President Obama to Bailed-Out AIG: I Will Pursue 'Every Single Legal Avenue to Block These Bonuses'
By Helen Kennedy
DAILY NEWS STAFF WRITER
Bonus-hungry AIG execs came under withering fire from all sides Monday as President Obama vowed to stop their payouts and New York Attorney General Andrew Cuomo demanded to know who got what and why.
Cuomo gave the company until 4 p.m. to cough up a list - or face subpoenas.
"Covering up the details of these payments breeds further cynicism and distrust in our already shaken financial system," Cuomo wrote in a letter to AIG CEO Edward Liddy.
Cuomo demanded a list of all executives at AIG Financial Products getting bonuses; a description of each individual's job description and performance; copies of whatever contracts AIG says obligates them to make the payments; and a list of who negotiated the contracts.
"We owe it to the taxpayers to take every possible action to stop unwarranted bonus payments to those who caused the AIG meltdown in the first place."
Meanwhile in Washington, President Obama joined the chorus of outrage at AIG - which taxpayers have bailed out to the tune of $170 billion - for promising $450 million in bonuses to the same division that brought the company down.
"This is 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 AIG warranted any bonuses, much less $165 million," Obama told reporters.
"How do they justify this outrage?"
Obama said he asked Treasury Secretary Tim Geithner to "pursue every single legal avenue to block these bonuses."
AIG says it is obligated to pay out the money, originally designed to keep talent from jumping ship, because the contracts were signed before the bottom fell out.
Critics said the executives at AIG's Financial Products unit, who were clearly not all that talented because it was their reckless bets that kneecapped the firm, would be getting zero if the taxpayers had let AIG die.
"AIG's arguments are absurd on their face," former Clinton administration Labor Secretary Robert Reich said on his blog.
"Had AIG gone into chapter 11 bankruptcy or been liquidated, as it would have without government aid, no bonuses would ever be paid; indeed, AIG's executives would have long ago been on the street."
Reader Comments
AIG Bonuses
At a time when unemployment, bankruptcies, and foreclosers are the norm for the average American, the AIG fiasco is a major blow. Although I am one of the lucky ones to still have a job and a home, my company is asking the employees to volunteer for either an alternating temporary time off without pay or to volunteer to take a voluntary cut in pay to help prevent layoffs. Either measure would probably guarantee my family joining the above statistics.
I had looked foreward to an early retirement this year and now I can not afford it. My 401K has been cut in half with stock market losses. At my age, I can not recoup this back. My wife is disabled and a high medical expense. My daughter and Grandchildren need our help just to keep food on their table.
This is the tale of just another average American trying their best to keep the status quo while the rich get richer.
This is just another example of why the goverment does not belong in big buisness. When will they learn?
AIG
Obama is just blustering -- again. He and his Treasury Secretary knew about these bonuses BEFORE the bailout -- and proceeded anyway, withholding bonus information from the public.
But Congress is not to be excused in this handout fiasco, either. Our elected officials were so quick to rush forward with the handout money -- they made sure no one knew who was getting what, or that no controls were in place to ensure the bailout funds would be properly utilized.
A nation of sheep has come forward again -- and we have been duly shorn by Congress and the carpetbaggers at AIG, FannieMae, and FreddieMac. Doesn't it make all of us feel good to know while we are all struggling with the current financial crisis, the losers at AIG will be getting rich(er) with their exhorbitant bonuses.
Criminal prosecution? Don't make me laugh. If anyone should be prosecuted, it should be our elected officials who have run our financial ship aground. Barney Frank should be the first one indicted!
Public Relations Faux Pas
Like most everyone else, I don't know the facts behind the bonus payments, but AIG is certainly guilty of a massive public relations fiasco at the very least. If anything illegal has been done, or if AIG violated the terms of the "bailout", then let the guilty be brought to justice, or appropriate damages be awarded after due process procedures are followed.
As a sidelight, it seems to me that another problem is highlighted here, and that is that we have politicians trying to run businesses when they have never managed or run anything other than constant campaigns for reelection. When politicians posture, our cynical natures should be on alert.
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