AIG Bonus Flap – Administration Emails Document Discussions In November 2008

 Treasury officials proposed limiting annual bonuses for all employees of American International Group in November, as they were negotiating the government’s first investment in the troubled firm, according to a document obtained by FOX Business.

In a Nov. 5 e-mail to a Treasury and Federal Reserve officials, an outside attorney working on the transaction wrote, “We indicated that UST (United States Treasury) … wants to put in place a limitation on annual bonuses that assure that (AIG) executives/employees will not be enriched out of TARP funds.”

But the e-mail indicates AIG officials pushed back on the proposal. In a section of the e-mail discussing proposed limits on severance packages for AIG employees, the attorney wrote, “They were slack jawed at the idea of imposing the restriction throughout the entire population, especially worldwide.” AIG proposed that Treasury apply such limits “to a class of partners and senior partners (700).”

At another spot in the e-mail, the attorney said about AIG executives, “They will think about ways to deal with the ‘no enrichment’ point. In this connection they again raised the size of the applicable group and kept coming back to ‘700’ as a meaningful, and possibly workable, group for limitations.”

The e-mail also indicates that in their deliberations, government officials were concerned about the effect of compensation on recruiting and retaining AIG employees.

“We also indicated that all parties understand that the restrictions must be designed so that the business can be operated in a reasonable way, including in terms of recruitment and retention of employees,” the attorney wrote in the e-mail.

A key argument in AIG’s defense of its bonus practices has been that bonuses are needed to recruit and retain key employees.

A Treasury official in the department’s general counsel office, Stephen Albrecht, wrote in response to the attorney’s e-mail, “See below. Looks like AIG has some creative thinking to do, but we’ll need to decide to what extent we’re willing to bend.”

Government officials eventually decided to restrict compensation at AIG to just the top 75 company executives. The Treasury agreed to invest $40 billion into AIG.

Congress is considering legislation to limit bonuses at AIG after the company and Treasury disclosed it paid $165 million in 2008 bonuses last week to 400 employees at the AIG’s financial products unit, the division that nearly put the company into bankruptcy last year because it sold insurance coverage on risky securities held by other financial firms.

The Treasury and Fed have committed more than $170 billion to AIG as it seeks to restructure and sell assets. The latest version of the bailout includes a Treasury commitment to invest another $30 billion in the company. AIG has not tapped the funds yet. Treasury officials say they are negotiating tougher limits on bonuses as a condition for dispensing it.

http://www.foxbusiness.com/story/markets/industries/finance/exclusive-treasury-officials-proposed-limiting-bonuses-aig/

AIG Bonuses Engineered By White House & Treasury – Claims Senator Dodd

AIG Bonuses – Senator Dodd Changes Story – Admits White House & Treasury Engineered Bonuses For AIG

White House -Treasury Officials Engineered AIG Bonuses Reports Salon Magazine

The attempt to blame Dodd is based on a patently false claim that was first fed to The New York Times on Saturday by an “administration official” granted anonymity by Times reporters Edmund Andrew and Peter Baker (in violation, as usual, of the NYT anonymity policy, since all the official was doing was disseminating pro-administration spin) The accusation against Dodd is that there is nothing the Obama administration can do about the AIG bonus payments because Dodd inserted a clause into the stimulus bill which exempted executive compensation agreements entered into before February, 2009 from the compensation limits imposed on firms receiving bailout funds.  Thus, this accusation asserts, it was Dodd’s amendment which explicitly allowed firms like AIG to make bonus payments that were promised before the stimulus bill was enacted. [Lets not ignore the fact that Dodd obviously agreed to the Amendment and until the recent fire storm, never raised a single objection to the demanded changes]

