Punked: Stimulus Bill Guaranteed AIG bonus payments

That's all fine and good, but don't really address issues that majority of Americans are currently facing and really has no effect on my life or anyone that I know.

 

According to published reports and contemporaneous evidence - yes, that is exactly what happened. Do you have evidence to the contrary?

I agree with this, of course the supposed legal obstacles are the same. HOwever as I said yesterday, I don't buy AIG's response that these contracts are absolutely airtight. There's a number of avenues you could use to challenge them.

 

Because they don't want to bite the hand that's been feeding them.

 

Well, if that's true, then the lack of oversight is terribly frightening. I guess that's what happens when you can't get a team to work for you.

 

when your contrary evidence says this:

it sort of undercuts the argument that Geithner was not unaware until last week.

 

As criminal as it seems that these AIG execs are going to get huge bonuses for doing a terrible job (through our tax dollars nonetheless), I would find it really unnerving if the government/IRS really institutes a 91% tax on the bonus dollars.
Even if it is a "special" one time tax, something seems very wrong with that kind of tactic.

 

That is a great idea.......why not? The companies are essentially insolvent, their leadership should not get a bonus until they lead the company back to solvency.

DD

 

So they are getting our tax dollars as a bonus then our government is going to tax it heavily and take it back.

Illustrates one reason I'm not in favor of big government.

 

How does that translate to that situation; that would be the government intervening to prevent an unjust outcome that was set up in the absence of regulation.

 

I see your point about the absence of regulation, but is also highly inefficient.

 

there are probably constitutional issues to having a tax that is just on a handful of people. essentially this is bill of attainder-ish situation.

 

And the drama continues...

http://www.cnn.com/2009/POLITICS/03/18/aig.bonuses.congress/index.html

(CNN) -- Senate Banking committee Chairman Christopher Dodd told CNN Wednesday that he was responsible for language added to the federal stimulus bill to make sure that already-existing contracts for bonuses at companies receiving federal bailout money were honored.
Sen. Chris Dodd, D-Connecticut, appears on CNN's "The Situation Room" on Wednesday.

Sen. Chris Dodd, D-Connecticut, appears on CNN's "The Situation Room" on Wednesday.

Dodd acknowledged his role in the change after a Treasury Department official told CNN the administration pushed for the language.

Both Dodd and the official, who asked not to be named, said it was because administration officials were afraid the government would face numerous lawsuits without the new language.

Dodd, a Democrat, told CNN's Dana Bash and Wolf Blitzer that Obama administration officials pushed for the language to an amendment designed to limit bonuses and "golden parachutes" at those companies.

"The administration had expressed reservations," Dodd said. "They asked for modifications. The alternative was losing the amendment entirely."

On Tuesday, Dodd denied to CNN that he had anything to do with adding the language, which has been used by officials at bailed-out insurance giant AIG to justify paying millions of dollars in bonuses to executives after receiving federal money.

He said Wednesday that the "grandfather clause" language "seemed like innocent modifications" at the time. Video Watch Dodd's interview with CNN's Dana Bash »

"I agreed reluctantly," Dodd said. "I was changing the amendment because others were insistent."

Dodd said he did not speak to high-ranking administration officials and the change came after his staff spoke with staffers from Treasury.

The White House did not immediately respond to CNN's request for comment.

On Capitol Hill on Wednesday, AIG chief executive Edward Liddy called the roughly $165 million in bonuses "distasteful" but necessary because of legal obligations and competition.

"We have to continue managing our business as a business -- taking account of the cold realities of competition for customers, for revenues and for employees," Liddy told a House Financial Services subcommittee. "Because of this, and because of certain legal obligations, AIG has recently made a set of compensation payments, some of which I find distasteful."

Pennsylvania Rep. Paul Kanjorski, the hearing's chairman, responded to Liddy's statement by arguing that AIG should have refused to pay all the bonuses -- regardless of its contractual obligations with the bonus recipients.

"Let them sue us," said Kanjorski, a Democrat.

Liddy, who joined AIG after the bailout, said some employees have returned their bonus money.

Senators and representatives have vowed to get the bonus money back, but questions have arisen about why Congress didn't act to prevent the bonuses in the first place.

"Well, the only lever we have in this is the fact that these corporations have come to the Congress of the United States and want a taxpayers' bailout," Sen. Chuck Grassley, R-Iowa, said Wednesday on CNN's "American Morning."

"If it weren't for that, we would not have any leverage on how any individual corporation is being run, and we don't pretend to have any leverage on any corporation today in the United States that's not seeking federal help," said Grassley, the top Republican on the Senate Finance Committee. Related: Grassley defends 'suicide' comment

AIG, an ailing insurance giant, has received more than $170 billion in federal assistance. Taxpayers now own nearly 80 percent of the company.

In a letter to Congress on Tuesday, New York Attorney General Andrew Cuomo confirmed that AIG paid 73 employees bonuses of $1 million-plus each this year after it received federal bailout money.

AIG will have to return the $165 million it paid in executive bonuses to the Treasury Department, Treasury Secretary Timothy Geithner said Tuesday.

Grassley and Sen. Max Baucus, D-Montana, on Tuesday introduced a plan that would impose a hefty tax on retention bonuses paid to executives of companies that received federal bailout money or in which the United States has an equity interest. Video Watch Grassley describe how the tax would work »

Other lawmakers, such as Rep. Charlie Rangel, D-New York, said it would be unfair to use the tax code as punishment, but Grassley said it's not a question of being fair.

"It's unfair what they did to the taxpayers by paying bonuses when they don't have the money to pay bonuses," he said. iReport.com: Sound off on AIG

AIG Chairman and CEO Edward Liddy has defended the bonuses, saying the company needed them to retain top talent and because of contractual rights. He has pledged to reduce 2009 bonus payments, which AIG refers to as "retention payments," by at least 30 percent.

Libby is testifying Wednesday on Capitol Hill. He's likely to face tough questions from lawmakers despite not being at the helm of AIG when the financial fiasco happened. He took over about six months ago. Who's insured by AIG? »
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Rep. Barney Frank, D-Massachusetts, said Wednesday that Congress can't just pass a law to abrogate any past contracts because that move would not hold up in court. Instead, he argued the executives don't deserve bonuses under the contract. Video Watch what Frank says about the bonuses »

"We own this company in effect, and we're not asking that these bonuses be rescinded because we have lent money to the company. I believe we are saying as the owners of the company, we do not think ... we should have paid bonuses to people who made mistakes who were incompetent," said Frank, chairman of the House Financial Services Committee.

 

Again, the bonuses were not guaranteed by Dodd or Obama.

 

I also read over on the FREEPER forums that AIGFP employees, at Obama's insistence, were guaranteed pet Chupacabras as a means of Ninja defense, which was initially supposed to be combat cyborgs only.

How uncool is that!

 

This is the dumbest thing you have ever posted. For God's sake, read the damned thing man.

It does not guarantee the bonuses. It merely states the obvious. They cannot revoke bonuses that are otherwise due by contract.

If AIG had tried to take away the bonuses, they would get sued. They would lose. Back to square one plus a lot of legal bills.

The stimulus package was NEVER about modifying employment contracts. It never was supposed to be. That is why we have bankruptcy courts.

And you talk about incompetence. HA!!!!!

 

Then why the outrage?

 

That phrase sums up most reactions to faux-outrage exhibited by Republicans thus far into Obama's presidency.