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Some perspective - AIG Financial Products Employee's Public Resignation Letter

Discussion in 'BBS Hangout: Debate & Discussion' started by yo, Mar 25, 2009.

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yo Contributing Member

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Makes me want to retract that pitchfork I've been wielding.

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AIG Financial Products Employee's Public Resignation Letter

Here is a resignation letter sent on Tuesday by Jake DeSantis, an executive vice president of the American International Group's financial products unit, to Edward M. Liddy, the chief executive of A.I.G. It was published in the New York Times.

Jake DeSantis writes:

DEAR Mr. Liddy,

It is with deep regret that I submit my notice of resignation from A.I.G. Financial Products. I hope you take the time to read this entire letter. Before describing the details of my decision, I want to offer some context:

I am proud of everything I have done for the commodity and equity divisions of A.I.G.-F.P. I was in no way involved in - or responsible for - the credit default swap transactions that have hamstrung A.I.G. Nor were more than a handful of the 400 current employees of A.I.G.-F.P. Most of those responsible have left the company and have conspicuously escaped the public outrage.

After 12 months of hard work dismantling the company - during which A.I.G. reassured us many times we would be rewarded in March 2009 - we in the financial products unit have been betrayed by A.I.G. and are being unfairly persecuted by elected officials. In response to this, I will now leave the company and donate my entire post-tax retention payment to those suffering from the global economic downturn. My intent is to keep none of the money myself.

I take this action after 11 years of dedicated, honorable service to A.I.G. I can no longer effectively perform my duties in this dysfunctional environment, nor am I being paid to do so. Like you, I was asked to work for an annual salary of $1, and I agreed out of a sense of duty to the company and to the public officials who have come to its aid. Having now been let down by both, I can no longer justify spending 10, 12, 14 hours a day away from my family for the benefit of those who have let me down.

You and I have never met or spoken to each other, so I'd like to tell you about myself. I was raised by schoolteachers working multiple jobs in a world of closing steel mills. My hard work earned me acceptance to M.I.T., and the institute's generous financial aid enabled me to attend. I had fulfilled my American dream.

I started at this company in 1998 as an equity trader, became the head of equity and commodity trading and, a couple of years before A.I.G.'s meltdown last September, was named the head of business development for commodities. Over this period the equity and commodity units were consistently profitable - in most years generating net profits of well over $100 million. Most recently, during the dismantling of A.I.G.-F.P., I was an integral player in the pending sale of its well-regarded commodity index business to UBS. As you know, business unit sales like this are crucial to A.I.G.'s effort to repay the American taxpayer.

The profitability of the businesses with which I was associated clearly supported my compensation. I never received any pay resulting from the credit default swaps that are now losing so much money. I did, however, like many others here, lose a significant portion of my life savings in the form of deferred compensation invested in the capital of A.I.G.-F.P. because of those losses. In this way I have personally suffered from this controversial activity - directly as well as indirectly with the rest of the taxpayers.

I have the utmost respect for the civic duty that you are now performing at A.I.G. You are as blameless for these credit default swap losses as I am. You answered your country's call and you are taking a tremendous beating for it.

But you also are aware that most of the employees of your financial products unit had nothing to do with the large losses. And I am disappointed and frustrated over your lack of support for us. I and many others in the unit feel betrayed that you failed to stand up for us in the face of untrue and unfair accusations from certain members of Congress last Wednesday and from the press over our retention payments, and that you didn't defend us against the baseless and reckless comments made by the attorneys general of New York and Connecticut.

My guess is that in October, when you learned of these retention contracts, you realized that the employees of the financial products unit needed some incentive to stay and that the contracts, being both ethical and useful, should be left to stand. That's probably why A.I.G. management assured us on three occasions during that month that the company would "live up to its commitment" to honor the contract guarantees.

That may be why you decided to accelerate by three months more than a quarter of the amounts due under the contracts. That action signified to us your support, and was hardly something that one would do if he truly found the contracts "distasteful."

That may also be why you authorized the balance of the payments on March 13.

At no time during the past six months that you have been leading A.I.G. did you ask us to revise, renegotiate or break these contracts - until several hours before your appearance last week before Congress.

I think your initial decision to honor the contracts was both ethical and financially astute, but it seems to have been politically unwise. It's now apparent that you either misunderstood the agreements that you had made - tacit or otherwise - with the Federal Reserve, the Treasury, various members of Congress and Attorney General Andrew Cuomo of New York, or were not strong enough to withstand the shifting political winds.

You've now asked the current employees of A.I.G.-F.P. to repay these earnings. As you can imagine, there has been a tremendous amount of serious thought and heated discussion about how we should respond to this breach of trust.

