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| Treasury to rework AIG aid to recoup bonuses |
| 2009-03-18 |
| The U.S. government will modify a planned $30 billion capital injection for American International Group Inc to try to recoup hundreds of millions of dollars in controversial bonuses, a Treasury official said on Monday. Meanwhile, New York's top legal officer vowed to take AIG to court if it did not provide full details of the bonus payments. The U.S. government's actions came after President Barack Obama expressed "outrage" on Monday over the bonuses to AIG employees, and ordered officials to take all legal measures to block them. The Treasury Department plans to attach new provisions to the terms of its latest AIG rescue package, announced on March 2, to force repayment of the bonuses, said the official, speaking on condition of anonymity. Meanwhile, New York Attorney General Andrew Cuomo said he will subpoena the insurer for more information, including the names of those enriched by the bonuses, as taxpayers continue to pour billions of dollars into the insurer. Obama said in remarks at the White House he was "choked up with anger" over the executive payments, which is a hot button issue in the deepening recession. "How do they justify this outrage to the taxpayers who are keeping the company afloat?," said Obama. The U.S. government has spent up to $180 billion in taxpayer money to bail out AIG, and the insurance giant continues to bleed red ink. AIG said on Saturday its hands were tied contractually over $165 million in bonuses due to AIG employees on Sunday. Cuomo told reporters on a conference call on Monday that he believed the bonus payments were paid last Friday. Chief Executive Edward Liddy told U.S. Treasury Secretary Timothy Geithner in a letter on Saturday the insurer was legally obligated to make 2008 employee retention payments, but had agreed to revamp its system for future bonuses after the Obama administration objected. On Sunday, AIG disclosed that Goldman Sachs Group Inc and a parade of European banks were the major beneficiaries of $93 billion in payments -- more than half of the U.S. taxpayer money spent to rescue the massive insurer. CONTRACTUALLY REQUIRED? Cuomo, who has been pressing troubled banks and financial institutions such as AIG since last October for details of their bonus payments, said he was probing whether the AIG payments are contractually required or can be voided under New York law. "We need this information immediately in order to investigate and determine whether any of the individuals receiving such payments were involved in the conduct that led to AIG's demise and subsequent bailout," Cuomo wrote in a letter to Liddy. Cuomo said his office is investigating whether any of the retention payments may be considered fraudulent conveyances under New York law, and threatened to drag AIG into court if it fought the subpoena. |
| Posted by:Fred |
| #10 Fancy footwork and lots of bullshit. |
| Posted by: mojo 2009-03-18 15:15 |
| #9 Opensecrets.org is a bit flooded at this time, but I recall that Obama was one of or the top recipient of AIG money. All this outrage is a bunch of posturing. The problem is that AIG was a big funnel for covering a bunch of others with toxic assets. We taxpayers have funded $180 billion literally down this rathole. And now the cat is out of the bag. The Big O is full of it. Choked with anger my a$$. The problem is not AIG. The problem is the President and the Congress. NOTHING is going to happen until these people are thrown out of office. |
| Posted by: Alaska Paul 2009-03-18 14:50 |
| #8 Statute explicitly permits the AIG bonuses If Treasury does something that obviates statute per administrative regulation, they could be sued and would probably lose quickly and perhaps even made to pay court costs. |
| Posted by: mhw 2009-03-18 09:12 |
| #7 Better yet, save the $30 billion and another $30 billion each and every month. Wave bye-bye to AIG and let the claimants fight over the carcass. Private deals, private risk. Kiss the $150 billion of taxpayer money already flushed in the greatest swindle every perpetrated. It makes Bernie Madoff seem like the neighborhood numbers runner. May the taxpayer learn something from all this: to keep their hard earned money close and out of reach of the corrupt political class. |
| Posted by: ed 2009-03-18 08:33 |
| #6 #5 What's needed is an exit strategy Washington politicians! |
| Posted by: Besoeker 2009-03-18 07:50 |
| #5 What's needed is an exit strategy for bailouts. No more bailouts, no more problems and embarrassments like this. All that's needed is for the Donks to suppress their natural reflex to tax and spend. |
| Posted by: tipper 2009-03-18 05:00 |
| #4 WaPo has an article about how this kind of populist posturing is dooming any prospect of saving AIG. |
| Posted by: phil_b 2009-03-18 03:26 |
| #3 Obama, a lawyer, is "choked up with anger" over a company fulfilling its legal obligations. Give me a break. BTW, these kinds of delayed bonuses as retention payments are very common. |
| Posted by: phil_b 2009-03-18 03:13 |
| #2 This outrage is all so phony. Geithner had full knowledge of this from the time he was Governor of the New York Fed. Dodd ensured that the agreements were effective [see the article I just posted on this point]. Obama says he just found out about this on Thursday. In any normal corporation heads would roll. Geithner would be gone for not bringing it up earlier. Dodd would be complicit in the whole process and canned. And the Head of the organization would resign out of shame and common decency because that is where the buck stops. Any chance of any common decency here? Maybe Geithner? If so, there won't be anyone at Treasury to empty the trash can or open the door in the morning - to say nothing of answering the phone. Remember Hilary's ad - who do you want to answer the phone at 3 in the morning? Answer - somebody, anybody because there's no one there at the moment. This is such a joke. |
| Posted by: Omoter Speaking for Boskone7794 2009-03-18 01:09 |
| #1 The republican party could easily step in with a lawsuit stopping the treasury department from doing this until congress passes the legislation necessary to stop bonus payouts. They wouldn't let a sitting republican president change legislation like this. |
| Posted by: badanov 2009-03-18 00:12 |