AIG Bonuses Returned by Employees

After the recent outrage all over the news about bonuses being dolled out like air at AIG there is finally some common sense coming into the subject at hand. Many of the folks working at AIG are returning the massive bonuses and to them I say thank you.

When it comes right down to it, there isn’t a law in the land that could tax them out of it, force them to decline the bonuses, or Constitutionally take the bonuses away from them. It took some pressure by the media and all of us little bloggers to force the issue on Washington and embarrass the President in doing so but it needed to be made right. And the ones making it right are doing it willingly and they work at AIG. Over at the New York Times they have this to say on it…

Attorney General Andrew M. Cuomo of New York announced late Monday afternoon that 9 of the top 10 bonus recipients at the American International Group were giving back their bonuses.

He also said 15 of the largest 20 bonus recipients in A.I.G.’s financial products division had agreed to give back the money, for a total that he estimated at about $30 million. “Those bonuses will be returned in full,” Mr. Cuomo said during a conference call with reporters.

The attorney general noted that about 47 percent of $165 million in retention bonuses was awarded to Americans, accounting for nearly $80 million. All told, Mr. Cuomo said, A.I.G. employees have agreed to return about $50 million in bonuses. - New York Times

I have to say that the folks at AIG that gave the money back deserve a pat on the back but I’m sure they already know that. Doing what is right makes sense even if you worked your ass off to earn the bonuses. It’s fair to say that not everyone at AIG was a corrupt idiot out to make a fast buck but the public perception is what it is. All it takes is a few bad apples and the pie tastes like crap.

As far as the rest of the public showmanship in Washington goes, it needs to continue to reign in the rest of corporate America that thinks they can take part in their own little corporate crusade and think that it will not have dire circumstances down the road. Washington will never tax one business to the extent they were going to tax the AIG bonuses because the big money political machines will never buy it. Do you think for a minute that the executives at Exxon, GE, Dupont, and the like would stand still while the door was pushed wide open on taxing their future personal profits and gains? Not likely.

Thank you Memeorandum for the tip…

Papamoka

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White Collar Wall Street Crime

Just to get a comedic perspective on all of the Wall Street criminals run rampant, Jon Stewart’s guest Larry Wilmore offers his opinion in this little piece that I laughed my butt off over…

Video Link

The Daily Show With Jon Stewart	M - Th 11p / 10c
The New White Face of Crime
comedycentral.com
Daily Show Full Episodes Important Things w/ Demetri Martin Political Humor

You just have to love the Daily Show on Comedy Central. Too damn funny! Don’t you find it ironic that everyone in the Main Stream Media (MSM) took Jon Stewart as a real life reporter on ripping Jim Cramer of CNBC a new ass? Now that was classic journalism comedy! Loved it!!!

Papamoka

Republican Slight of Hand

Hello Papamoka Readers! The news lately has been filled with both Republicans and Democrats screaming bloody murder over the completely unjust bonuses being paid by AIG. I agree there have been lots of mistakes made and that everything should be done to stop those payments, however, I also believe the right wing is driving the scandal to distract from the more important reforms.

Republicans haven't had a lot to crow about lately, so they're thrilled the Democrats dropped the ball involving something as controversial as bonus payouts to failing Wall Street bankers. Sure, AIG under the Obama Administration should have seen this coming, but it's still a GOP distraction.

The GOP operatives pushing this scandal are only interested in political gain. It's a scandal within a scandal. They are conveniently ignoring the fact that Bush and Paulson paid the first installment without any congressional involvement and without excluding bonuses the same way, because they too were afraid of employee lawsuits. Subsequent Capitol Hill and Treasury negotiators were also concerned about employee lawsuits. They were worried about increasing liabilities, something lawmakers care a lot about these days. They all had bigger fish to fry.

That's at the heart of the matter, yet nobody seems to have the balls to talk about it. It's all about politics now, and the Republican spin machine is doing its best to strum the last Democratic nerve. The only thing the Republicans are concerned about is a "gotcha" moment, and the Democrats on Capitol Hill are falling for it all hook, line and sinker. Only President Obama has had the nerve to take responsibility while asking us to focus on the big picture. I agree with him. Let's do it!

The AIG Financial Products Corporation, which is now being dismantled by government appointed executives, is the real scandal. The bonuses are horrible, but the real story is why the financial products division of AIG ever came into existence. Let's not forget the regulatory changes led by Senator Phil Gramm of Texas, Newt Gingrich, and the rest of the Republican Congress during the waning days of the Clinton Administration started this national nightmare. They know it, but for some reason rank and file Republicans ignore it, and average Americans never talk about it.

