Word: aig
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...began the embattled Geithner, "that there is considerable outrage in the Senate, as there is throughout the country, about the bonuses." Indeed, outrage was the theme of politician, pundit and President of the United States at each new revelation about the bonuses paid out of federal bailout money to AIG executives. There was so much outrage, in fact, that furious red overtook St. Patrick's green as the color of the day. But in the end, what were the outraged - as well as the hapless Geithner - going to do about it? (See 25 people to blame for the financial crisis...
...suggestions managed to emerge from the sea of anger, though it remains to be seen how feasible any of them are. Senator Evan Bayh, an Indiana Democrat, said he'd like AIG to enter some form of bankruptcy, "because when you go into bankruptcy, contracts are abrogated all the time." He was referring to AIG CEO Edward Liddy's claim that the bonuses were contractual and therefore had to be paid under the law. (See the top 10 bankruptcies...
...have been overcompensation, so to speak, on Dodd's part. The National Republican Senatorial Committee was quick to point out that Dodd had amended the stimulus plan to make a specific "exception for contractually obligated bonuses agreed on before Feb. 11, 2009." That exception gives cover to the AIG bonuses - though it should be noted, as Dodd's aides do, that the Senator did not know about the AIG bonuses at the time the bill was being drafted. (Dodd is facing a tough re-election battle next year in Connecticut. He was the largest recipient, at $103,100, of AIG...
...Congressman Gary Peters of Michigan was circulating a similarly confiscatory levy. But House Banking Committee chairman Barney Frank was not about to be bothered with such legislative niceties. He pointed out that the U.S. government - after pledging more than $150 billion in aid to the company - owns 79.9% of AIG. He told reporters, "I think the time has come to exercise our ownership rights. We own most of the company. And then say, as owner, 'No, I'm not paying you the bonus. You didn't perform. You didn't live up to this contract.'" (See how financial madness took...
Judicial options were raised outside the Beltway. As he announced that AIG had paid so-called retention bonuses of $1 million or more to 73 employees, including 11 who no longer work there, New York Attorney General Andrew Cuomo questioned the validity of the contracts that guaranteed those payouts. He said the agreements were made in March 2008 to duplicate employees' 2007 bonuses "despite obvious signs that 2008 performance would be disastrous." (To further fuel the outrage, Cuomo added that the top individual AIG bonus was more than $6.4 million, while the top 10 collected a total of $42 million...