White House, Congress knew AIG was planning to pay bonuses

What taxes, confiscate all of them as ilegal earnings.

They should be allowed to keep the money on condition they invest 100% of it in the stock market, where they gambled with their investors' money. Just desserts!

No because if they reinvest and it gains, then they made money. < :-)

Get on with the show trials...

Democrats - criminal or incompetent?

"While the Senate was constructing the $787 billion stimulus last month, [Senator] Dodd [Democrat - Conn.] added an executive-compensation restriction to the bill. That amendment provides an 'exception for contractually obligated bonuses agreed on before Feb. 11, 2009' — which exempts the very AIG bonuses Dodd and others are now seeking to tax...Separately, Sen. Dodd was AIG’s largest single recipient of campaign donations during the 2008 election cycle with $103,100, according to opensecrets.org."

http://www.foxbusiness.com/story/markets/industries/finance/dodd-cracks-aig---time/

Perhaps the angry Democrats should ask themselves why they provided the bailout with no strings attached.

when the Gov writes out blank checks things like this happen.

Perhaps the angry Democrats should ask themselves why they provided the bailout with no strings attached.

Yes. They got suckered by Chicken Little who declared the sky was falling and something had to be done so quickly that there would be no time for strings. Sadly, its not the first time Chicken Little fooled Congress into such a move. And Congressman do not want to admit they got fooled again. (That is if they were not actually part of the scheme.) Chicken Little is back home in Texas in case you were wondering.

Round all 73 of them up, hand-cuff them to their $1 million bonus bags in front of an angry mob of people who have lost both home and jobs and then, let them run for their lives!

Perhaps the angry Democrats should ask themselves why they provided the bailout with no strings attached.

Excellent point. The bail-out politicians can be next.

It seems that nothing makes a Democrat senator more angry than being exposed. As in, the emperor and his entourage have no clothes.

The truth is out, the Democratic political party represents nothing less than the most fraudulent and criminal aspects of Wall Street. How to hide that now? Never mind. The answer lies in the well trained media.

What tricks of eloquence we will see in the hours and days ahead. But really, how long before the same brutal reality that is storming through the front door of so many homes, foreclosure notice in hand, overwhelms the big fib. The two party political fraud is now bust wide open, it just remains for the majority to actually see it.

Little Timmy Geithner has a lot to answer for, seeing as he was involved in the original bailout under the Bush administration as well.

This one happened under Obama's watch, so he'd better get it sorted quick.

Sarge - "Perhaps the angry Democrats should ask themselves why they provided the bailout with no strings attached."

They didn't. Bush and the Republicans doled out at least $270 billion with no strings attached in the dying days of the last administration.

And you, along with rollonarte, didn't say anything.

Why, Sarge, why did you encourage incompetence?

If a company needs tax dollars for a bail out, then compensation should reflect their modest status of beggar company. No bonus payments, reduced salaries for high paid execs and fines for those responsible for running their company into the ground. Jail time for any actions that were knowingly dangerous to the stability of the institution.

But we also have to blame ourselves for allowing deregulation to give these guys a free reign. Anyone who thinks capitalism is self adjusting is delusional. Greed has no bounds and no common sense. I see this in the financial world where I do a lot of business all the time. Arrogance, self importance, greed, pride, short sightedness and insensitivity define the people who caused this problem. And they still don't get it! Even now they behave like want to be gods waiting for the world to admire them.

Just look at their adds. "Investing is Art" no investing is BUSINESS. Art is art. Art requires the presence of a soul. Something clearly missing from most of the elite capitalist world.

To hell with these guys. Take back the money and put the scum bags in prison for incompetence and graft.

Why not just deduct the cost of the bonuses from the bailout amount AIG (and others) get?

Sarge at 09:00 AM JST - 18th March

Perhaps the angry Democrats should ask themselves why they provided the bailout with no strings attached.

Sarge,

The bailout with no strings for AIG was part of the Bush bailout. They got their money before Obama was even President. Thanks to the Bush Treasury Secretary (he was a complete idiot, watch the hearings) No rules, no documentation, no nothing. It is not the Democrats recent bailout, which is why the Obama stimulus packages have rules attached to their package. It is also the reason why the Republican are complaining about Obama's stimuli because they can't just spend anyway they like. They want the money like Bush did it. They want free money from the government without oversight but the Republicans don't socialism. hmmmm....

