Chicago Sun-Times
The scoop from Washington

AIG bonuses are "outrageous" Larry Summers tells ABC's Stephanopoulos. But can't stop the payments.

| 62 Comments

WASHINGTON--The Obama economic team is booked on the Sunday shows as the White House continues a multi-front publicity push to hold public support for the administration's economic rescue plans. The White House, however is on the defensive-- tried and failed to stop the taxpayer bailed out (too big to fail) AIG from awarding bonunes to top executives.

"There are a lot of terrible things that have happened in the last 18 months, but what's happened at AIG is the most outrageous," said Larry Summers, chairman of the White House National Economic Council, during an appearance on "This Week with George Stephanopoulos."

"What that company did, the way it was not regulated, the way no one was watching, what's proved necessary, it is outrageous," Summers said.

"There are a lot of terrible things that have happened in the last 18 months, but what's happened at AIG is the most outrageous," said Summers, chairman of the White House National Economic Council, during an appearance on "This Week" on Sunday.

"What that company did, the way it was not regulated, the way no one was watching, what's proved necessary, it is outrageous," Summers said.

In a phone call Wednesday to AIG CEO Edward Liddy, Treasury Secretary Timothy Geithner said it was unacceptable for the company to give out tens of millions of dollars in bonuses for senior executives after the government committed $170-billion to keep the struggling company afloat -- far more government bailout money than has been awarded to any other firm.

In a letter to Geithner Saturday, AIG's chairman and CEO agreed to restructure some of the payments. But Liddy wrote, "quite frankly, AIG's hands are tied," arguing the firm would risk a lawsuit if it scrapped the bonuses.

Liddy also wrote the government's demands could affect AIG's ability to retain "the best and brightest talent to lead and staff the AIG businesses" if "employees believe that their compensation is subject to continued and arbitrary adjustment by the U.S. Treasury."

Summers argued today that the Obama administration has sought to limit the AIG bonuses.
"We are a country of law. There are contracts. The government cannot just abrogate contracts. Every legal step possible to limit those bonuses is being taken by Secretary Geithner and by the Federal Reserve system," Summer said.

"What the Obama administration has done, based on the advice of attorneys, is done everything that it can to, within the law and within the tradition of upholding law that we have in this country, to limit these bonuses. And they have, as a result of Secretary Geithner's efforts, been scaled back," he said.

--George Stephanopoulos
March 15, 2009 in This Week with George Stephanopoulos | Permalink

62 Comments

The Obama team really sounds like a pathetic group of freshman economics students. After the G-20 meeting, there may be no one in the world (save US federal, state and local employees and union members) who think they have a clue about the current financial crisis (just a tracking poll), let alone how it may be fixed. Obamaland is stuck in campaign mode totally fixated on rewarding friends and punishing enemies. The big benefactor so far in the polls is Congress-- no wonder Pelosi wants a jet the size of Air Force 1.

If the Administration cannot stop the bonus payments, then I suggest a swift tax initiative that takes 50-75% of all bonus money paid to companies that accept government money. Just tax the heck out of these greedy thieves.

If AIG had the best and the brightest they would not be on the dole from we taxpayers. Big business connot get this bonus cancer for doing a poor job out of their system.

Where is the Justice Department on the questionable, illegal?, activities of AIG? I demand an investigation? Now get on with it. I am a sweet old lady in Texas!

It's so damn simple: Bonuses need to work both ways. If AIG loses tens of milions of dollars, then AIG execs need to make good on it. Bill 'em. Make them give back all previous bonuses until the losses are covered. Retention bonuses? If these bright boys keep driving the world economic system into backruptcy hades, let us stop retaining them now!

If the "best and brightest" lead to these problems, scrap the bonuses and opt for the "worst and dimmest".

they are so out of touch on how the poeple really live

you know i would do the job for 100k and no bonus

If the AIG bonuses cannot be recovered, then recover the same amount from the AIG bailouts. That should produce action from the CEO.

Let me get this straight... Liddy and his "best and brightest talent" were unable to keep the company from amassing billions in debt, yet somehow they are to be rewarded for failure? The mind boggles at this, as does Liddy's pathetic defense of the payments.

I honestly dont understand why the hell they pay the bonus. Simple..renogotiate the agreement signed whether you need the job or bonus. If the federal govt has not paid the aid how could this so called top creamy employees will get monthly salary. In this tough economic situation with the bonys money they could have created /retained out of 165 million $ another 1650 jobs in AIG for an year.

