually use the American people's money to help the economy? Forget the economy, to help their own firms? Of course not. They wanted the money to further cushion their own pockets.

This year Wall Street bonuses are looking to hit a new record. Last year, they hit a record of $21.5 billion and I've seen estimates that they'll be up between 10% and 25% in 2006.

One expert, Options Group, estimates that the big winners will be investment bankers and equity underwriters and traders. Driven by a record year in mergers, investment bankers will receive bonuses 20% to 25% higher than in 2005, as will those in equity derivatives sales. The "losers" will be fixed-income proprietary traders, who will earn the same or less than they did in 2005.

This year, the best place for bonus babies is the Goldman Sachs Group (NYSE:GS), which is distributing $16.5 billion worth of bonuses among its 36,000 employees -- up 40% from 2005. While this averages out to $623,418 per full-time employee, a few traders will take home $100 million.

How can any company justify paying so much money to one person? That $100 million bonus is 2,159 times the $46,326 that the median U.S. family earns every year! Do traders really work 2,159 times harder than the average family? Are their lives really 2,159 more stressful? How can any CEO justify paying out so much money?

The other night I was chatting up one of my friends, and mentioned that I'd be waiting for my bonus to decide how much I'd spend on a replacement camera. "The problem is," I said, "I have no idea about scale." I was thinking that, really, a bonus could be anything from 5% to 100% of your salary -- or more! The possibilties are endless.

She laughed, and started telling me stories. She comes from the nonprofit world, where ... well, let's just say that they aren't as generous as the i-bankers. One year she was making $36,000, and somehow she knew her Christmas bonus would be a percentage of her salary. She was realistic, hoping for maybe 5%! That would be nice. She kept waiting for the check to arrive, and one day casually mentioned it to her husband.

"Oh, I was wondering what that deposit for $36 was!" he said, laughing. 0.1%, to be exact.

But that wasn't the worst of it. A friend of hers was working for the Red Cross, and had set herself a monstrous goal for new donors. No one had ever achieved such a goal, but she thought she could do it, and she did! She and a co-worker were called before the board.

"We're really, really amazed at your achievement," they said. There were envelopes in their hands. She started thinking about what might be in them. Maybe $100! Or, even $200. So cool.