Republicans mentality: My s@#% is stuff, and your stuff is s*^%.

By the way, keep in mind here quite apart from the issue of what the bonus payouts to CEOS are supposed to be actually awarding them for, there is the underlying issue that the money is being supplied by the American people from their tax, i.e. the bailouts the Obama administration continues to push through. These bailouts are never ending. They are getting bigger as well. Interesting to compare what is going on now with what happened during the last great depression. And I am taking it for granted this is a depression at this point in time.

While President Obama throws money to the Corporations (the real interests he and the Democrats and Republicans serve, by the way) President Roosevelt threw money into ginormous public work schemes to kick the economy back to life. But throwing money into the capitalist system that is in a state of collapse is akin to force feeding alcohol to an alcoholic in the blind hope that will get them back on their feet.

Roosevelt's New Deal failed to extract America from the dire economic downturn it was in during the 1930's. The only thing that got America out of that depression was a rapid and massive ramping up of production for the war effort. In a word, World War 2. It was America's entrance into World War 2 and its incredibly massive industrial capability that saw it wear down its enemies and finally ensure the allied victory.

Of course, these days a World War would not last as long and it is highly doubtful there would be a world left that would be worth dividing up amongst the victors. Still, it seems this is the hope of those elites that continue to fund the War on Terror. That they can benefit financially from these conflicts without them turning into conflagrations that consume America and its allies. That is a very dangerous game.

Obama is staunchly in favor of the War on Terror, and continues to play for the larger goals set down during the Bush administration's time in office. This financial crises is nothing but an appetizer to what is to come. History tends to follow the same general routes. The players may appear to change but the forces behind them, if you look closely, remain largely the same.

The anger Obama demonstrates over the declaration by AIG that it will honor its contractual obligations to pay bonuses, is Obama's own obligatory act, the one he must be seen to perform. The illusion must be maintained. If you want to know who is really benefiting from all of this, I mean the truth behind all of this, look to the actions behind the words and gestures. Look to the money trail. Where does the money really go?

The outlook for the world remains grim, so long as people fail to see what is really happening. The only people that actually KNOW the truth, are those that benefit most from the policies of the Obama administration, and most likely also those that have suffered most directly as a result, i.e. those who have lost their jobs and suffered foreclosures on the home and property.

Why not just deduct the cost of the bonuses from the bailout amount AIG (and others) get?

So the execs get their bonuses, then come back saying "we need more money or the whole financial system blows up"?

I reckon everyone who supported Bush's no-conditions bailout - that'd be Sarge and rollonarte, etc. should be billed at least $20,000 out of their own wallets for going along with such utter recklessness and not blowing the whistle.

Funny thing is, it wouldn't be the first time, and probably not the last. :-)

This headline and story are so slanted.

While the Senate constructed the $787 billion stimulus last month, it was Democratic Senator Christopher Dodd who unexpectedly added an amendment providing an “exception for contractually obligated bonuses agreed on before Feb. 11, 2009,” which exempts the very AIG bonuses Dodd and others are now seeking to tax after the fallout. The Dodd amendment is in the final version and is law.

Senator Dodd was AIG’s largest single recipient of campaign donations during the 2008 election cycle with $103,100.

Treasury Secretary Geitner was the head of the New York Federal Reserve while the intitial bailout was crafted. His failure to inform Obama of the bonuses until this week would warrant his termination. However, the Obama Administration is in a duck and cover mode and continues to muddle on.

Suzu1 - if what you say about Dem. senator Christopher Dodd is correct, he should be sacked in my view.

what a title. the writer of this article should be fired.

Everyone: Yes, the no-strings bailout IDEA came from the Bush Administration. But as far as I know, the Democratically elected Congress APPROVED it. Can anyone contradict or verify that simple statement? Do I have to engage in a fact-finding mission to prove this?

It seems to me that both Republicans and Democrats are guilty in this one, one way or another. So everyone should have some humility and see that it was not a party that failed us. It was our leaders on both sides. Our leaders. A majority of them. Until everyone gets on that page, we are lost.

skipthesong, sorry to be pedantic, but if only 2 democrats are angry about the AIG bailout, the title is accurate.

