A.I.G. Received 170 Billion In Bailouts Ready To Hand Out Millions In Bonuses

3-15-09

“We can’t solve problems by using the same kind of thinking we used when we created them.”

–Albert Einstein

American International Group (A.I.G.), which has received some $170 BILLION dollars in taxpayer funded bailout money even though we never told the government it was ok to hand over the funds, announced it was preparing to dole out a whopping $165 million dollars in bonuses to the very same employees that were running the show for the company while it was performing it’s pre bailout financial meltdown.

The New York Times reports,

Word of the bonuses last week stirred such deep consternation inside the Obama administration that Treasury Secretary Timothy F. Geithner told the firm they were unacceptable and demanded they be renegotiated, a senior administration official said. But the bonuses will go forward because lawyers said the firm was contractually obligated to pay them.

The payments to A.I.G.’s financial products unit are in addition to $121 million in previously scheduled bonuses for the company’s senior executives and 6,400 employees across the sprawling corporation. Mr. Geithner last week pressured A.I.G. to cut the $9.6 million going to the top 50 executives in half and tie the rest to performance.

The payment of so much money at a company at the heart of the financial collapse that sent the broader economy into a tailspin almost certainly will fuel a popular backlash against the government’s efforts to prop up Wall Street. Past bonuses already have prompted President Obama and Congress to impose tough rules on corporate executive compensation at firms bailed out with taxpayer money.

A.I.G., nearly 80 percent of which is now owned by the government, defended its bonuses, arguing that they were promised last year before the crisis and cannot be legally canceled. In a letter to Mr. Geithner, Edward M. Liddy, the government-appointed chairman of A.I.G., said at least some bonuses were needed to keep the most skilled executives.

“We cannot attract and retain the best and the brightest talent to lead and staff the A.I.G. businesses — which are now being operated principally on behalf of American taxpayers — if employees believe their compensation is subject to continued and arbitrary adjustment by the U.S. Treasury,” he wrote Mr. Geithner on Saturday.

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Wait a minute, tell me chairman Edward Liddy didn’t just say this:

“We cannot attract and retain the best and the brightest talent to lead and staff the A.I.G. businesses — which are now being operated principally on behalf of American taxpayers — if employees believe their compensation is subject to continued and arbitrary adjustment by the U.S. Treasury,” he wrote Mr. Geithner on Saturday.

The best and the brightest? The same people that drove the company to the verge of complete economic failure, which would have put thousands of people out of work, are considered the best and the brightest? What in the world are these people smokin’?

The bonuses will be paid to executives at A.I.G.’s financial products division, the unit that wrote trillions of dollars’ worth of credit-default swaps that protected investors from defaults on bonds backed in many cases by subprime mortgages.

If this whole mess wasn’t so damn tragic you would have to just sit down and laugh until you literally cried. Naturally our ever vigilant Congress critters that handed over our money without blinking an eye simply must pretend they are outraged. What a joke.

The rest of this nonsense can be read on the nytimes.com website here>>>

This entry was posted in Economy, U.S..

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