That is simply not what happened.  What actually happened is the opposite.  It was Dodd who did everything possible — including writing and advocating for an amendment — which would have applied the limitations on executive compensation to all bailout-receiving firms, including AIG, and applied it to all future bonus payments without regard to when those payments were promised.  But it was Tim Geithner and  Larry Summers who openly criticized Dodd’s proposal at the time and insisted that those limitations should apply only to future compensation contracts, not ones that already existed.  The exemption for already existing compensation agreements — the exact provision that is now protecting the AIG bonus payments — was inserted at the White House’s insistence and over Dodd’s objections.  But now that a political scandal has erupted over these payments, the White House is trying to deflect blame from itself and heap it all on Chris Dodd by claiming that it was Dodd who was responsible for that exemption. [Exactly how hard did Dodd argue – the prohibition mentioned in this article was not authored by Dodd as reported, it was authored by Senator Snow (see below) – that language – language prohibiting bonuses/retention payments was stricken in “behind closed door” meetings at the White House without any public debate or review – This statement is clearly a self serving alibi for Dodd. He, Dodd, is now attempting to spread the blame to those who should rightly share it with him – The White House the Treasury and the Democratically controlled Congress that rammed the legislation through without adequate review or debate]
At that same time, The Hill reported that “President Obama and the chairman of the Senate Banking Committee [Dodd] are at odds on how to rein in the salaries of top executives whose companies are being propped up by the federal government” and that “most of the administration’s concern stems from the Dodd’s move to trump Obama’s compensation provisions by seeking more aggressive restrictions.”  Let’s repeat that:  the Obama administration was complaining because the compensation restrictions Dodd wanted were too “aggressive.”
Now the Obama administration is feeding reporters the accusation that it was Dodd who was responsible for the exemptions that protected already-vested bonuses.   The Times article from Saturday that started the Dodd scandal thus contains this outrageously misleading claim:
The administration official said the Treasury Department did its own legal analysis and concluded that those contracts could not be broken. The official noted that even a provision recently pushed through Congress by Senator Christopher J. Dodd, a Connecticut Democrat, had an exemption for such bonus agreements already in place. And yet another New York Times article from today (“Fingers Are Pointed Across Washington Over Bonuses”) — this one by David Herszenhorn — contains this White-House-mimicking, misleading passage: “But Mr. Reid mostly ducked a question about whether Democrats had missed an opportunity to prevent the bonuses because of a clause in the economic stimulus bill, part of an amendment by Senator Christopher J. Dodd, Democrat of Connecticut, that imposed limits on executive compensation and bonuses but made an exception for pre-existing employment contracts.”
That was the exact provision that Geithner and Summers demanded and that Dodd opposed.  And even after Dodd finally gave in to Treasury’s demands, he continued to support an amendment from Ron Wyden and Olympia Snowe to impose fines on bailout-receiving companies which paid executive bonuses (which was stripped from the bill at the last minute).  But now that Treasury officials are desperate to heap the blame on others for what they did, they’re running to gullible, mindless journalists and feeding them the storyline that it was Dodd who was responsible for these provisions.  And today, during his White House Press Conference, Robert Gibbs advanced this dishonest attack by repeatedly describing the offending provisions as the “the Dodd compensation requirements.
“Rather oddly, the NYT article I quoted above, by David Herzsenhorn, has been moved on the NYT site and is now at this link (see here).  Most importantly, it has been re-written to reflect that fact that it was not Dodd who inserted the exception for past contracts:
In the place of the Herzsenorn article is now this article by Jackie Calmes and Louise Story that also includes the Dodd version of events:
Something in the last couple of hours caused The New York Times to change the way it is reporting this matter so that it is no longer mindlessly reciting the false White House attempt to blame Dodd for the bonus exemption, but instead is at least including a version of the truth.  http://www.salon.com/opinion/greenwald/2009/03/17/dodd/
The specific terms, amounts and dates of the bonus/retention payments were made known to the White House and Treasury Department on 11/09/2008 – Those disclosures were made in the original AIG bailout agreement signed by AIG and the Treasury Department on that date. Claims to the contrary are simply false.

 hypocrisy  – hy⋅poc⋅ri⋅sy – 

1. a pretense of having a virtuous character, moral or religious beliefs or principles, etc., that one does not really possess.

2. a pretense of having some desirable or publicly approved attitude.

3. an act or instance of hypocrisy.

Origin: Greek – play acting, to play a part.   1. See deceit.

 

 

 

AIG Bonus Backlash – Politicians Fake Indignation

As the American Public becomes outraged over an additional set of Executive Bonuses at AIG and the Governemnt continues to break its promise of “transparency” on how our tax dollars are being spent -what are the Democrats in Washington doing?

They are lying to the American people, again and again and again.