Everyone: Yes, the no-strings bailout IDEA came from the Bush Administration. But as far as I know, the Democratically elected Congress APPROVED it." Likeitis seems to be one of only a few correct posters here, along with Suzu.

One thing that is not being said is that while the bail out was given out under Bush, let's face reality that it was during the election. A catch 22 and Nancy was right there demanding and accusing that Bush wants the economy to fail.

But this is the real kicker that people like Sushi just doesn't seem to get as posted by the honorable likeitis: "It was our leaders on both sides. Our leaders. A majority of them. Until everyone gets on that page, we are lost."

As much as I hate tattoos, many on this post should get the above on their chests

The whole thing was put together at the 11th hour. It was Hank Paulson who did all the talking for the GWB administration. As Treasury Secy, he set up an Office of Financial Stability filled by his own appointees to handle the book-keeping aspects of the bailout. There was no public accountability and that made many leery in addition to the fact Uncle Sam had no experience taking over the financial sector.

Fast forward to the present: It sure doesn't look like it was anything more than direct deposit into the checking account and wait five days for the check to clear as far as conditions were concerned.

I still cannot wrap my head around these contractually obligated bonuses. Some bonuses are actually a fixed part of salaries, and should be termed as salaries. Naturally you expect those to be paid. However, with the amounts involved, if anyone believes the danger is/was real, I would think the executives would sacrifice them readily, if they have any sense of goodwill and cooperation.

The other kind of bonus is the kind awarded by the company based on things like employee performance and what profits the company has. These kinds of bonuses are easily brushed aside and I can't them as being contractually bound. Therefore, it must be the first kind of bonus, that is actually a salary, no?

If so, I cannot see any wrongdoing. But the distribution of the money is CERTAINLY crapping all over the spirit of goodwill and is reprehensible in the extreme. Therefore, I do not mind taxing those execs to the hilt. Tit for tat.

I still cannot wrap my head around these contractually obligated bonuses. Some bonuses are actually a fixed part of salaries, and should be termed as salaries"

According to my friend who is working there, he said that a lot of the bonuses were for sales commissions. Sales brought in equals salary plus commissions regardless how the company's overall performance is. Additionally, a lot of this money is not just for individuals, but for banks and securities companies who staff busted their butts to get some sales. Unfortunately, the top of AIG screwed things up and the doo doo rolled down hill.

Yeah it's a sound market, there's no need for alarm, the market is strong. Remember those words being said over and over again by the last administration? Then like overnight, the president wanted $700Billion given out with absolutely no guidelines at all.

But it's Obama's fault.

Yeah Obama did inherit what the republicans so conveniently forget.

That's all right. Cry republicans. Barack Obama will fix what george bush allowed and camoflaged.

Did you hear about the housing growth. The DOW is rising. Obama is slowly starting to fix things. < :-)

Did you hear about the housing growth. The DOW is rising. Obama is slowly starting to fix things.

That is neither to the fault or credit of this nor the previous administration, unless you believe in bailouts. In that case you must credit Bush. Sorry, but that is the way it is. Don't get caught up in the trap that the far righties of this board set. (I admit you might just be playing with them.)

But it still does not absolve Bush's fault in the creation of the mess in the first place, nor all the other crap he did. As usual, it is/was ten steps back and two steps forward.

What I'm getting at is all the crying by the reoublicans and their hopes of failure for the Obama administration and there these upturns in the economy. It's a start. < :-)

Normally I don't find Jonah Goldberg's LA Times column particularly compelling, but he had some good points today:

What signal does it send when the president and Congress make it very clear that they will revisit legal contracts that run afoul of populist outrage? Already, many banks that have received bailout money are returning it -- or trying to -- because the political strings attached hinder them against competitors. Worse, the highly politicized climate requires financial firms to become dependent on the whims of Washington, which can't help thaw out frozen credit markets, particularly when Geithner has yet to explain what his actual policy will be.

The problem is there's nobody with cleans hands in Washington which has become a company town in which too many people profit off government rather than "serving the people." This feeds public dissatisfaction with Congress where both parties are trying to channel populist outrage while cognizant of where it can lead (outlined well by Goldberg).

