Official: AIG does not give a fuck

[someguy]

http://www.nytimes.com/2009/03/16/business/16aig.html?_r=2&hp (click link to read the whole article)

A.I.G. Paying $165 Million in Bonuses After Federal Bailout

WASHINGTON — The American International Group, which has received more than $170 billion in taxpayer bailout money from the Treasury and Federal Reserve, plans to pay about $165 million in bonuses by Sunday to executives in the same business unit that brought the company to the brink of collapse last year.

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.

When you're going down in flames you don't want to throw some gasoline on yourselves, but I guess AIG disagrees with that.

[shoe1985]

This isn't just happening at AIG, but everywhere. A lot of the companies laying off their workers are giving themselves raises, or/and living their lives the same. Everyone else is supposed to cut back, but not them.

I would tell these execs that we want $165 million to begin repaying back their loans to the taxpayers.

[Preston_79]

165 million. That's nothing. We'll just print some more.

[Homyrrh]

165 million. That's nothing. We'll just print some more.
Well-played, sir.

[shoe1985]

165 million. That's nothing. We'll just print some more.

Thanks to the Bush Administration not wanting any regulation of how to use the funds, this is what happens.

These companies that do this need to be taken over, and the execs kicked out. They should care about whether their companies survive or not.

We could just print more money though.

[Homyrrh]

Obama sees your $165 million in bonuses...and raises you a corporate bitch slap:

President Obama has instructed the Treasury secretary to try
to stop the faltering insurance giant American International
Group from paying out hundreds of millions of dollars in
bonuses to executives, as the administration scrambled to
avert a populist backlash against banks and Wall Street that
could complicate Mr. Obama's economic recovery agenda.

http://www.nytimes.com/2009/03/17/us/politics/17obama.html?hp

[QUENTIN]

Fucked, but obvious and kind of a "duh" foregone conclusion. It's rampant throughout the bailed out companies.

The one upside, however small, from all of this is that people, even some uber-capitalist conservatives, are finally realizing just how deeply corrupted, unprincipled, and destructive the investor class is.

[Homyrrh]

Fucked, but obvious and kind of a "duh" foregone conclusion. It's rampant throughout the bailed out companies.

The one upside, however small, from all of this is that people, even some uber-capitalist conservatives, are finally realizing just how deeply corrupted, unprincipled, and destructive the investor class is.
Welll...uber-capitalist conservatives would've let the incompetence at AIG ingest the company and die both slowly and painfully...just saying...

[QUENTIN]

Welll...uber-capitalist conservatives would've let the incompetence at AIG ingest the company and die both slowly and painfully...just saying...

True, though it's far from just "incompetence" that caused their failure and the problem with that is then all the "little people" that relied on AIG would be hurt, which is what the government is trying to prevent.

These bailouts are miserably arranged and managed and the way they have been doled out will be very detrimental. I'm fucking furious over the massive handover from the inflicted to the inflicters and will not pay my taxes.

However, the option of relying entirely on the mythical "free market" in a pseudo-capitalist system such as ours to allow businesses, and subsequently workers, investors, and customers, to fail isn't much better than artificially propping them up. Why we can't give the money directly to the people who would be hurt rather than those who've spent years hurting them remains to be seen.

Many of the uber-capitalist conservatives I referenced, despite strong opposition to the bailouts, refused to acknowledge in a general way, some continue to even as its rubbed in their face, that the majority of top tier businesspeople in this country take the attitude "Fuck you, fuck the company, fuck the employees, investors, and customers, fuck the country, I'm gonna get mine and get it big." That really is how selfish, self-serving, and unethical business practices are among this group as this scandal and ruinous economy illustrate.

I know I link to his articles a lot, but he really is one of the best, most consistent, fair, and principled commentators out there and Glenn Greenwald's recent article on this debacle is worth reading:

http://www.salon.com/opinion/greenwald/2009/03/16/aig/index.html

From the opening:

The sanctity of AIG's contracts

Larry Summers, Sunday, on AIG’s payment of executive bonuses:

"We are a country of law. There are contracts. The government cannot just abrogate contracts. Every legal step possible to limit those bonuses is being taken by Secretary Geithner and by the Federal Reserve system."