Honestly this is called as corporate greediness. Rewarding people who caused the collapse. Washington has to fix it.

You got to be kidding! If they didn't get the bail out and went out of business what kind of bonus would they have got.
Keep what top executives! The ones that ran the company in the ground!
I hear the only reason they got so much money is because government pensions are at stake.

I hate how the media demonizes the "bonus" payouts. I suspect that most of this bonus money is much closer to salary than is being suggested. The majority probably goes to people who did do their jobs, like call center employees, or sales people. These folks had nothing to do with mortgage backed securities and credit default swaps. Telling these employees that they aren't going to get bonuses is a sure fire way to guarantee that they all leave the company, destroying any possibility of an AIG recovery. Our country is in a shambles right now and for all the rhetoric I have not heard of a single member of congress waiving their salary.

I think its time corporate executives thought more about the responsibility that comes with being "the best and the brighted" rather than their own remuneration. If they pull the company out and make it a successful and stable company they should get bonuses....but not now.

Sadly, it is impossible to judge AIG's bonuses to senior executives as outrageous relative to the contemporary global capitalism founded on financial and business practices that lack any real substance or ethic of conduct. Ponzi (pyramid) schemes perpetrated with the esotericism of bankers, brookers and businessmen have become the norm. As this system is well-based on precedents, the cycles of prosperous and desperate times, consuming countless innocents along the way, will continue with ever increasing frequency, irrespective of the new administration's best 'intentions'!

This is beyond criminal. If AIG were allowed to go bankrupt, would they still be obligated to pay those bonuses? Those folks should just be happy they have jobs at the moment. Everyone who gets a check should have their name and photo posted on an official "Bailout Wall of Shame". Put them right up there with the Merrill Lynch thieves.

So other people volunteer cutbacks, loose jobs and still pay taxes to help support the company they work for, and they the people getting the bonuses don't feel they should help the people whose backs they are breaking!!! That should be a given to just get the bonus when you get the company back on its own two feet!! This is why people don;t agree with bailouts and the ramifications will get nasty if something is not done!!

As one person who won't impact a company like AIG very much, I am sure my opinion on their bonus payouts will mean very little. My family works very hard to earn our way. We believe in bonuses as a way to reward good work in times of prosperity, to share in good fortune, and recognize allegiance and extra efforts for jobs well done. Our hard earned income helps to support a $170 billion dollar bailout to AIG that our government deemed important. This bailout comes at a sacrifice not only to our generation, but to our children's generation. We are borrowing from our children and grandchildren to bailout companies who have relied on greed and risky practices to end up in the positions they are in. How can they live with the choice to accept a bailout while rewarding employees whose choices, in many ways, caused the economic crisis we now face? To me, it is unconscionable. I would have risked the lawsuits and let a wise arbitrator let you all know what you can do with your contracts. If there is such a thing as Kharma, let it show itself to the recipients of those bonuses. I will never dirty my own hands with any business or subsidiary run by AIG.


""What the Obama administration has done, based on the advice of attorneys, is done everything that it can to, within the law and within the tradition of upholding law that we have in this country, to limit these bonuses"...ahh no, surely it was quite legal to let AIG go very deservedly broke, then there would be no bonuses paid!

You have got to be kidding... after being responsible for the misguided leadership at AIG and the BILLIONS of dollars it will cost tax payers to bail them out, we now need to suplement their tens-of-million dollar BONUS plan so these executives don't leave AIG and Mr. Libby can use them to figure out what they did WRONG? Are their "contracts" not written around performance or is it just based on attendance? I can't imagine what you would need to do to NOT recieve a bonus. If after a $170-BILLION of TARP, Tax Payer, funded money is required to bail this company and the American economy out, what would warent a poor performance to get these theives out of their contracts? I say let's roll the dice, spend few more bucks to correct this BUT let Liddy and his "best and brightest staff" go packing.

My ass sure hurts.
Because me and every other taxpayer in this country have just been raped.

Let me get this straight, AIG is afraid of being sued if they don't give their employees bonuses? Give me a flippin' break! Let 'em sue - and take back the taxpayers' money. No bailouts for this company; it deserves to fail - NOW.