Obama’s top economic advisor, Larry Summers, called the bonuses and retention payments “outrageous”. http://blogs.abcnews.com/george/2009/03/summers-on-aig.html . On Sunday, Summers, Chairman of the White House National Economic Council, said, “”There are a lot of terrible things that have happened in the last 18 months, but what’s happened at AIG is the most outrageous.”  Gee, you might think he didn’t know the bonuses were coming. That he hadn’t been told about tthe payments in advance, months in advance. Did you know that 11 of the Executives who will receive $1 Million plus “retention payments” have already left their employment with AIG? http://www.usnews.com/articles/news/politics/2009/03/17/aig-bonus-checks-may-be-taxed-at-up-to-100-says-sen-chuck-schumer.html

In a phone call Wednesday to AIG CEO Edward Liddy, Treasury Secretary Timothy Geithner said it was unacceptable for the company to give out tens of millions of dollars in bonuses for senior executives after the government committed $180 billion to keep the struggling company afloat. http://blogs.abcnews.com/george/2009/03/summers-on-aig.html. Gee, one might think that Timmy Geitner hadn’t received advance notice of the payouts, the specifics in fact, of whom, where and how much. The information supplied in detail by AIG months ago.

Obama even chimed in pledging to “pursue every legal avenue” to get AIG to roll back the $165 million in bonuses.  http://www.bloomberg.com/apps/news?pid=20601068&sid=aGpBlzh8xoXY&refer=economy  Harsh language to use towards one of his biggest political contributors, specially in light of the fact that his Administration was fully informed, in advance, of the upcoming bonuses and even supported Democratic Senator Dodd’s amendments to protect these payouts. (The Obama Administration now refers to the Amendments as the “Dodd Amendments”).

So now Obama, after having had advance notice of the bonuses, pledges to “pursue every legal avenue” to get AIG to roll back the $165 million in bonuses As if he, Obama, a Harvard trained Attorney, doesn’t know the attempt has no legal basis, already. First year law students all over the Country must be rolling their eyes back in their heads after hearing this. Political spin is one thing, but why not be straight with the American public and stop the blatant lies. Didn’t the President previously call such bonuses “shameful” and promise to eliminate them.  http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=102×3713683 Then why didn’t he do so when he had the chance? 

If you remember the President’s past empty promises in this regard and thought they had become law prior to the last two AIG Bailouts (the 3rd and 4th) – you’d be wrong.

Politico reports the following today, 03/17/09, ”The furor over bailed-out insurance giant AIG is adding urgency to President Barack Obama’s longtime plan to tighten regulations on financial firms, with an administration plan now set for unveiling next week.” http://www.politico.com/news/stories/0309/20089.html

I am one of many who recall the President telling all of America that this was a done deal. A deal signed, sealed and previously sold to the American people as delivered. No more “bonuses”, no more “perks”, caps on “compensation”.

“The plans will take shape at a hearing by House Financial Services Committee Chairman Barney Frank (D-Mass.), who will take the lead on the complex, heavily lobbied issue.”  http://www.politico.com/news/stories/0309/20089.html

Just what the American Public needs, another “secret plan” to be developed over the next several months and then poorly implemented by this Administration. Reminds me of the highly touted “bank stress test” that was being developed behind closed doors – a test whose specifics have never been released for public review.  Remember the “new stress test” was not to be confused with the standard “stress test” previously employed by the Treasury Department.

Democrats, who have an overwhelming majority in Congress and who, despite their attempts to blame Bush – were the party to pass not only the first bailout bill, but the second, third and forth, not to mention the passage of a stimulus package 0f $700 Million and that nearly $4 trillion dollar budget bill. In total the Democrats have spent nearly $9 Trillion Dollars – an amount that could pay, in round numbers, $79,000 to every family in this Country.  

Now the Democrats pretend to be outraged! Why is that?  They knew the bonuses were coming months ago.

Why the sudden political farse over a miserly $450 Million in bonuses and retention payments for employees who may no longer work at AIG. (After all we are not talking billions or trillions here). http://www.foxbusiness.com/story/markets/industries/finance/dodd-cracks-aig—time/

Simply put – the Congress is blowing smoke in your eyes and up your ***. Congressional actions claiming that the AIG bonuses will be taken back in “special tax laws” are solely intended to mislead the public. Any such attempt will be found to be unconstitutional and end up costing the American Taxpayers, not only the bonus money but Attorneys fees, Court costs and interest when the aggrieved AIG employees demonstrate just how silly such an action would be at the closest available Court House. In a few days, after the Democrats believe they have bought all the available “cover” they can muster over this travesty, they will quietly let the idea of a “special” and “discriminatory” tax die.  http://www.usnews.com/articles/news/politics/2009/03/17/aig-bonus-checks-may-be-taxed-at-up-to-100-says-sen-chuck-schumer.html  