Associated Press, February 18, 2009:

"The United Auto Workers’ deal with Detroit’s three automakers limits overtime, changes work rules, cuts lump-sum cash bonuses and gets rid of cost-of-living pay raises to help reduce the companies’ labor costs, people briefed on the agreement said today.

The UAW announced Tuesday that it reached the tentative agreement with General Motors Corp., Chrysler LLC and Ford Motor Co. over contract concessions, as GM and Chrysler sent plans to the Treasury Department asking for a total of $39 billion in government financing to help them survive.

Concessions with the union are a condition of the $17.4 billion in government loans that the automakers have received so far."

Apparently, the supreme sanctity of employment contracts applies only to some types of employees but not others. Either way, the Obama administration’s claim that nothing could be done about the AIG bonuses because AIG has solid, sacred contractual commitments to pay them is, for so many reasons, absurd on its face.

I'll be watching closely to see what the administration does to tangibly and actually prevent these bonuses from being paid, but I expect that like the phony pledge to re-establish a nation of laws, right the rampant abuses of the Bush Administration, and take a more even handed approach to the Israeli/Palestinian conflict it'll be all empty rhetoric and posturing. Though I'd love to be proved wrong.

[shoe1985]

Excellent post there, QUENTIN. I have been reading a lot of different message boards, and it seems that the Republicans have no issues with the current things that AIG execs are doing. They feel there should be no regulation, or at least any more than what we currently have. But, these same people will bitch and moan if AIG does go under, and the FDIC can only cover the $250,000 out of whatever they have in the company.

It amazes me how a lot of people say to let these companies fail, but these are not your ordinary everyday business. These are people who have your money, whether that be your basic savings or your retirement money. It could, and would, disappear if they go under.

Which is why these companies should be regulated heavily. There is no reason these execs are not doing what is best for the company, employees, and taxpayers. I think this is really eye opening to many people of how divided this country truly is between the rich and everyone else. I think Obama is seeing how corrupt these people really are, and it is going to take a lot of work to get them back on the page, if that ever happens.

[Cop No. 633]

It's times like these that I wish that there are literal corporate head hunters. These people need to be six feet under the ground, not get six figure bonuses every time they fuck up. Call me fucked up, but these people aren't making anyone's lives any better except their own.

[Homyrrh]

It's times like these that I wish that there are literal corporate head hunters. These people need to be six feet under the ground, not get six figure bonuses every time they fuck up. Call me fucked up, but these people aren't making anyone's lives any better except their own.
Bitches get Mad-offed...oh, nevermind.


Summers, Liddy and outside legal counsel all vouched for that sanctity of said contracts. I'd like to know if the designated recipients (which apparent doesn't include Liddy) have the option of declining...in which case putting them on the spot would probably provide some opportunity for solution.

Also, Citigroup's being just-as-evil-but-not-quite-so-devious in their $38.2 million in compensation to Vikram Pandit (http://dealbook.blogs.nytimes.com/2009/03/16/pandit-gets-pay-package-valued-at-382-million/?ref=business). I guess it's worth noting they've posted five consecutive quarters of multibillion-dollar losses.

Also, this (http://www.nytimes.com/2009/03/15/business/15school.html?em) is somewhat interesting and fairly relevant to the topic in general; it's a grave illustration of how abused "the system" can be.

[Badbird]

This isn't just AIG. This is Corporate Culture in general.

Remember that woman who ran HP into the ground and was then given a $42 million "thank you" as she left, and then was hired as John McCain's economic adviser?

Man, it must be good to get paid a lot for doing a bad job.

[hasselbrad]

Bitches get Mad-offed...oh, nevermind.


Summers, Liddy and outside legal counsel all vouched for that sanctity of said contracts. I'd like to know if the designated recipients (which apparent doesn't include Liddy) have the option of declining...in which case putting them on the spot would probably provide some opportunity for solution.

Also, Citigroup's being just-as-evil-but-not-quite-so-devious in their $38.2 million in compensation to Vikram Pandit (http://dealbook.blogs.nytimes.com/2009/03/16/pandit-gets-pay-package-valued-at-382-million/?ref=business). I guess it's worth noting they've posted five consecutive quarters of multibillion-dollar losses.