Take back the $170 billion, then let them pay these idiot bonuses. I am no lawyer, but seems easy way to fix. No money, no bonus. Is our goverement lawyers this stupid? Please don;t allow this obsurity. Next step for me; turn democratic, pay taxes only when run for public office.

JUST LET THESE COMPANIES FAIL! It just is ludicrous for us to all believe that they must reward and keep the "Brightest Minds" who have led these companies into historical losses with tax payer supplied bonuses. Let them go bankrupt which will resolve the contract issues, restructure and regulate, then move on.
You know the tax payer is getting really sick and tired of paying for these executives who have failed at keeping their businesses running profitably and who have acted for their own greed. Meanwhile these same tax payers can't afford their health care, are worried about just paying for groceries, and keeping their jobs while these guys are getting millions in bonuses on top of their fat paychecks. Maybe, just maybe, they will have to downsize their lifestyles like the rest of us have had to do. It is called basic accountability to our country and it's citizens!
Buck up and let them fail. America has lots of talent who will be accountable and have morals who will take these executive's place.

Awww, poor babies. AIG really doesn't want to pay those bonuses, but they HAVE to. The government doesn't want to bail out this failing company but we HAVE to.

Or else!

So now the government (i.e. we the people) are being held at gunpoint. AIG says, "You HAVE to bail us out, or else!" The banking industry says, "You HAVE to bail us out, or else!" The automotive industry says, "You HAVE to bail us out, or else!" And our leaders are allowing that to happen. Larry Summers says that horrible consequences will happen if we don't, but he fails to explain exactly what those horrible consequences actually are.

I say - tough. If the poorly run industries want our help then they play by our rules. And if that isn't good enough then close your damn doors and we'll just see how bad it is. I suspect the 'horrible consequences' won't happen. I say let's call their bluff. Betchya these companies will mysteriously and magically be able to stabilize themselves just fine.

I think the only way to really stop this nonesense is to BOYCOT AIG unless they announce the cancelation of the bonuses.

And if AIG needs to plunge out of the toilet, then let it be.

It's a shame for the american people to not do anything about this and just sit and watch how the very same people who played major role in bringing the economy to this stage, are getting even richer - on our expense!!!

No more money for AIG until they renegotiate all bonus contracts to zero. How hard can it be? AIG people can either agree and sign the modified bonus contracts, or take their places in the jobless lines.

I used to work at Allstate while Ed Liddy was the CEO there. Every year the execs would donate something for the charity auction. Mr Liddy donated a whole case of 1988 baseball cards which at the time were pretty much worthless (and continue to be worthless). The charity auction sheet listed the baseballcards at an estimated value of $600. Being an avid baseball card collector, I knew that even the book value was at best $150. It struck me as odd that someone making millions would go out of their way to donate something worthless in order to get a few hundred dollard off their tax bill. What concerned me even more is that it was obvious Mr Liddy was hoarding this whole case of baseballcards (each case contains 20 complete sets) as an investment and when it didn't go his way he decided to unload it at the charity auction for an inflated value.

Every concerned American should email AIG at AIG.com, in the contact us section. Let's send them a message.
Below is my email:
You people are disgusting!! Your employees do not need a bonus. We, the American Working People of America, have not gotten bonuses this year. We have lost hours, benefits and money. We are told that we should be happy that we have a job! That is the New American way! Be happy that you have income coming in.
You are greedy "little" people who need to be held accountable.
No one is bailing us out. You are a disgrace to America!!!!!!

Let's get serious. Check the emotions at the door. We have the power to change but hissing,moaning, and blaming others is wasting time.

Ref the bonuses AIG (and other benefactors of bailout money)...What would happen if we just pulled all the bailout money out of businesses that continued to pay out bonuses despite past failures? We may not be able to legally stop the bonuses but we can deny them taxpayer dollars (I think). We should consider worst case, best case, and most probable; pose these options to the Tax Payers and let them choose. Whatever happened it will be painful on all.

On the rest of this econ meltdown: It wasn't too long ago that we heard how avg Joes and Janes were playing a risky form of musical chairs with OPM (other people's money) - hedging their bets, borrowing money, buying property they could not afford with the intent to flip and make a quick buck. When the music stopped, lots of folks were left without a chair. I was nearly one of them. Had it not been for an act of God (and a dishonest Broker) my family would be facing financial hardship.