Sure, Clinton signed it under extreme pressure, and he was wrong to do it, but the real culprits were the Republicans who destroyed the walls that stood between banks, speculative investment brokerage firms, insurance companies, and the rest. Those protections were put in place after things went horribly wrong during the last Republican depression. They were designed to manage greed, PROTECT the free market from its darker side, and in the end keep the wolves out of the hen house. It was the REPUBLICANS WHO DESTROYED IT!

Of course, their deregulation was made worse by the fact that regulators were undermined by the Bush Administration. Oversight was weak at best. The Bush Administration was without a doubt a REACTIVE regulator. They didn't believe in the protections. They didn't do their job. I don't care what my right wing readers say, the Bush Administration could have done more to prevent the crisis. They had the data, they knew about AIG and the $50 TRILLION plus DERIVATIVES market, and they knew about the risk to the whole economy. They did NOTHING! They were at least negligent, and at worst conspiratorial.

My dinner party debates always feature a Republican blaming Congressman Barney Frank, Senator Christopher Dodd, and the usual Democrats for not reigning in Freddie Mac and Fannie Mae. What they never admit is how the Bush Administration had the authority, through dozens of regulatory agencies, to reign in the risk across the board. Many economists feel that most administrations would have done so. It was the Bush Administration, along with the Republican belief in small and unobtrusive government, that failed the American people.

Therefore, let's be angry about the greed on Wall Street, but I think it's more important to keep our eyes on the prize. Let's make sure the Democrats and the Obama Administration do everything necessary to reverse the regulatory changes that allowed the Bush Administration to look the other way. Let's FORCE future Republicans to regulate the risk by creating strong and principled new laws.

Let's reform until we can't reform any more. AIG is the critical patient that needs to be isolated and treated, but it's the Republicans and their broken philosophies about government and the market that represent the deadly contagion. Let's find a vaccine and a cure! Let's make sure we never become victims of their greed and stupidity again.

Michael Boh
Papamoka's Left Coast Contributor
from Our Rants & Raves Blog

Fannie and Freddie Paying Bonuses Too

Everyone pull your pants pockets inside out to show Fannie Mae and Freddie Mac that all we have left is pocket lint. Just when the bon fires over AIG are starting to roar, the good folks over at Fannie and Freddie are passing out “Retention” bonuses. Yahoo News and the AP have an interesting piece on it…

This makes no sense to me but you know how them pesky bankers are, they charge you a hefty overdraft fee when you already didn’t have enough money to have the check clear in the first place.

The good folks in the government need to clarify what the term “Retention Bonus” really means. Yesterday on the news they had one congressman drilling AIG CEO Liddy on this practice and he asked one very pertinent question that left Liddy sputtering like Porky Pig. Paraphrasing - “You mean to tell me that with all the layoffs on Wall Street, you can not find anyone qualified to do the same jobs as these people?” Good point Congressman, very good point. As for having to pay “Retention Bonuses” to the very people responsible for the business collapse is frankly idiotic and unethical. I’m pretty sure that anyone is replaceable in any job in America. President Obama or Timmy Geithner could walk down to Wall Street today and put up a help wanted sign for AIG, Fannie, and Freddie and I’m pretty sure a long line of applicants would begin to build. Even without the promise of bonuses!

A few years back I worked for a privately owned manufacturing company that for almost thirty years in a row paid a profit sharing bonus of fifteen percent of your annual gross pay. As long as the company was profitable, employees worked hard, watched out for waste and cost savings then the payments would continue. Long story short, the owner eventually retired and sold the company to a conglomerate where the stock price and quarterly profit were the live by standard. The new owners ran the company on stocks and leveraged the company down the drain. Profit sharing disappeared for the most part with all of the additional executive salaries that were piled on top of the companies bottom line. Ten years after they bought it, the doors to an 800,000 square foot plant were closed and what was once lifetime jobs for some four hundred people were gone.

My point to my little story is this, it wasn’t the people running the machines in the plant that caused its failure, it wasn’t the people in the offices answering the phones or buying the raw materials that caused the failure, it wasn’t even the plant manager or even the general managers fault that the plant failed. It was pure greed from the executives and junior executives that didn’t even have an office at the company that brought about its demise. They had no sense of pride or ownership in the company because all the company was to them was a number on the quarterly profit statement.