Also, this (http://www.nytimes.com/2009/03/15/business/15school.html?em) is somewhat interesting and fairly relevant to the topic in general; it's a grave illustration of how abused "the system" can be.

That link pretty much sums up how we got where we were.
The bottom-line, real world nuts and bolts of business have taken a back seat to how Wall Street rates the company.
I've worked in several different industries over the years and I watched MBAs fuck up a hell of a lot companies with their short-sightedness. My fiancée has spent the last few months working 14-16 hour days because MBAs thought they could cut some costs and drive the stock price up by eliminating a department. In one two week pay period, she had another week worth of overtime. The amount of appeals and grievances they are swamped under is growing exponentially every day and there is no end in sight, which leads to cases going non-compliant and opening up the company to government fines and penalties as well.
Of course, the MBAs will probably get paid big fat bonuses... just like Franklin Raines did by cooking the books as Fannie Mae came apart at the seams.
Loverly.
I think I'm going to go punch an MBA in the face.

[QUENTIN]

Summers, Liddy and outside legal counsel all vouched for that sanctity of said contracts.

http://roomfordebate.blogs.nytimes.com/2009/03/17/when-bonus-contracts-can-be-broken/

[Homyrrh]

http://roomfordebate.blogs.nytimes.com/2009/03/17/when-bonus-contracts-can-be-broken/
I'm quite surprised I missed it if this was recently in The Times; 'Room for Debate' is always interesting.

I'd have to agree with Dr. Fried.

[shoe1985]

I am watching Liddy on CNN right now, and he said that he expects that those who give back the money will hand in their resignation. Let it happen, there are so many unemployed and soon to be college graduates out there that would do a much better job than these people for a much lower cost. Sure, they may not have the experience, but these people at AIG have the experience, look where they are now.

[Preston_79]

Sen. Dodd Admits Adding Bonus Provision to Stimulus Package
Sen. Chris Dodd, D-Conn., said Wednesday the Treasury forced him to add language to the stimulus bill last month that exempted all executive bonuses made before February 11, 2009.

By Trish Turner

FOXNews.com

Wednesday, March 18, 2009
ShareThis


In a dramatic reversal Wednesday, Sen. Chris Dodd, D-Conn., confessed to adding language to the stimulus bill last month that exempted all bonuses that bailed-out companies had promised to employees before Feb. 11, 2009.

Dodd told FOX News that Treasury officials forced him to make the change.

"As many know, the administration was, among others, not happy with the language. They wanted some modifications to it," he said. "They came to us, our staff, and asked for changes, and the changes at the time did not seem that obnoxious or onerous."

But the provision has become a flash point for criticism amid the controversy over $165 million in bonuses given out by AIG after securing more than $170 billion in federal aid. The language in the stimulus bill wasn't specific to AIG, but some have expressed outrage that it appears to have created a loophole.

Dodd said the argument put forward by Treasury was that a "flood of lawsuits" would come forward if the change was not made.

Dodd said he was unaware of the AIG bonuses at the time the bill was being written back in early February. He also said he has no reason to believe Treasury officials making the argument knew about the AIG bonuses.

When asked how administration officials have this kind of leverage over members of Congress, Dodd said, "The administration has veto power. ... No one suggested a veto to me, I don't want to imply that to you. But certainly that's not an insignificant tool."

On Tuesday, Dodd told FOX News that he didn't add the exemption.

"When the language went to the conference and came back, there was different language," he said then. "I can tell you this much, when my language left the Senate, it did not include it. When it came back, it did."

Dodd still thinks the Treasury can get the bonuses back, despite the inclusion of a date in the stimulus bill, and he said officials are, in fact, using his very language to claw back the money.

"There is language after that date that says explicitly that the Treasury has the right to modify, reaching back, those bonuses, compensations, if it's inconsistent with the TARP legislation or contrary to the public interest," he said.

"In fact, it's that phrase that the administration is relying on this evening as a means by which they can reach back and maybe get these bonuses back," he said.

Still, Dodd has his enemies. The Senate Republican re-election campaign quickly shot out a statement on the Dodd reversal, as he is a prime target in the 2010 midterm elections and is facing a Republican opponent who, in one poll, is in a statistical tie with him.