You would have to be nuts to work for AIG now. If you did a great job and reduced their loss (and the taxpayers' loss) from $166 billion to $165 billion, not only do the politicians think you should not be rewarded, but that senile buffoon, Grassley, thinks you should kill yourself.

There's $1.6 trillion of liabilities still on AIG's books. If they are not properly handled, they will turn into $1.6 trillion of losses - 10 times the current loss. If compensation policies are handled by politicians by soundbites, the good people will leave and the incompetents (not a small group at AIG) will be left to deal with the liablities.

“Wasn’t Obama supposed to fix this?” asked the mother of two who said she has lost three jobs since November as one employer after another went under.

What's all this Obama alone stuff... did not occur that the Administation, Congress and other officals have been racking their brain 24/7 to derive ideas to help motivate and stimulate the US and get support from the citizens....but of course if it were she ... she would have all the answers and America would be saved...

People really need to close their mouths if they have nothing to contribute to what's been going on... I may be wrong but I think she voted for the wrong President because this on is trying to consider ALL sides even if the outcome will failt he U.S. I would have so socked that lady...

seems like likeitis is slamming everyone today. He's on fire.

aday: the dow is raising; housing growth....." well, by all means, keep throwing money into it.. buy a house, or two or three... actually, I half welcome this collapse.

Grassley may want to rethink his admiration for Asian displays of public contrition because the custom also extends to elected officials. I don't recall anyone in Congress apologizing for playing a part in creating the mess.

The AIG execs have become a popular scapegoat which enables people to avoid looking within. Too many Americans lived beyond their means and ended up deeply in hock as evidenced by underwater mortgages and hefty credit card balances which also contributed to the credit crunch.

aday: Here's a confidence builder for you: "We always are at pains to recognize when we talk to the president that economic forecasting is the most imperfect of sciences," said Summers. "Many people would say it wasn't a science at all. We stress the uncertainties in this situation."

this is good news to me for the short. But if you got medium or long term......

Larry Summers suggested that if Treasury Secretary Timothy Geithner had pushed the insurance giant too hard on the bonuses, AIG could have collapsed just like Lehman Brothers and sparked an even bigger crisis." Hmm.... so they knew it before we knew it

Asked whether AIG could get more bailout funds down the road, Summers suggested the door is open to more taxpayer money, despite the bonus controversy." Close your eyes and spend away. Click your heels three times..... I'm gonna make a rap song!

she voted for the wrong President because this on is trying to consider ALL sides even if the outcome will failt he U.S

Talk about blind adoration. If "ALL sides" are being considered, they sure are not being considered equally. You just need to follow the money trail and see where that ends up. Sure, supposedly it is an investment in the future where the economy is supposed to come right way up again, and everyone is dancing in the streets on their way to employment and owning their own homes once more. But just look at the facts.

The most glaring one is this. The very same people that got us to where we are today are being put in charge of where we are going to be tomorrow! Do you realize that the kind of economic measures this administration is prescribing to the US to right the economy are the very same ones that America lectured the rest of the world against taking over the past 40 years when countries, like Argentina, for one glaring example, was looking for loans to get itself at of its own massive recession?

What makes this president anymore convincing than any of the last 16 up to and including President Woodrow Wilson? Everyone of those administrations put in place economic policies that led up until this very moment. Does anyone really think the saviour has arrived in the Whitehouse?

If he has, and President Obama is he, than he is an anomaly.

The senator told the AIG traders to do suicide. Why would they? These people have no concept of responsibility, doing a crappy job and still receiving performance bonuses. Wow! The finance industry bubble sure stacked the companies full of overpaid ding-dongs. I know many Tokyo Lehman people, they are bloody useless.

skipthesong I'm sure that you do welcome an economical collapse. So I guess you'd like the the recession to turn into a depression and you can sit there and blame Obama. Well, I have better hopes for America then you do.

I just love hearing the republicans wish for failure. Too bad you're goint to be disappointed. Obama will be a success no matter what the party of "NO" hopes and prays for. < :-)

Isn't political grandstanding great? This is a storm in a tea cup in the finest traditions of politics. Given the fluidity of the financial services industry, these folks will either get paid this money (and probably taxed for it accordingly), or AIG will do an about face in the face of this political onslaught. If this happens, the next step will be a talent exodus from AIG to some other financial institution that has a much lower profile (where similar incentives will be offered). It is just the nature of the business.