Until we avg tax payers take ownership of the crisis we're in, elect repesentatives that are willing to do what is right, and only do business with companies that self-police their integrity, we'll continue to play the blame game and not move forward. I'm willing to pitch in and do my part to get the econony back on track and endure the pain...are you?

How much sense does it make to give a company billions of dollars just to lose billions of dollars? Just let the chips fall where they may, let AIG fail now. Give the taxpayers their money back!!

Mark H, you are incorrect. A Reuters story today reported that half of the bonus money would go to the unit of AIG that did sell the credit default swaps. Additionally, all they have been doing after the bailouts is make payouts to the companies that bought the protection. What's so hard about giving out taxpayer money? I don't buy the "best and the brightest" arguments. Wall Street will fight like heck to preserve their inordinate compensation, despite the fact that they are not the real economy of this nation. In fact they have almost destroyed the real economy.

I am Japanese businessman living in Tokyo.
I was again so surprised to find what a BIG MIND American Tax payers still have !
Based on American Value, AIG Executives seem to be still
"The best and brightest talent" .
What an easy GOING Country !!!
What a happy-go-lucky GUYS !!!!
Really, really envy from my heart !!!!
Please let me know how to immigrate to your PARADISE !!!

Were compensation packages negotiated in early 2008 with full disclosure of the financial status of the ruinous instruments contracted by AIG Financial Sevices? Was information withheld, accounting fraud used, status obscured and if so to whom was this provided? If these employee contract payments were based upon fraud (as the investments have been going bad for quiet some time) they are null and void. If officers and/or directors were making these payments with full knowledge they are part of it. This needs to be determined before the taxpayers money disappears.

We are a nation of sentimental slobs. It's time to jettison large conglomerates & start over. This is a perfect opportunity, otherwise we are the perennial chumps.

A few questions:

Why are the contracts with AIG execs more valid than the contracts between the automakers and autoworkers? Congress INSISTED that the autoworkers take pay cuts -- and MODIFY THE CONTRACTS they had negotiated -- before the automakers got federal money?

If the bonuses are pay for performance, how can AIG be contractually obligated to pay now, given last quater's $60 billion loss?

How many teachers could be hired with the $165 million in bonus payments?

If the federal government owns 80% of AIG, what control do we have over the actions of management?

Why does Liddy think the government's actions to limit compensation are arbitrary??

This is sick. Why in the world are we helping these companies that keep sending millions to people who do not know how to run a company? They cry yet get paid millions on the "average joes" taxes. Furthermore, I fear this is just the tip of the iceberg. Look what Enterprise rent-a-car did to get bailout funds:

http://www.butasforme.com/2009/02/25/alert-enterprise-rent-a-car-may-have-fired-employees-as-fake-evidence-when-lobbing-for-bailout-money/

OK, OK lets get real here. This is the good ol-boy network at it's best. How stupid do these people think we americans are? The best and the brightest - (come on).
I would like to know the name of every person I helped get a bonus, how much it was and how long was that person with the AIG. We are looking for transparency here right?
I would also like to know if this person continues to work for AIG?
If the person does, is there another contract in place that provides this person $$$$ for under-achievment. If so how much - we are looking for tranparency right? Well how much is this person going to take from us again??
I can't tell you how this makes me feel because there is no word that can dicribe what I feel or how it affects me. All I know is that who ever thses people are they must have a personal satis faction to know they sucessefuly pulled off (legally) the best Madoff scheme of the day.
THE BEST and the BRIGHTEST - (COME ON)!!!

Our elected officials must all be idiots.

Taxpayers are laying out hundreds of billions of dollars, you would think that the least our elected officials could do is to pass legislation which states;

" If your company has been so poorly run that you need taxpayer dollars to stay in business, then until every dime of the money is repaid, no executive will receive any form of raises or bonuses."

Instead, our elected officials are so eager to spend, spend, spend, they pass out bailout funds with virtually no limits or restrictions on salaries or bonuses. Only after bailout money is misspent do our elected officials feign outrage, and then only to make a show to appease the public.

If they were truly outraged, they would have had the common sense to place clear restrictions on how bailout money may be used, and force the companies that need these funds to do whatever they have to do to comply with the no raise or bonus requirement.

Our country is being run by people as stupid as the executives they are sending bailout funds to.

The Obama administration should pull out all the stops to make these compensations not happen. Where would this money be if AIG was chapter 13 or 11.
They did bad business, and these CEOs are lucky to be employed.