"Senator Dodd's reversal on this issue is both astonishing and alarming," the National Republican Senatorial Campaign said in a written statement. "Contrary to his statements and denials over the last 24 hours, Senator Dodd has now admitted that he and his staff did in fact change the language in the stimulus bill to include a loophole for AIG executive bonuses."

The group added that Dodd had "misled voters and equivocated on his statements."


They were unaware of the pending bonuses? Come on Dodd, after all the other bonuses that corporations had been giving out with relief money it should have been assumed that AIG had similar plans. What a royal fuck up and it pisses me off seeing political figures talk about how angry they are about it, like talking tough will make me forget they made it all possible.


March 18, 2009
Posted: 12:58 am
March 18, 2009

So now it appears that President Obama knew all about those AIG bonuses - in time to do something about them.

And how did he know?

Because Treasury Secretary Timothy Geithner told him about them - last Thursday, before AIG honchos disbursed $165 million in "retention" bonuses to many of the same folks who basically bankrupted the company last year.

So why, we wonder, was the president in such high dudgeon Monday regarding the payouts?


Obama blasted the firm's "recklessness and greed," adding "this isn't just a matter of dollars and cents. It's about our fundamental values."

Took him long enough to catch on.

For the bonuses were public knowledge long before last week.

The Treasury Department knew of them last fall. So did the Federal Reserve.

And the administration had been dickering with Congress for weeks in an effort to restrict them, without success.

For his part, Geithner supposedly learned about the pending payouts only last week - from the Fed.

But how is that possible?

Last fall, he was head of the same New York Federal Reserve Bank that last week supposedly told him of the bonuses.

And for all of Obama's bombast, and his underlings' unease, the fact remains that Treasury not only never sought to block them - but, in fact, approved them.

An unnamed AIG official told The New York Times that the company never would've paid the bonuses without Treasury and Fed approval.

Yesterday, thanks to a timely subpoena from Attorney General Andrew Cuomo, it was discovered just how outrageous the AIG bonuses really are.

Fully 73 execs got $1 million or more each - of whom 22 were paid at least $2 million, while seven got $4 million. One lucky duck pocketed a cool $6.4 million.

Moreover, though the bonuses were designated as "retention" payments - intended to keep the execs working at AIG - nearly a dozen of the recipients had already left the company.

Adding even more insult to injury, they were paid to the very same officials whose risky schemes brought AIG to its knees in the first place.

So why didn't anyone do anything?

Rep. Elijah Cummings (D-Md.) of the House Government Oversight Committee certainly wants to know. He'd been hectoring AIG Chairman Edward Liddy about the matter since December - when the company shelled out $55 million in bonuses.

"I assumed they were well aware of it and would take appropriate action," he said, referring to Treasury.

Right on the first count.

Wrong on the second.

Monday, Obama asked: "How [does AIG] justify this outrage to the taxpayers who are keeping the company afloat?"

Simple - Obama's own Treasury Department gave them the go-ahead.

Yes, Treasury will now seek to extract $165 million from AIG future bailout booty, making the taxpayers whole.

But the bonuses stand, Geithner's already shaky credibility has received another blow - and the president's feigned anger is fooling no one.

Another bad week for the Obama administration - and it's only Wednesday.

[shoe1985]

I am not a Dodd fan. I think the guy is an idiot.

This came from CNN.com (http://www.cnn.com/2009/POLITICS/03/18/aig.bonuses.congress/index.html):

AIG's derivatives branch is in Dodd's home state. Many of the bonuses in question were awarded to executives at that branch. But in the written statement, Dodd said he had no idea the legislation would impact the company.

He is in charge of this stuff, and doesn't do anything about it until now? Also, he is running for re-election soon, and this would fall on him. So, why not take off the heat and make yourself the innocent victim?

This sounds like normal politics at work.

[Preston_79]

Great source there, Preston. I don't listen to anything Fox News says because they hate Obama, yes, they do. If this was a Republican, they would have buried it so nobody would have known about it, if it was true.

If it is true, well, welcome to Washington DC.

I am not a Dodd fan either. I think the guy is an idiot.