As most of us have done nothing wrong, guilt is not a motivation to surrender our earnings. We have worked 12 long months under these contracts and now deserve to be paid as promised. None of us should be cheated of our payments any more than a plumber should be cheated after he has fixed the pipes but a careless electrician causes a fire that burns down the house.

Many of the employees have, in the past six months, turned down job offers from more stable employers, based on A.I.G.'s assurances that the contracts would be honored. They are now angry about having been misled by A.I.G.'s promises and are not inclined to return the money as a favor to you.

The only real motivation that anyone at A.I.G.-F.P. now has is fear. Mr. Cuomo has threatened to "name and shame," and his counterpart in Connecticut, Richard Blumenthal, has made similar threats - even though attorneys general are supposed to stand for due process, to conduct trials in courts and not the press.

So what am I to do? There's no easy answer. I know that because of hard work I have benefited more than most during the economic boom and have saved enough that my family is unlikely to suffer devastating losses during the current bust. Some might argue that members of my profession have been overpaid, and I wouldn't disagree.

That is why I have decided to donate 100 percent of the effective after-tax proceeds of my retention payment directly to organizations that are helping people who are suffering from the global downturn. This is not a tax-deduction gimmick; I simply believe that I at least deserve to dictate how my earnings are spent, and do not want to see them disappear back into the obscurity of A.I.G.'s or the federal government's budget. Our earnings have caused such a distraction for so many from the more pressing issues our country faces, and I would like to see my share of it benefit those truly in need.

On March 16 I received a payment from A.I.G. amounting to $742,006.40, after taxes. In light of the uncertainty over the ultimate taxation and legal status of this payment, the actual amount I donate may be less - in fact, it may end up being far less if the recent House bill raising the tax on the retention payments to 90 percent stands. Once all the money is donated, you will immediately receive a list of all recipients.

This choice is right for me. I wish others at A.I.G.-F.P. luck finding peace with their difficult decision, and only hope their judgment is not clouded by fear.

Mr. Liddy, I wish you success in your commitment to return the money extended by the American government, and luck with the continued unwinding of the company's diverse businesses - especially those remaining credit default swaps. I'll continue over the short term to help make sure no balls are dropped, but after what's happened this past week I can't remain much longer - there is too much bad blood. I'm not sure how you will greet my resignation, but at least Attorney General Blumenthal should be relieved that I'll leave under my own power and will not need to be "shoved out the door."

Sincerely,

Jake DeSantis
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#1 yo, Mar 25, 2009

yo Contributing Member

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Link: http://consumerist.com/5183889/aig-...es-public-resignation-letter?skyline=true&s=x

#2 yo, Mar 25, 2009
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Idiot would have got 0 if not for the gov't so he should stfu.

#3 Air Langhi, Mar 25, 2009
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There goes the myth that all the bonuses were going to the CDS employees.
He said most of them have already left. Yes, you can still profit in equities in a bear market. If somebody is on the losing end of a trade, they got burned by the winner.

The rock stars got offered jobs, but chose to stay to get their retention bonus. Now that there is no bonus, they will take up new jobs and split. Tax payer money ain't gonna get paid, when all the money making talent has left AIG. The CDS crooks are gone. The profit makers are gone. The taxpayers now own 80% of a company of mediocre and average employees. We will get even less money back when they get broken up and sold.

#4 BetterThanEver, Mar 25, 2009
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Air Langhi said:

Idiot would have got 0 if not for the gov't so he should stfu.
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He ends up with 0 anyway, so you win. He donated it all.

#5 BetterThanEver, Mar 25, 2009
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Air Langhi said:

Idiot would have got 0 if not for the gov't so he should stfu.
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Except that they had job offers elsewhere they could have taken, but were promised the money once the company was bailed out.

#6 juicystream, Mar 25, 2009
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BetterThanEver said:

He ends up with 0 anyway, so you win. He donated it all.
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And when he finds another six- or seven-figure salaried corporate job within the year, he'll have a nice little tax deduction waiting for him next April. Add the self-imposed vacation and the vanity editorial in Times, and it looks like he still wins.

#7 Dairy Ashford, Mar 26, 2009

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It's a little naive on his part to not recognize that he did in fact work for AIG, and like it or not, his bonus would in some fashion depend on the rest of the company's performance. Most companies don't give bonuses purely based on each individual business unit's performance, but rather also include a portion based on the overall company's performance. I'm not sure of the details of his BU's arrangement, though

#8 bigtexxx, Mar 26, 2009

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glynch Contributing Member

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The whole stinking mess reminds me of Abu Graib. The big fish get off. This guy may indeed be innocent.

Rubin, Paulson, Phil Gram, Greenspan, the AIG guys and the rest should be called to Congress and have to testify under oath until we find out exactly how this mess happened and who should have to repay back money to the tax payers and who should have to go to jail.