Just how far does this obfuscation go? Lets examine Senator Dodd, Democrat, Connecticut. Dodd is one of the Democrats in Congress calling for a the enactment of what would be a discriminatory tax against AIG employees. http://www.usnews.com/articles/news/politics/2009/03/17/aig-bonus-checks-may-be-taxed-at-up-to-100-says-sen-chuck-schumer.html  

Doesn’t Dodd know such action would be struck down as discriminatory? Of course he does. If he did not he would not be fit to hold his office, would he?  Then why is he raising such a fuss over such a non-starter of an idea. (I’m sure the Senate research staff is scratching their heads and saying, “they suggested what?’). Dodd is trying to deflect the public from noticing that he, himself, opened the door for these very bonuses.  

The proof of cuch a claim – right here. Dodd’s office recently announced that, “Democratic Sen. Chris Dodd, chairman of the Senate banking committee, demanded a full briefing from the Federal Reserve and the Treasury on why clauses weren’t attached to the four various AIG bailouts to halt bonuses.” http://www.usnews.com/articles/news/politics/2009/03/17/aig-bonus-checks-may-be-taxed-at-up-to-100-says-sen-chuck . Yet the Senator well knows that while the Senate was constructing the $787 billion stimulus last month, Dodd added an executive-compensation restriction to that very bill. The provision, now called “the Dodd Amendment” by the Obama Administration, 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. http://www.foxbusiness.com/story/markets/industries/finance/dodd-cracks-aig—time/

Obama & Dodd Were Friend’s Of AIG Before AIG Was Their Enemy

Obama may be grandstanding about AIG’s bonuses now, but it’s worth noting that Obama himself is the second biggest benefactor of AIG political contributions.  Second only to Senator Chris Dodd, who is quietly trying to tip-toe away from legislation he inserted into Obama’s “stimulus” spending spree that protected AIG’s bonuses. http://www.kxmb.com/News/Nation/346030.asp

“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.” The A.I.G. Financial Products affiliate of AIG. gave out $136,928, the most of any AIG affiliate, in the 2008 cycle.  I would note that AIG’s financial products division is the unit that wrote trillions of dollars worth of credit-default swaps and “misjudged” the risk. http://www.kxmb.com/News/Nation/346030.asp

On Monday, Obama lambasted the insurance giant for “recklessness and greed” and pledged to try to block payment of the bonuses. http://www.canadianbusiness.com/markets/headline_news/article.jsp?content=D96VUNH00&page=2&cb=0  Gee, I wonder if Obama will return the AIG political contributions in the same way he returned convicted felon Tony Rezko’s contributions after they became public knowledge?

Why are the Politicians acting surprised now?

China’s Xinhua News Agency Reports that, “However, the bonuses for AIG executives were paid legally, part of a program that had been disclosed in advance in filings that the insurer made with the government, the U.S. media reported. Sharp questions have been raised about what the administration knew about the bonuses, and when.”   http://news.xinhuanet.com/english/2009-03/18/content_11028286.htm

How is it that the major American News organizations did not lead with this story on tonight’s news broadcasts. Bloomberg reorted on these payments last December, “Dec. 4 (Bloomberg) — American International Group Inc., whose bonuses and perks drew fire from lawmakers after the insurer accepted a federal bailout, will make special retention payments that more than double the salaries of some senior managers, according to a person familiar with the matter.

Some executives among 130 recipients will get more than $500,000, about 200 percent of their salaries, to stay through 2009, said the person, who declined to be named because the information hasn’t been publicly disclosed. An undetermined number of lower-paid employees will also get cash awards to dissuade them from quitting, the person said.” http://www.bloomberg.com/apps/news?pid=20601087&sid=aGf.YgVHEPYQ&refer=home  

This article appeared months prior to Senator Dodd’s “amendment” that specifically allowed for the bonuses he now “rants about.

The publication “Canadian Business” reports, “The bonuses were paid under legal contracts, part of a program that had been disclosed in advance filings that American International Group Inc. made with the government.” http://www.canadianbusiness.com/markets/headline_news/article.jsp?content=D96VUNH00

The Article is titled, “Democrats threaten strong action to recoup AIG bonuses through new taxes”. The article highlights the idle nature of the Democratic threats. Specifically, the publication noted that, “Even though AIG’s bonus plans were disclosed last year, outrage and threats poured forth from Capitol Hill on Tuesday.”  Does the word hypocrisy come to mind?http://www.canadianbusiness.com/markets/headline_news/article.jsp?content=D96VUNH00

These very same Politicians who now pretend outrage knew of these planned bonuses and retention payments 6 months ago. Why Senator Dodd authored the amendment that protected these very payments! The White House was kept fully informed by the Senator’s staff.