So here I am your basic hard working American. I live a conservative lifestyle even though banks "were" giving money away to all who were able to show they still breathed on a daily basis. I drive used cars that I own even though Detroit could put me in a new one no income needed. Now let me be a small business and run it like AIG and I would be in court. But no in this country the inability to be competitive is rewarded. Build second rate cars we will bail you out. Over state your business abilities we will bail you out. Lie about your credit worthiness we will bail you out. Unless your the average guy who has done the right things, then we will be in your pocket for the lairs, cheaters, and untrustworthy ilk standing in line waiting for my hard earned money. We should not be rewarding failure. Build a better business plan, a better automobile, a better credit system, don't reward those who have demonstrated that could not do it right the first time, or the hundredth time.

I think every company that took the government's bailout money paid bonuses to their employees. Same old game on Wall Street---fire a ton of people so you can give bonuses to your buddies who remain.
Even CIT Group paid bonuses and they have had SEVEN consecutive quarterly losses!!

Obama needs a good trial lawyer. I recommend John Edwards.
Do you remember what John Edwards said?
"You have to take them on!!!!"
Watch:
http://www.youtube.com/watch?v=bi3_CCLv4No

I was within months of retiring and now I will probably not be able to retire at all because of the misdeeds of corporations like "aig" and their corrupt executives. This corporate greed has gone on far to long! I live within the ranges of the middle class and am able to enjoy a reasonable lifestyle, so why do should cexecutives have to have a pay scale that is over 400 times what I work for. After all, we both put our pants on one leg at a time. Why dont you man up and return the outrageous bonuses you received. It is criminal the way the envelope is pushed just to see to see how much can be gotten away with.

Most AIG employees work for the insurance subsidiaries; companies that had NOTHING to do with credit default swaps. These employees had NO idea what was going on in AIG Financial Products and didn't get any bonuses from the "good times" at FP. We won't get our money back from AIG unless the insurance companies succeed and the only way this happens is if the senior managers at these insurance companies (who were probably paid in stock which are now worth pennies) are retained. The insurance subsdiaries are profitable and haven't taken taxpayer dollars (check the financials yourself)

Make an example of these bastards and imprison them. We're to believe they've done nothing wrong; and that all we can do is throw more money at them? There's a lot going on here that obviously congress doesn't want brought out. They have no doubt benefitted greatly financially from this whole fiasco and are afraid of being tarred by the same brush. We do need to really delve into this - "Let's not point fingers" - bullshit! Let's point fingers and put them all where they belong.

the best and the brightest...what a joke! more like the filthy and the greedest

This is a sad state for Americans, and when are we going to wake up and take back our country, nothing that a new president or congress can do to make this right now, we need to do it ourselves, tell us who these people are that are getting the millions while the rest of us suffer, and we will take care of it the American way.

...."the best and brightest talent to lead and staff the AIG businesses". I agree with Jon Stewart...you DON'T HAVE the best and the brightest. If these are the "best and brightest" you could find....I worry about the future of our country. sigh.

Now can we stop bailing out AIG? If Liddy continues to insist that the "best and brightest" need to be retained and to use the excuse that AIG is too big to fail and could face lawsuits if contracts aren't honored, then he is clueless. AIG is the poster child for unethical behavior and deserves to fail. Those bonuses were not earned for good performance - that money was taken out of the pockets of hard working Americans.

Accepting those bonuses is a slap in the face of all American taxpayers.

While it may not be great PR, AIG is playing their remaining cards well. The timing and the amount of the bonuses boils down to two things. Game Theory and Tax Law. In order to stay competive with other companies they had pay comparable bonuses to their executives to retain any remaining talent on their payroll. Although, they may have announced these bonuses at the end of 2008, they waited until the last day that they could pay the bonuses to still receive a deduction for the bonuses on their 2008 tax return. Simply put, in U.S. tax law, March 15th is the last day to pay accrued bonuses and still receive a deduction on the previous year's tax return. This strategy allowed AIG to pay $165 million in bonuses, at a cost of only $107.5 million to the company after tax savings of $57.75 million (at 35%). Well done AIG.