#9 glynch, Mar 26, 2009
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bigtexxx said:

It's a little naive on his part to not recognize that he did in fact work for AIG, and like it or not, his bonus would in some fashion depend on the rest of the company's performance. Most companies don't give bonuses purely based on each individual business unit's performance, but rather also include a portion based on the overall company's performance. I'm not sure of the details of his BU's arrangement, though
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OMG! I can't believe my eyes: it's a bigtexxx post that I agree with 100%. What is the world coming to?!?

#10 BetterThanI, Mar 26, 2009
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BetterThanEver said:

He ends up with 0 anyway, so you win. He donated it all.
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He made that choice on his own though. This 90% tax isn't going to pass and everyone knows that. So he's just throwing himself a little pity party to make a public statement.

#11 Major, Mar 26, 2009
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I gotta admit that I don't feel real sorry for the dude. There are a ton of people way worse off than him. If he had\has other opportunities, good luck. If not, it is what happens. Look at Enron. Lots of people didn't do anything wrong and they got royally ****ed, way worse than this douche.

#12 Master Baiter, Mar 26, 2009
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I certainly don’t feel sorry for the guy either as I struggle to pay 2 mortgages every month, but I don’t think he’s a “douche” or an “idiot” for being upset that he’s become a target for a bunch of grandstanding politicians and now even his own CEO, when all he’s doing is trying to diffuse the ticking time bomb that his predecessors (not him) planted and got filthy rich for doing so.

I understand that AIG is pretty much a 4-letter word now and anyone who works there may as well be Andy Fastow as far as the general public is concerned, but this guy seems to be on the up and up.

#13 ima_drummer2k, Mar 26, 2009

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F this stupid ass simp

-I did not get a bonus this year.
-About a quarter of our employees have been layed off and there is another round of layoffs coming. They have already cut all salaries by 10%.
-I also work 10 to 12 hours a day including some Saturdays and Sundays. Last month i logged 136 hours in 10 days.
...

I don't even work in the Financial Sector. I have less to do with this mess than you yet i am also paying the price. I'm supposed to feel sorry for this guy.

People think we have become too PC, i think we have become too civilized. We should take a page from the French and setup a Guillotine right on Wall Street.

#14 Zion, Mar 26, 2009
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Zion said:

F this stupid ass simp

-I did not get a bonus this year.
-About a quarter of our employees have been layed off and there is another round of layoffs coming. They have already cut all salaries by 10%.
-I also work 10 to 12 hours a day including some Saturdays and Sundays. Last month i logged 136 hours in 10 days.
...

I don't even work in the Financial Sector. I have less to do with this mess than you yet i am also paying the price. I'm supposed to feel sorry for this guy.

People think we have become too PC, i think we have become too civilized. We should take a page from the French and setup a Guillotine right on Wall Street.
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What industry are you in?

#15 F.D. Khan, Mar 26, 2009
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glynch said:

The whole stinking mess reminds me of Abu Graib. The big fish get off. This guy may indeed be innocent.

Rubin, Paulson, Phil Gramm, Greenspan, the AIG guys and the rest should be called to Congress and have to testify under oath until we find out exactly how this mess happened and who should have to repay back money to the tax payers and who should have to go to jail.
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Agree, but please do not forget Franks, Dodd, Holder, et al in the Fannie Mae, Freddie Mac and banking debacles.

#16 thumbs, Mar 26, 2009
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Zion said:

People think we have become too PC, i think we have become too civilized. We should take a page from the French and setup a Guillotine right on Wall Street.
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If it gets a lot worse, I wouldn't be shocked if something like this doesn't happen. Would it be a terrible thing? Maybe, maybe no.

#17 Master Baiter, Mar 26, 2009

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Zion said:

People think we have become too PC, i think we have become too civilized. We should take a page from the French and setup a Guillotine right on Wall Street..
Click to expand...

Master Baiter said:

If it gets a lot worse, I wouldn't be shocked if something like this doesn't happen. Would it be a terrible thing? Maybe, maybe no.
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Whether Republican or Democrat or Communist or Libertarian or whatever, the rule of law always should apply. The country really is in trouble if you espouse "lynch law." To forget -- or apparently not even to know -- is truly sad.

#18 thumbs, Mar 26, 2009

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thumbs said:

Whether Republican or Democrat or Communist or Libertarian or whatever, the rule of law always should apply. The country really is in trouble if you espouse "lynch law." To forget -- or apparently not even to know -- is truly sad.
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And this is coming from the same people who get upset when an armed robber gets shot. Liberal logic, go figure.

#19 Artesticle, Mar 26, 2009
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Artesticle said:

And this is coming from the same people who get upset when an armed robber gets shot. Liberal logic, go figure.
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how many liberals on this board have advocated lynch mob 'justice' for these people?

#20 Rocketman95, Mar 26, 2009

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