Papamoka

AIG Greed Surpasses Common Sense

AIG took in a huge bailout amount of money from the government which also means you the taxpayer signed part of that check to AIG. AIG is still loosing tens of millions of dollars a month and yet they feel the need to once again reward the staff responsible for the companies original collapse with mega bonuses! I live in the real world and if you screw up so bad that it hurts the company, you loose your job, you get a pink slip, or you simply get fired for gross negligence. Over at AIG they give you a mega bonus for sinking the company because their lawyers say they have too? That is the latest excuse for the latest round of “Screw you America, we are AIG” bonuses about to be handed out. Just a hint for ya, these will not be the last bonuses for these under performers either. $173 Billion in taxpayer money is now part of a bonus program instilled by failure and lawyer speak.

Not for nothing, I would prefer our government give bailouts to industries that actually produce a product other than an insurance firm mired in failure. Detroit and its auto plants could use some serious investment capital, the steel industry could use a serious helping hand, the textile industry could use some research and development money too. I won’t even think about how much the farming industry in America could use a helping hand of this magnitude. Nope, one company that doesn’t make a damn tangible thing received $173 Billion dollars in bailout cash.

CEO Edward Liddy of AIG sent this letter to Treasury Secretary Geithner and Fire Dog Lake has a copy if you want to see it. He was defending why AIG had to pay out a half billion in bonuses. Chalk this response from Liddy up to a mega OOOPs.

Over at the Wall Street Journal they have this little tid bit on AIG and the bonuses…

March 15,2009
AIG to Pay $450 Million in Bonuses

American International Group Inc. will pay $450 million in bonuses to employees in its financial products unit. That division was at the heart of AIG's collapse last fall, which compelled the U.S. government to provide $173.3 billion in aid to keep it running.

Chief Executive Edward Liddy told Treasury Secretary Timothy Geithner in a letter dated Saturday that the next payments to employees of the financial products unit -- whose woes caused massive losses at the giant insurer -- are due on Sunday, and added "quite frankly, AIG's hands are tied." - Wall Street Journal

I’m finding myself with no sympathy for AIG or its survival in the business community. Maybe, just maybe, some of the folks on the right side of the aisle are right in letting these people face bankruptcy court. $173 Billion in bailout cash and they are handing out almost a half billion in bonuses? If General Motors or Chrysler pulled this crap then all of Washington would be at the CEO’s throat politically. AIG is no stranger to having its hand out for money and then blowing hundreds of thousands of dollars for its employees for perks. Can I site a few for you?

AIG Splurges Again
AIG Bailout Smack in the Face

When do we say that AIG is no better than a drug dealer on the corner just sucking the life blood out of our people? When do we say enough is enough when that drug dealer starts feeding your children the poison that could kill them? When do we say enough is enough when the government feeds the poison to that drug dealer and all it is in the end is bailout cash? AIG is no better than a simple drug dealer with a clientele that needs them. When they tell everyone around them, including the government that has fed them $173 billion dollars in bailout cash, that they will still do whatever they want to, regardless of what you or I think, then enough is enough. Bankruptcy court is not always a bad thing when the abusers of the business that is bigger than life community run shot gun over corporate abuse and idiocy and then defend it blindly.

You may think at this point think that I sound like a die hard fiscal conservative Republican but you would be wrong. I’m just a Dad thinking that $173 billion could have been better spent fixing roads, schools, bridges and investing in our communities where real life happens. In one report AIG averaged the bonuses out to $120,000 per person and that is one hell of a lot more than most people make in a year. And that is just the bonus for failure in your job at AIG that put the company in a position near collapse. What ever happened to common sense in big business? Apparently, Edward Liddy, aka CEO has no future in stock options when it comes to his time spent at AIG. Failure and rewarding that failure is not common sense to those that once had shares in AIG.

President Obama should sick his Attorney General, Secretary of the Treasury, and the FBI on AIG, its Board of Directors, and its CEO for simple gross negligence. AKA hand them a pink slip for doing a real crappy job. Something stinks over at AIG but this is all just my opinion. What do you think is going on?

One thing is certain when this wash load at AIG is done, many of the corporate executives across America will look at Ed Liddy and learn from his mistakes. You don't take cash out of the taxpayers pockets without serious repercussions and simplistic results. Ed Liddy will or should resign within the next couple of months as AIG's CEO. If he doesn't, he will be indited for fraud and multiple other charges. I'm pretty sure that no corporation wants the IRS to put a magnifying glass on their books.

Most states are receiving bailout money just in the tens of billions of dollars to rebuild our economy, AIG grabbed $176 BILLION with no questions asked under President BUSH and is passing out bonuses?

Shouldn't you be pissed off too?

Papamoka

AIG Splurges… AGAIN!

