Blogged the other day: AIG, Your Bonus Plan Is Obscene!
AIG can argue their justification to pay the bonus due to contract obligations but let's think for a moment.
Without the tax payers bailout money, would AIG have any money to pay these bonus out?
Yes?
Whose money is this, huh?
And since it's the tax payers money, they damn right have an excuse to be piss like hell on what is happening!!
It's simply ludicrous and scandalous!!!
And to all you AIG employees, are you even ashamed of what your utterly disgusting greed?
And one of the better developments is Congress vows to tax back AIG bonuses
- WASHINGTON — Democratic leaders in the U.S. Congress, brimming with anger over $165 million U.S. in bonuses paid to executives at American Insurance Group, vowed Tuesday to recover the funds with a special tax unless recipients returned the money voluntarily.
Senator Harry Reid, the Democratic majority leader, said lawmakers plan to introduce legislation as early as Wednesday to claw back up to 90 per cent of the retention bonuses awarded to employees at the giant U.S. financial company, which has received more than $170 billion in federal assistance to stay afloat.
"When a child breaks his curfew, he should get grounded. When someone commits a crime, he should be punished. And when an employee brings his company and our economy to the brink, he's not rewarded with multimillion dollar bonuses paid by the taxpayers," Reid told reporters on Capitol Hill.
In a letter to AIG executives, congressional Democrats asked the company to renegotiate the bonuses and said refusal to co-operate would be met with "severe tax penalties."
New York Senator Chuck Schumer, in a speech on the Senate floor, said: "We plan to tax virtually all of it. To those of you getting these bonuses: be forewarned, you will not be getting to keep them."
The tax ultimatum came amid new revelations that the bonuses included payments exceeding $1 million each to 73 top AIG employees. The controversy has become so heated that one conservative Republican senator, Iowa's Charles Grassley, suggested the AIG bonus recipients commit suicide out of shame.
AIG executives need to follow the "Japanese example and come before the American people and take that deep bow and say, 'I'm sorry,' and then either do one of two things: resign or go commit suicide," Grassley told a radio station in Cedar Rapids, Iowa.
AIG spokesman Nick Ashooh called Grassley's remark "very disappointing." The GOP senator on Tuesday explained his comment was "rhetoric," and said that his preferred option was to use taxes to recoup the bonuses.
"From my standpoint, it's irresponsible for corporations to give bonuses, at this time, when they're sucking the tit of the taxpayer," Grassley said.
Congress has had its sights trained on AIG since last fall when it received $85 billion in emergency loans from the Federal Reserve — the first of several bailout instalments. It was later learned the company paid for executives to take a $440,000 corporate spa retreat, and an $86,000 partridge hunting expedition, even as the firm was being rescued from collapse.
The company recorded a $61.7 billion loss in the fourth quarter of 2008, amid fallout from the collapse of its business in risky financial derivatives such as credit-default swaps.
In a letter Tuesday to congressional Democrats, New York state Attorney-General Andrew Cuomo revealed that 73 employees of AIG's financial products unit — the division responsible for the bulk of the company's losses — had been rewarded with bonuses in excess of $1 million.
The top seven bonus recipients received cheques of more than $4 million each, while 22 executives were paid of $2 million or more. The top payment was $6.4 million. Of those employees who received more than $1 million in "retention" bonuses, 11 are no longer working for AIG.
AIG says it was legally bound to pay the bonuses because of contracts negotiated before the company received aid from U.S. taxpayers. But the company's lawyers failed to recognize "it is only by the grace of American taxpayers that members of Financial Products even have jobs, let alone a pool of retention bonus money," Cuomo said.
Outstanding questions about how the bonuses were negotiated will be the focus of a congressional hearing on Wednesday, when lawmakers will question AIG's chief executive officer, Edward Liddy, about the payments.
At the same time, the Obama administration is facing growing scrutiny as critics questioned whether Treasury Secretary Timothy Geithner did too little to try to scuttle the bonuses before they were disclosed publicly last weekend.
After learning of the pending bonuses, Geithner sought to negotiate reductions with AIG executives, but ultimately agreed the company was legally bound to make the payment. President Barack Obama has since instructed Geithner to explore "all legal avenues" to block the bonuses.
