Monday, March 16, 2009

Obama Wants Block on AIG Bonuses: More Bank Slut List Drama

Today The New York Times reports that President Barack Obama wants the Treasury chief to try to block AIG bonuses:

“In the last six months, A.I.G. has received substantial sums from the U.S. Treasury,” Mr. Obama said. He added that he had asked Treasury Secretary Timothy F. Geithner “to use that leverage and pursue every single legal avenue to block these bonuses and make the American taxpayers whole.”

In strongly-worded remarks delivered in the White House East Room before small business owners, Mr. Obama called A.I.G. “a corporation that finds itself in financial distress due to recklessness and greed.”

“Under these circumstances, it’s hard to understand how derivative traders at A.I.G. warranted any bonuses at all, much less $165 million in extra pay,” Mr. Obama said. “How do they justify this outrage to the taxpayers who are keeping the company afloat?” (Read full NYT story here)

The paper also offers video from CNBC similar to the CNN video below of the president's speech at the White House today, speaking to small business owners. Obama sounds angry, an emotion you hear rarely in his voice because he has an even mood. However, after calling AIG's bonuses an outrage and clearing a frog in his throat, mildly joked that he was "choked up with anger." I like NYT/CNBC's video more than the CNN clip.

But this is not the first time President Obama has blasted AIG. Prior to his election he said AIG executives should be punished for a spa trip they took after receiving federal bailout money. He said the executives should have been fired and that the Treasury should demand that money back.

And here were are again, the Treasury may have to chase down AIG for this bonus money like financial crime bounty hunters or righteous debt collectors. CNBC reports that the White House may have to swallow the bonuses and add millions to AIG's tab. It quotes an anonymous Treasury official who says the White House may have few legal options to stop AIG shenanigans.

I'm not quite grasping that. Are they saying it's because the money's gone already?

AIG was supposed to pay out the bonuses yesterday, despite the company's poor performance, and some bonus recipients are overseas. The U.S. Treasury is exploring possible repayment plans so the insurance giant is held accountable to American taxpayers.

I've also read that AIG is claiming it can't break contracts in which bonuses were promised. I'm not buying that because I used to be married to a man who got hefty bonuses and it seems to me the company had clauses in those bonus contracts, ways of getting out of those if in the throes of economic death. AIG is in the middle of a fiscal heart attack. Why does it insist on paying bonuses? It's not like they have to fear losing employees. If workers jump ship because they didn't get an extra $150K, where are they going to find jobs in this economy?

I'm not the only person questioning the contracts angle. Pundit Mom, a "recovering" attorney, thinks something's fishy too.

Poor AIG says it has no alternative. Woe to the insurance giant. It's stuck.

Or they're crying wolf.

They're worried about keeping the "best and the brightest?" Well, if the purported best and the brightest got us into our economic mess, maybe we'd all be better off if AIG and the other financial corporations let them go. And if they don't get their millions, what are they going to do, quit? It's not like there are tons of jobs out there at the moment. 600,000 people are losing their jobs every month and I don't think the financial sector is really in a hiring mode at the moment. (Pundit Mom)
New York Atty General Andrew Cuomo is also angry. He wants AIG to disclose the list of its bonus recipients, and gave AIG until 4 p.m. today to hand it over, reports The LA Times. Can we do that, make them reveal the names of private employees who received bonuses? It could be argued "yes" because the Federal Government is feeding enough money to AIG to claim interest in the company. It might be educational to see who walked away with millions and what they did to earn that money.

Yesterday I posted on American International Group, AIG, and its slut list of counterparties as well as its controversial multi-million $$$ bonuses to employees. I wrote the following:

I wish we'd cut this BS and someone would explain our money crisis in base terms like sluts, whores, pimps, and suckers. It might make it easier to keep score and for us to see who needs a break and who needs an ass whuppin' followed by some alone time in a jail cell. I bet a street hustler could break this financial mess down just right. (VP)
The comments on that post are indicative how angry Americans are over AIG's abuse of tax payer dollars/bailout money.

1 comment:

underOvr (aka The U) said...

There's BS and then there's AIG! So those taxpaying citizens with brains need to understand that a company which has received US Government welfare stipends because of "poor management decisions, excessive greed AND THEY DIDN'T HAVE ANY CAPITAL TO CONTINUE EXISTING AS A CORPORATION" want to reward staff hierarchy with $160 million?

If I'm not mistaken, this is not money they've earned, so they are being rewarded for failure? And the leverage they have is that "America needs AIG to be solvent?" Why? They aren't solvent if they continue employing the same corporate philosophy which brought them to bankruptcy.

What's worse for this country:
A company that doesn't understand how to responsibly run a business propped up by taxpayer dollars (ala Humpty Dumpty)? or
A company that is allowed to fail, flush itself down the drain and no longer suck taxpayer money like the leech it is?

I say, "get whatever funds remain that the government has given AIG and let them fail." I don't see how we could be any worse off without them.