So sad. How can these executives justify this. They say they are going under and than take taxpayer money to pay themselves overwhelming bonus's. Steve Jobs turned his company around for $1.00 his first year back in the saddle, and look where Apple is now. These guys are crooked and greedy. How can they have a conscience while many American's are losing there entire life savings. Why do these executives need a $1,000,000 or more in bonus's. A bonus is based on performance. Screaming lawsuit is crying wolf. This is a joke. The Government should take back their bailout money. The same thing happened at Merrill Lynch, the executives hoarded all their cash for themselves as bonuses and left nothing for their investors before being bought out by BofA and then to be rescued by the Government. I wish I could get a free 1,000,000 hand out from our government.

This is unbelievable.

AIG has recently named the names of those companies which received chunks of its bailout money. Now the American public should demand that AIG name the recipients of these undeserved bonuses. Let the "best and the brightest" be shamed for their greed and pressured to give the money back. Without taxpayer money AIG would not be in business, and their bonuses would not exist either.

The entire rationale propounded by Wall Street that they must pay special bonuses to retain talent and that it is "too late" to revoke those bonuses is entirely specious.

For one thing, the rationale represents the most egregious double standard, as best exemplified by this example:

imagine if a gold mining company (Golddigger Inc) were losing hundreds of millions of dollars. Now imagine that the chief executive announced to Wall Street that the exploration arm of the company actually did outstanding work, finding all variety of new gold reserves, even though the mining operation side of the company was a disaster. However, given that the exploration team performed so well, and given that Golddigger inc. did not want to lose any geologist talent, the CEO announces that Golddigger will award 100 million dollars in bonuses to the exploration side of the company.

I can promise you that the chief Wall Street analysts (at Merrill, Goldman, JP Morgan, etc) would SCREAM BLOODY FURY AND INDIGNATION at the idea that such a money-losing gold mining company would award bonuses. They would downgrade that gold miner and urge STRONG SELL at the top of their lungs. They would crap all over that gold miner and urge institutions to dump that gold miner's stock.

Why is a Wall Street financial firm that is losing tons of money allowed to reward a certain segment of its company, while no other corporation you can name in any other economic sector is allowed such a privilege? What is so special about these Wall Street executives or traders that they are exempt from the logic that says if a company lost money, then key employees should not only be precluded from receiving bonuses but they should also face the strong likelihood of losing their jobs? Who determined that these Wall Street principals are to be granted employment in perpetuity and worse yet, no matter how dismal the performance, certain members are to granted gargantuan bonuses?

The fact is that this argument that the bonuses are irrevocable is entirely preposterous. These companies are now de facto government entities and where the government is concerned, there is NO statute of limitations for revoking anything. For example, the government can look into an individual's tax returns going back decades, if it chooses, and they can determine that a ruling about a tax return made many years ago is invalid, and the government can revoke that decision, then force payment of penalties and interest accumulated over the years. Analogously the government has the same rights to examine contracts that its de facto employees at AIG have made and revoke the terms, in the manner that any government using powers of eminent domain can seize assets it deems to be vital to the national interest.

It is far past time for an Elliot Ness kind of prosecutor with maximum integrity to be appointed and to begin serving process on most of the Wall Street partners for purposes of expunging the flagrant corruption in this particular economic sector. It is not enough to pursue merely the current year's bonuses, rather just as a government tax authority can look into an individual's tax returns going back years, it is imperative that the government examine at least the past 10 years of extraordinary bonuses provided to Wall Street firms, especially given that it is now evident those bonuses often were based upon specious profits, concocted via the use of "phony" financial derivative instruments. The government should be seeking to disgorge such false profits in order to mitigate the burden upon the taxpayer. For example, in 2006, a bonus pool of 15 billion dollars was awarded to 200 Goldman Sachs partners, and the disgorgement of those monies would go a long way to easing the tax burden upon US citizens.

If necessary, the service of process should extend to complicit politicos, regulators, Big Media proxies, and if necessary, members of the judiciary itself. Until this rampant overt corruption is addressed, then America will fall, because history shows that all Empires have fallen when corruption spreads through the highest echelons of the Establishment. Such corruptions sows the seeds of cynicism and despair, and once a fire of corruption is lit in the highest offices of the land, it will spread into every corner of the nation.

I don't know why anybody is surprised that AIG continues to behave improperly.

The major problem is that the politicians are acting on behalf of the AIG execs, NOT the public.

