AIG Chairman Edward Liddy testified before Congress today.
Liddy claimed he knew about the bonuses issued this week in late October or early November 2008.
Those upcoming bonuses were disclosed in November 2008. (In fact Bloomberg reported on this fact on November 26, 2008 – noting that AIG had simply changed the name of the payouts from “bonuses” to “retention payments” http://www.bloomberg.com/apps/news?pid=20601087&sid=a_ejZRBkZ2Rc&refer=home ).
In fact, the bonuses are sepcifically listed in the original “bailout documents signed by AIG and the Treasury Department on November 9, 2008.
In Early February 2009 Congress considered the latest of fthe AIG bailouts and the “Stimulus Bill”. In the original language of the legislation passed by the Senate there was a provision, authored by Senator Snow, that specifically precluded “bonus” or “retention” payments by any company receiving “bailout cash”. THE BILL PASSED BY THE SENATE PRECLUDED BONUS OR RETENTION PAYMENTS.
Subsequent to the Senate passage a “closed door” meeting was held at the White House where White House Staff and Democratic Leaders from both the Senate and the House “removed” the language prohibiting the “Bonus/Retention” payments from the bill and replaced the prohibiting language with language that specifically “grandfathered” or allowed any bonus/retention payment negotiated prior to February 11, 2009. This language was specifically crafted to allow the AIG bonuses. The change in language has been named “the Dodd Amendment”, after Democratic Senator Chris Dodd, by the Obama Administration.
In an unbelievable act of hypocrisy Obama, the Treasury Department and the Democrats in Congress are now claim surprise and outrage that the payments have been made and claim they are furious over the fact that bonuses were paid – the very bonuses they allowed through a behind closed doors amendment. Senator Dodd has now stated these facts are true, however, Senator Dodd insists that the “Amendment” was crafted at the direction of the Treasury Department.
Prior to Treasury Secretary Geitner’s appointment to his current post, he worked at the New York Office of the Federal reserve where his responsibilities included the oversight of AIG’s buisiness activities.