FDA Pays Millions in Executive Bonuses
DOBBS: Outrage and disbelief over the latest scandal at the embattled Food and Drug Administration. Last week FDA officials told Congress they don't have enough money and inspectors to screen more than a percent, just one percent of our imported food. But as Lisa Sylvester now reports on another case of the best government that money can buy, there seems to be enough money around to pay rather hefty bonuses for the top brass at the dysfunctional FDA.</s>SYLVESTER (voice-over): The Food and Drug Administration has been failing to keep dangerous food imports out of the United States, according to congressional lawmakers. Despite the low marks, FDA top officials have awarded themselves generous bonuses.</s>CHRIS WALDROP, CONSUMER FEDERATION OF AMERICA: A lot of those bonuses are going to the top officials and it's not really going to the people that are on the ground that are doing the work every single day, protecting the American public.</s>SYLVESTER: According to congressional records, FDA annual retention bonuses ballooned from $2.7 million in 2002 to more than $8 million in 2006. One employee alone, Margaret Glavin, the associate commissioner for regulatory affairs, received a cash bonus of more than $48,000 in 2005 and then another cash bonus topping $44,000 in 2006. This is in addition to her annual salary of more than $150,000 a year. Glavin did not return CNN's call for comment. The hefty cash bonuses have been handed out as the FDA has been strapped for cash, with an imported food inspection rate of less than 1 percent.</s>WENONAH HAUTER, FOOD AND WATER WATCH: I think that people would be pretty shocked to know that this is how their taxpayer dollars are being spent. We need more inspection. We need more testing. And the agency says that they don't have the money to do this, but, yet, they have the money to do bonuses.</s>SYLVESTER: The agency has requested more funding in next year's budget, but during a hearing last week, Representative Bart Stupak, who chairs the subcommittee that oversees the FDA, demanded accountability.</s>DR. DAVID ACHESON, ASSISTANT COMMISSIONER FOR FOOD PROTECTION, FOOD AND DRUG ADMINISTRATION: We have made requests through the 2008 budget process for an increase in...</s>REP. BART STUPAK (D), MICHIGAN: And how much was that increase?</s>ACHESON: I think it was about $10 million or thereabouts.</s>STUPAK: And what was the $10 million going to be targeted for? Hopefully not bonuses.</s>SYLVESTER: The FDA justifies the bonuses saying it must compete with the private sector. A spokeswoman tells CNN -- quote -- "They could make a lot more money in the private sector. One of the ways to recruit and retain them is to offer them bonuses."</s>SYLVESTER (on camera): Members of the House Energy and Commerce Committee have asked the inspector general of the Department of Health and Human Services to investigate the bonuses handed out. Senator Byron Dorgan has asked for the Government Accountability Office to conduct a similar review. Lisa Sylvester, CNN, Washington.</s>DOBBS: Communist China expanding its economy, expanding its military all with the great Yankee dollars. So many of those dollars, in fact, China is buying up corporations all over the world, and it appears communist China's next target is investment firm Bear Stearns. China already America's biggest banker, by the way, the second largest holder of our debt bought with a cash proceeds of that record trade deficit. As Christine Romans reports, the Chinese are putting America's money to work in their own interest and making it very clear, there's no such thing as free trade.</s>CHRISTINE ROMANS, CNN CORRESPONDENT (voice-over): Is America's banker looking to buy a piece of an American investment bank? A top Chinese banking official this week says CITIC Group, the overseas investment arm of the Chinese government, is interested in a stake in Bear Stearns -- a Wall Street institution that survived the crash of '29, but has battered by the mortgage crisis. A day later, Civic issued a statement saying a deal is not imminent. But what is clear is that China has the intent and the funds to buy almost anything it wants -- and financial services are next.</s>CHARLES MCMILLION, MBG INFORMATION SERVICES: Investment banking is a unique industry. It gives them just a phenomenal perch from which to learn about the technologies of all of our industries, the best management practices of all of our industry. And that's part of the larger Chinese strategy.</s>ROMANS: Bear Stearns would not comment. China has been an aggressive buyer of the world's natural resources. It has sought major technology assets, like the 3Com deal raising alarms in Congress. China has the money to spend thanks to U.S. trade policies that led to record trade deficits. China's war chest of foreign currency has exploded, from just over $200 billion in 2001 to more than $1.4 trillion today. Now, China's economic planners say they want to put those dollars to work.</s>WILLIAM HAWKINS, U.S.  BUSINESS AND INDUSTRY COUNCIL: All of this is being done by the government of China. This is not private enterprise. This is not business as usual. This is the government allocating these, you know, hundreds of billions of dollars for government objectives.</s>ROMANS: China's reserves are rising by at least $10 billion a week this year. Economist McMillon says consider that government-owned Lenovo bought IBM's PC business in 2005 for $1.25 billion. That means China could buy eight such companies every week.</s>ROMANS (on camera): As the dollar declines, there are concerns that China may be tempted to sell off treasury assets, ultimately driving up interest rates in this country. Which such a huge war chest, even that threat gives China incredible leverage over the U.S. economy, Lou.</s>DOBBS: Absolutely. And the idiots, the fools, the morons, whatever you want to call them, that make up the treasury's brain trust, who have been calling upon China to adjust its trade policies and its international financial policies, it may be occurring for them right now that it's time for the United States to make those adjustments.</s>ROMANS: We looked in august at the treasury flows, Lou in Japan and China and Taiwan, the central banks were big sellers of the U.S. treasuries. So it's very clear this is something to watch right now.</s>DOBBS: Christine, thank you very much. Christine Romans. Up next here, blistering new criticism ever Governor Eliot Spitzer's proposal to give away those New York driver's licenses to illegal aliens. I'll be talking with a top New York State senator who is fighting to kill that plan. And disturbing charges that two Former Border patrol agents already betrayed by our justice department are receiving worse treatment in prison than suspected terrorists in Guantanamo Bay. We'll be right back.