For example, when that first 85 billion dollar injection was made into the company, in theory, the entire equity of AIG should have been wiped out and the whole company should have been handed to the US taxpayer. That is what would have occurred with any other company receiving that kind of massive funds injection.

But such was not the case, instead, only EIGHTY percent of the corporation was turned over to the US taxpayer.

Reason?

By allowing AIG shareholders to keep 20% of the company, then the company's major holders were able to sell stock and still preserve centi-millions of net worth.

For example, within ONE week of the AIG bail-out, the former honcho, Maurice Greenberg, sold more than ONE HUNDRED MILLION dollars of stock. Feel free to google this disclosure if you have any doubts. In other words, YOUR taxpayer monies were used to "save" the estates of certain key AIG shareholders, your taxpayer monies went directly into the pockets of AIG figures like Greenberg.

Only the most corrupt politicos would have approved those terms and allowed a key figure like Greenberg to walk away with more than 100 million dollars of YOUR money.

Time to prosecute not merely the key figures at AIG, notably Greenberg, but the various politicos who aided and abetted this theft of the US Treasury on behalf of these felons.

AIG no mater how big they are, they are just another company and should be looked at like any other company that has mis-manged their affairs. For any advancement of this company should fire their management and re-group or shut down and move into a failed company status and allowed to die.

Why is it OK to run your company into the ground based on bad decision making (in this case greed) and then accept my tax dollars to keep the company afloat. Then to add insult to injury, you pay bonuses to workers. In the real world, if a company does not make a profit or loses money bonuses are not paid. This argument that AIG needs to pay bonuses to keep their talent is a joke? It is that talent that wrecked AIG in the first place. It is time that we stand up for ourselves as we are being taken for a ride.

Mr. President-

If we cannot get the companies to give bailout money back then why not introduce a new tax form taxing all the bonus money handed out to companies that have received bailouts at around 80% with no chance at deductions minimizing this tax? That way it is free and clear of any contract completed under company policy. This would probably turn a few heads at AIG and other places.We can give but we can also take away....when the gift is abused.

Sincerely,


Amy DeDominicis
253-272-4598

While I understand the need to assist AIG due to a domino effect in the economy, this company is aggrogant. They are thumbing their noses at the U.S. taxpayers. I commend Mr. Liddy for his help but he should not have approved giving the bonuses out. The employees who received the bonuses for running the company would not have received a dime, had they gone bankrupt, which they are since we had to bail them out, they would not have gotten anything. Let them sue for the bonuses. No jury made of average Americans would give them a dime.

Is this a joke? Larry Summers talking about AIG's bonuses being outrageous is the epitome of "the pot calling the kettle black!" He must think everyone in the U.S. is stupid, out of touch, or at least has a bad memory. Well, some of us aren't, and don't!

It's a fact that Larry Summers is responsible for dismantling the Glass- Steagall Act (in 1999). It was an act of congress passed in 1933 that prohibited commercial banks from collaborating with full-service brokerage firms or participating in investment banking activities. Put simply, Larry dismantled the regulation that would have prevented the recent banking fraud we've seen in the U.S. (Madoff wouldn't have been!). which has led to our financial crisis.

It's also a fact that Ram Emanuel engineered the recent bank bailouts. And all of the companies that the Fed bailed out (thus far), don't have to answer to any authority regarding how they spend those funds. Sure, Obama passed a new Executive Order to start regulating the bailed out companies, but that only applies to future bailouts, not those already issued. And if AIG receives another bailout, they can still do as they please, because all of the major banking & brokerage firms are exempt from any regulation! (they all were from the start)

Yes, you read that correctly!

Unbelievable isn't it? But, they're just plain old facts!

So, let's get this straight. Obama's financial team is bad mouthing the very same monster that they've been feeding. Sounds like damage control to me!


God, help us!

p.s. Geitner, had a role in this too. But what else could we expect from a Larry Summers protege and former chairman of the Federal Reserve?

"The greed of this land will be the fall of this land." A wise saying.

"The greed of this land will be the fall of this land." A wise saying.

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Lynn Sweet

Lynn Sweet is a columnist and the Washington Bureau Chief for the Chicago Sun-Times.

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This page contains a single entry by Lynn Sweet published on March 15, 2009 8:21 AM.

Obama adding food safety to his plate was the previous entry in this blog.

White House chief economist Christina Romer tells David Gregory on NBC's "Meet the Press" go out and buy that car is the next entry in this blog.

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