AIG is begging the government for another $40 billion and yet they are out partying it up and still splurging like thier corporation has a bottomless checking account. While most companies in the same position as AIG would be cutting spending, reducing staff, and basically gutting the corporate budget, AIG executives are having the time of their lives. Over at ABC News they have this to say about the latest AIG spendathon…

Another AIG Resort "Junket": Top Execs Caught on Tape

KNXV Discovers $343,000 Secret Gathering, AIG Signs and Logos Hidden

By BRIAN ROSS and JOSEPH RHEE
November 10, 2008

Even as the company was pleading the federal government for another $40 billion dollars in loans, AIG sent top executives to a secret gathering at a luxury resort in Phoenix last week.

Brian Ross investigates the insurance giant's "seminar" at a posh resort.

Reporters for abc15.com (KNXV) caught the AIG executives on hidden cameras poolside and leaving the spa at the Pointe Hilton Squaw Peak Resort, despite apparent efforts by the company to disguise its involvement.

"AIG made significant efforts to disguise the conference, making sure there were no AIG logos or signs anywhere on the property," KNXV reported.

A hotel employee told KNXV reporter Josh Bernstein, "We can't even say the word [AIG]." - ABC News

It takes some audacity to beg for cash with one hand and pass out hundred dollar bills with the other. We covered the first smack in the face to taxpayers back on October 8th. That little party cost AIG almost $500,000 at a posh hotel in Monarch Beach California.

You can check out the confrontational video from the reporters on this issue with the top executives here.

Papamoka

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AIG Bailout Smack in the Face

It took less than a week for the bailout plan to slap Joe Taxpayer (formerly Joe Sixpack before AA) in the face. I think we all knew that you can not hand a blank check to an industry that prides itself on million dollar bonuses and golden parachutes that would make royalty blush.

Over at AIG they went and threw a party for their top performers after they drew off almost $61 Billion from the government bailout of AIG. Somehow the executives over at AIG thought it was wise to blow almost $500,000 for a party on the U.S. Taxpayers dime just one week ago! Over at the Washington Post they have this on the topic…

AIG Gets More Government Bailout Cash

Only one day after it was revealed that AIG had sprung for a $440,000 spa vacation shortly after getting an $84 billion government-loan bailout comes this report: The government is loaning AIG another $38 billion.

AIG, the world's largest insurer, said it has already drawn down $61 billion on its $84 billion line of credit from the government. AIG's financial products division got into the mortgage-backed securities market and incurred billions in losses, sending the entire company teetering toward bankruptcy. The $84 billion loan was meant to help prop up AIG.

During a hearing before the House Oversight committee on Tuesday, it was revealed that just last week, about 70 of the company's top performers were rewarded with a week-long stay at the luxury St. Regis Resort in Monarch Beach, Calif., where they ran up a tab of $440,000, The Post's Peter Whoriskey reported today.

Snip n Hold on to your wallet…

Today, AIG chief executive Edward Liddy defended the vacation by pouring gasoline on the fire.

Such trips "are standard practice in our industry," Liddy said, no doubt thrilling every other major insurance company. - Washington Post

You would think that the Treasury Department or even the office of the Attorney General would be pouncing on this abuse but they probably won’t. Big boys will be big boys! Nope, now the treasury is going to need to loan AIG another $38 Billion so they can pay the bar tab for these top performers in the company that would have gone belly up?

President Bush should be ripped! No, that would be out of character for him when this sort of blatant abuse happens. I’m sure somebody at the White House is pissed and I’m laying bets on the woman that answers the mail for the under secretary of we don’t give a damn department.

Papamoka

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McCain Flips on AIG Bailout

Would the real John McCain please stand up? At the beginning of this week he was against any bailouts for any companies on Wall Street and by mid week he is all for it. Prior to this week he wanted less regulation on Wall Street and now he is for over regulating Wall Street. Somebody please point out who the real John McCain is for me? ABC News has this great report that is up on You Tube for you to judge for yourself…

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I’m not sure but it looks to me like somebody erased the red R at the end of John McCain’s name and penciled in a blue D? On most city busses it says to “Watch Your Step” as you exit the bus, over at the McCain Straight Talk Express bus it must say “Tuck and Roll” because this bus has no scheduled principal stops.

After watching several broadcasts on financial news about the current crisis it is evident that the nations financial institutions are in a serious free fall. This is not the end of the financial crisis either according to most analysts but it is getting close to the end. Next stop WaMU! I'm thinking that the Anti Regulation Maverick of yesterday has some responsibility for this mess but you will never hear that out of his mouth. Tuck and roll…

Papamoka