If AIG was smart, it would do some deals with its employees to pay these bonuses at sometime in the future, once the political shxtstorm has abatted and it is not hooked like a junky on taxpayer money. Then again, the avarice of the employees probably will not allow this to occur.

It would be nice to know the names of the current executive staff at AIG. That way, when they collect their "retention bonus" and jump ship, we can keep an eye out for them, when and if they show up at another company.

have AIG declared enemies of the state freeze all the domestic/offshore assets & holdings of all of it's executives place them all in detention (indefinitely) at guantanomo bay, pending trial (which will never happen) wait and see if other financial institutions have the cojones to repeat the actions of AIG repeat steps 1-4 whenever necessary

aday: skipthesong I'm sure that you do welcome an economical collapse. So I guess you'd like the the recession to turn into a depression and you can sit there and blame Obama." No aday, I am scared as hell. Investments are not paying out what I was told they were. But, once they go up again, because I sure as heck can't sell any nor back out now, I'll be taxed at a higher rate on any gains (the nerve of the gov). But, considering with my bothers to purchase a whopping bunch of houses in hopes tht things will turn around. That's why I want things to CRASH! Get it?

you can't continually look to blame one man, when many of the people of the past admin are still there and they are covering their butts and you are buying into it. I, unlike, am not blaming Obama one bit. I am however, blaming a whole lot of dems, cross over politicians, government service providers, etc...

Even the title of this post is influencing you like you were a grade school kid.

Also, who really pushed this bail out to move as quick as it did and who has been out there promoting bankruptcy?

Who even knew of the bonuses to be paid and still gave it out?

C'mon. I ain't got anything against you, but yo....

aday: I don't want Obama to fail as much as several dems had publicly stated they wanted Bush to fail, even on the very morning of 9-11!!!!! Now, who was that?

And yhou know what, if the government were to hand me a bunch of money, I'd take it without looking back and I know, so would all of you.

You think they ain't got money? They played all of us.

Even before he was Treasury Secretary - when he was still head of the New York Federal Reserve - Geithner was so deeply involved in the government's bail out of Bear Stearns, its take over of Fannie Mae and Freddie Mac, and its bailout of AIG that this was the Washington Post's headline from September 19, 2008:

"In the Crucible of Crisis, Paulson, Bernanke and Geithner Forge a Committee of Three".

" For months, the Obama administration and members of Congress have known that insurance giant AIG was getting ready"

Months would mean more than 2. He was inagurated on the 20th of Jan. It's March the 18th.

Heh, but I'm sure it will help whip the JT radicals in a frenzy on bth sides...

Cramer was right - with Obama and Co it's Amateur Hour as we head towards the darkest moments.

So much for Obama and his "change." What a joke. Obama, and America with him, are finished.

Shameless. No conscience, no compass. The consummate Democrat:

"Senator Barack Obama received a $101,332 bonus from American International Group in the form of political contributions according to Opensecrets.org. The two biggest Congressional recipients of bonuses from the A.I.G. are - Senators Chris Dodd and Senator Barack Obama."

http://www.examiner.com/x-268-Right-Side-Politics-Examiner~y2009m3d17-Obama-Received-a-101332-Bonus-from-AIG

Rather than follow Grassley's advice, what the AIG execs should do is return the bonuses voluntarily to demonstrate they, along with much of the rest of America, can make do with less in these hard times.

In California, where I live, state government offices are on rolling furlough status. That means if it's Friday, the DMV must be closed. State employees have accepted a reduced paycheck, whatever the contractual obligations of their employer, because the state's coffers have run dry.

"what the AIG execs should do is return the bonuses voluntarily to demonstrate they, along with much of the rest of America, can make do with less in these hard times."

My thoughts exactly. They should at least be named and hounded by the American gutter press.

Madverts,

Patriotism as defined by the Right revealed: put partisan interests ahead of the nation's. I can remember in 2004, after GWB's reelections, being admonished "we don't want our party's success to be built on national failure." That's kinda what happened, on it's own though.