This came from CNN.com (http://www.cnn.com/2009/POLITICS/03/18/aig.bonuses.congress/index.html):



He is in charge of this stuff, and doesn't do anything about it until now? Also, he is running for re-election soon, and this would fall on him. So, why not take off the heat and make yourself the innocent victim?

This sounds like normal politics at work.

Fox leans to the right, but I don't think the network hates Obama.

If it was true? The most damning evidence are quotes from Dobbs himself.

To be fair are there any lefty news outlets that I shouldn't use as a source? I only see users bashing the ones they think or too conservative, like Fox or the New York Post, but I never hear anyone mention anything when it comes to news that's spun for the left. Do any of the major networks or news outlets lean to the left in your opinion? I'm just curious. This is an open question to anyone not just shoe.

[shoe1985]

Fox leans to the right, but I don't think the network hates Obama.

If it was true? The most damning evidence are quotes from Dobbs himself.

To be fair are there any lefty news outlets that I shouldn't use as a source? I only see users bashing the ones they think or too conservative, like Fox or the New York Post, but I never hear anyone mention anything when it comes to news that's spun for the left. Do any of the major networks or news outlets lean to the left in your opinion? I'm just curious. This is an open question to anyone not just shoe.

I don't think they hate him, more of what he wants to do with the country.

Honestly, all the major outlets lean to a certain side. You have to go with independent sources to find those in the middle.

I would say CNN overall leans to the left, but you will find people on the network, like Lou Dobbs, who leans in the middle. I like some of the people on CNN, mainly those who don't discuss politics as much, but the news going on.

The only guy on Fox News who is close to the middle would be Neil Cavuto, who is on at 4. Otherwise, I don't bother with Fox News.

Like I mentioned, Dodd is going to be in a heated election, and the blame would fall to him with this current issue. So, I wouldn't be surprised if he was trying to take any heat off of him. This is not to say that the treasury did not have a part in this. If you know anything about politics, you know this crap happens all the time. Which is why I went back and edited my post. I wasn't in the room when this bill was being written, I only know what has been released.

[QUENTIN]

Republicans and executive compensation limits (http://www.salon.com/opinion/greenwald/2009/03/19/gop/index.html)

As I wrote on Tuesday, it was clearly Treasury officials (led by Tim Geithner) who were the driving force behind the dilution of Chris Dodd's efforts to impose strict limitations on the executive compensation paid by bailed-out companies. That fact leads former Bush speechwriter Marc Thiessen, writing at National Reveiw, to demand that Republicans blame the AIG bonus payments on Obama because he signed the stimulus bill that contained the exception for pre-February, 2009 employment agreements:

President Obama rammed through the stimulus bill — over Republican objections — that explicitly protected the AIG bonuses. . . .

Either Obama did not know the provision was in there, which validates the Republican point that no one read this bill. Or he did, and signed it anyway. Either way, it’s a disaster of his making.

We should lay responsibility for the AIG bailout where it belongs — directly at the President’s feet.

That's a nice illustration of the oozing, limitless deceit that characterizes the people who governed the country for the last eight years. It's certainly true that the Obama administration advocated less rigid compensation limits than Dodd wanted. But most leading Congressional Republicans -- the ones Theissen is urging blame Obama for the AIG bonus paments -- opposed all forms of executive compensation limits.

Continue reading... http://www.salon.com/opinion/greenwald/2009/03/19/gop/index.html


So oppose something entirely, have the Administration's Treasury take a middle ground, a powerful Senator fight for it entirely and have his bill watered down by the Treasury. Then when what you opposed all along in its entirety is seen as not hard enough and incites public outrage, pretend you're for it entirely and it's all the Senator's fault. Man, what a fucked up, disingenuous, hypocritical group.

I'm angry at Obama and Geithner and especially Summers, but Republican politicians and pundits have absolutely no right to be. The only thing they can genuinely, honestly be upset about is that the government is now attempting at all to get that money, that the people demand back, back.

[shoe1985]

Does anyone think maybe they took that out in case they wanted to see if anyone would actually do what AIG did? I was thinking about this a lot today. This could have been a way to show who would get greedy and take the money and use it as a bonus.