The problems keep mounting for AIG CEO Robert Benmosche. Then again, comparing public outrage over financial-crisis-era bonuses to civil-rights era abuses might be expected to stir up strong feelings. Now, a top Democrat is calling for Benmosche's resignation.
A failing AIG famously accepted $173.3 billion in government bailouts during the financial crisis. Its subsequent move to spend $450 million of that money on employee bonuses in the unit behind the company's massive losses drew widespread public scorn. Benmosche, who was not CEO during that time, told the Wall Street Journal in remarks published Monday, that the reaction to that bonus news "was intended to stir public anger, to get everybody out there with their pitch forks and their hangman nooses, and all that – sort of like what we did in the Deep South [decades ago]. And I think it was just as bad and just as wrong."
The comments drew outrage all day Tuesday on social media outlets. On Tuesday afternoon, Rep. Elijah Cummings, the ranking member of the House Committee on Oversight and Government Reform added his voice to the firestorm, demanding that Benmosche step down.
"I find it unbelievably appalling that Mr. Benmosche equates the violent repression of the African-American people with congressional efforts to prevent the waste of taxpayer dollars," said Cummings, D-Md., in a statement.
"If these statements are true, I believe he has demonstrated a fundamental inability to lead this modern global company in a responsible manner — a company that exists today only because it was rescued by the American taxpayers — and that he should resign his position as CEO immediately," Cummings added.
For his part, Benmosche has responded to the controversy with remorse.
"It was a poor choice of words. I never meant to offend anyone by it," he said in a statement emailed to U.S. News.
Benmosche isn't the only one under fire for the quote. The Columbia Journalism Review accused the Journal of "burying the lead" by cutting the quote in question from a Friday story on Benmosche's post-crisis leadership of AIG. The quote instead appeared in a Monday blog post on the site, alongside other snippets from the interview.