"What I want to ask, where was the secretary of the Treasury before this money was paid out?" asked Senator Richard Shelby, the ranking Republican on the Senate banking committee. "He either knew or should have known about what was going on (because) Treasury is deeply involved in this bailout."
White House press secretary Robert Gibbs said later Tuesday that Obama continues to have "complete confidence" in Geithner.
In addition to planning legislation specifically taxing the AIG bonuses, Democrats are also weighing a broader bill to impose a surtax on all bonuses paid to Wall Street firms receiving a federal bailout. One proposal would place a 60 per cent tax on bonuses exceeding $10,000 at companies in which the government has more than a 79 per cent equity stake. Currently, only AIG meets that threshold.
Taxpayers vent against AIG bonuse
- For many Americans who could use a bailout just to balance their checkbooks and make it through the month, the thought of their tax dollars going to million-dollar bonuses for AIG executives is enough to make them furious.
"It's difficult to comprehend how screwing up gets you rewards," said George Padilla, a teacher in El Paso, Texas. "I tell my students that if they don't put in the effort and get passing grades, I will not pass them." He added: "I use the old `In the real world ...' line to point out that you would be fired if you didn't do well in your job. Well, I guess `the real world' proved me wrong."
Workers, business owners and taxpayers interviewed across the country this week fumed over the $165 million payout, with some questioning whether the government should even be in the business of bailing out Wall Street — an attitude that could dangerously undermine further efforts by the Obama administration to prop up the economy.
"Wasn't Obama supposed to fix this?" said Maria Panza-Villa, a mother of two in Hillsboro, Ore. She said she has lost three jobs since November as one employer after another folded.
The intensity of the populist fury became plain when a member of the Senate, Iowa Republican Charles Grassley, actually suggested AIG executives should follow the Japanese warrior example and resign or commit suicide.
While many ordinary Americans said Grassley's comments were out of line, others weren't so sure.
AIG executives are "not going to bleed to death because I'm not sure that they've got blood. I think it's ice water that runs through their veins," said Gary Jarvis of Herron, Ill., who lost his job as a forklift driver in a factory closing two years ago. "To me, it's just stunning to think they're not even ashamed of their disgusting greed."
AIG — teetering on the brink of collapse because it insured many of the toxic mortgage-backed securities at the vortex of the financial crisis — has mostly been an unknown quantity to the general public, in part because its business is so complex.
But paying bonuses to people responsible for nearly bringing the company, and the economy, to its knees may be even more incomprehensible to nearly anyone who runs a business or tries to balance a household budget.
Among those frustrated is Everette Clark, mayor of Marion, a town of about 7,000 in western North Carolina. The town has one of the highest unemployment rates in the state, at 12.2 percent.
Marion's biggest industries, textiles and furniture, have shed thousands of jobs over the last few years. The people who used to work in those plants are struggling to pay their bills without any kind of a bailout or bonus.
Giving tax dollars to AIG to pay bonuses is "atrocious," Clark said. "You don't reward people in the private sector for doing a bad job."
David Ziegler, a long-distance trucker finishing breakfast at the Mother Load Diner in the old gold mining town of Idaho Springs, Colo., said the AIG bonuses had convinced him that the U.S. should stop bailouts altogether.
"I don't think they should be pumping more money to AIG. I don't think they should flush any more money down the Citibank toilet. I don't think they should flush any more money down any of these toilets. Tell them to 'sink or swim,'" said Ziegler, who is from Thornton, Colo.
Others interviewed were reluctant to place political blame and signaled continued support for efforts to fix the economy.
"We've created this mess. Everyone's responsible for allowing executives to receive these bonuses," said George Ayoub of Toronto, Canada, an American who was visiting Los Angeles. "Probably every company needs to be nationalized, and the government will own the corporations instead of the corporations owning the government."
Tess Beauchamp, 58, owns Stein's Coffee House, a small restaurant in Lubbock, Texas. She understands the insurance business, having worked for years in maritime coverage as a broker for fleets of ships. But that does not make her inclined to cut AIG any slack.
"I think this country has a serious problem with executive entitlement," Beauchamp said as she awaited the arrival of Tuesday's lunch crowd. "I think it's outrageous. I think this country could stand a redistribution of wealth and not to AIG executives or corporate execs, for that matter."
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