"put partisan interests ahead of the nation's"

They're amazing, aren't they? The poster who's name we can't mention is actively hoping for his own president to fail, whilst secretly yearning for a terror attack on US soil to blame it on President Obama.

And they still consider themselves to "patriots".

I don't believe AIG has released any information about how these bonuses have been calculated. Where I work, there's an elaborate system of points awarded for each performance standard met or exceeded.

Without that information, the taxpayers, who are picking up the tab for these bonuses, must accept on faith that employees are deserving. My faith has been severely tested over the past six months as revelation after revelation emerged about the reckless manner in Wall Street managed invested funds.

what the AIG execs should do is return the bonuses voluntarily to demonstrate they, along with much of the rest of America, can make do with less in these hard times"

Would you? With the market looking the way it has been, I sure wouldn't. Besides, its not they stole money. They are getting the cash legally, whether you like it or not. I however, am jealous.

AIG deserves the bounus money. The wealthy are society's most productive citizens and shouldn't be punished. The poor would become wealthy too if they just worked harder.

If this was a reward for a job well done it might be reasonable. But these are "retention bonuses" for the same fools who put AIG (and, supposedly, the whole financial system) on the brink of the abyss. They ought to have been sacked, not rewarded.

Yeah, I am very jealous. Most of us could retire in comfort on what these chumps are getting in one bonus. Not only would I like the cash I would love a job where I could screw up completely and still get paid!

AIG deserves the bounus money. The wealthy are society's most productive citizens and shouldn't be punished. The poor would become wealthy too if they just worked harder.

how would you explain anomalies such as paris hilton, oh wise one? just in what way is someone like her "productive". you need to look up concepts such as nepotism if you truly believe the worlds wealthy deserve to be that way

you might want to read up about a recent case such as bernard madoff, a fabulously wealthy unproductive criminal

I find it ironic that the same people who are outraged (Obama, Congress) had the chance to put conditions on the bailouts in a bill By Rep. Kucinich last year but refused to do so. Now they whine and moan about it, the idiots.

This is sort of like the NY Yankees when they come in last in their division. -->Except with them they would fire damn near everyone. Here they are keeping the losing team on and giving them bonuses.

-Socialism at its' finest.

Besides, its not they stole money.

Actually, they sold insurance with neither the ability to or the intention to pay the insurance holders if the insured against event happened. They were just gambling that it wouldn't happen. That is fraud, not insurance. They've been stealing the money for years.

They've been stealing the money for years.

What are talking about? Stealing then was called business and a freebie now called a bail-out........ These guys are as sharp as you can get.

And we all are stuck with the bill, can I put this crap to help AIG out on my maxed out CREDIT CARD to help the economy?

Seems fair, after all that is the example Obama is setting in his 'change'.

I and many others are feeling that it would have been better to just let AIG fail -the banks (that AIG insured) would have had to been bailed out (and have been bailed out) anyways.

-This is a quasi-corrupt company that should not be in business and the SEC needs to start regulating securities/stocks again.

Shameful, but many of these failed policies started in Washington D.C. (which by the way also has the highest % of people with AIDS -they are a health failure also). I don't understand how a capital city can continually underperform.

Most of us could retire in comfort on what these chumps are getting in one bonus.

Speak for yourself there, bud, I intend to live high on the hog.

This keeps saying that Geithner only learned about these bonuses recently. And yet, he was former Treasury secretary Poulsons aide in the Treasury department, the one responsible for handling the AIG mess. I have a hard time believing that he didn't know about this well in advance. Before Obama even came into office, or he took his new job. Despite what this article claims, its simply unreasonable to assume that the man responsible for AIG from the Treasury wasn't aware of what was happening.

The situation has the White House ... on the defensive.

We'll be seeing a lot of that during the next four years.

So, for Obama to act all outraged about something that his own Administration put into the law that Democrats passed and he signed......

Oh, the hypocrisy.

President Obama's administration worked this whole deal out with the Senate. It was their idea to allow the bonuses and specifically put it in the stimulus bill. The stimulus was rushed through and no one in Congress was given time to read it. Well, if the public found out about the AIG bonuses then it would have caused an unroar. No, Obama is not 'really' outraged. He and his people specifically asked for the bonus provision. This is all an act.