UPDATE – Senator Dodd Admits He Knew About Change In Bonus Language Prohibition – Blames Obama White House And Treasury Department For Change

hypocrite (definition)

 

1. a person who pretends to have virtues, moral or religious beliefs, principles, etc., that he or she does not actually possess, esp. a person whose actions belie stated beliefs.
2. a person who feigns some desirable or publicly approved attitude, esp. one whose private life, opinions, or statements belie his or her public statements.Origin: From the Greek Language –  a stage actor, hence one who pretends to be what he is not

As an additional note: Did you know that an alternative amendment was offered to the one authored and passed by Senator Dodd and the Democrats, however, the Democrats lack of bi-partisanship prevailed. ”Republicans said Democratic leaders last month killed a plan that would have forced financial institutions to compensate taxpayers if they paid their executives large bonuses after receiving federal bailout money. Sen. Olympia Snowe, R-Maine, a co-sponsor of the amendment to Obama’s stimulus bill, said striking it “left open an escape hatch of golden parachutes for top executives on Wall Street.” Snow is one of the Republican Senators to consistently cross party lines to support Obama’s initiatives.” http://news.aol.com/article/congress-threatens-to-tax-aig-executives/386132

AOL news also reports that, “Though AIG’s bonus plans were disclosed last year, Congress’ outrage and threats have begun pouring forth only recently.” http://news.aol.com/article/congress-threatens-to-tax-aig-executives/386132

So despite the fact that Democrats in Congress new, since last fall, that 73 AIG executives were to be paid in excess of $1 Million in bonuses (11 no longer work for the company) and that certain Executives would receive multi-million dollar bonuses, nothing was done. Well almost nothing was done – Senator Dodd authored and the Democrats passed an amendment that protected these bonuses.

Now that the facts have become public the political theatre has started.

AIG POLITICAL CONTRIBUTIONS IN 2008

Democrats   $442,996                Republicans    $142,792           Independents   $0        Total: $442,926

House of Representatives:                # of Members                      Ave Amount               Total Amount

Dems                                                                        34                                             $3,069                                $104,350

Reps                                                                          21                                              $1,223                                     $25,693

Senate

Dems                                                                       18                                              $17,906                                 $322,322

Reps                                                                         15                                               $6,816                                    $102,249

Senator Chris Dodd   $103.100

Senator Barack Obama $101,332                      

Obama and Dodd received $204,000 of the $443,000 in total political contributions made by AIG last year – almost half of the total amount spent by AIG.  http://www.foxbusiness.com/story/markets/industries/finance/dodd-cracks-aig—time/

AIG Bonuses – Obama & Dodd Fake Indignation – Administration Had Advanced Notice Of Bonuses

As the American Public becomes outraged over an additional set of Executive Bonuses at AIG and the Governemnt continues to break its promise of “transparency” on how our tax dollars are being spent -what are the Democrats in Washington doing?

They are lying to the American people, again and again and again.

Obama’s top economic advisor, Larry Summers, called the bonuses and retention payments “outrageous”. http://blogs.abcnews.com/george/2009/03/summers-on-aig.html . On Sunday, Summers, Chairman of the White House National Economic Council, said, “”There are a lot of terrible things that have happened in the last 18 months, but what’s happened at AIG is the most outrageous.”  Gee, you might think he didn’t know the bonuses were coming. That he hadn’t been told about tthe payments in advance, months in advance. Did you know that 11 of the Executives who will receive $1 Million plus “retention payments” have already left their employment with AIG? http://www.usnews.com/articles/news/politics/2009/03/17/aig-bonus-checks-may-be-taxed-at-up-to-100-says-sen-chuck-schumer.html

In a phone call Wednesday to AIG CEO Edward Liddy, Treasury Secretary Timothy Geithner said it was unacceptable for the company to give out tens of millions of dollars in bonuses for senior executives after the government committed $180 billion to keep the struggling company afloat. http://blogs.abcnews.com/george/2009/03/summers-on-aig.html. Gee, one might think that Timmy Geitner hadn’t received advance notice of the payouts, the specifics in fact, of whom, where and how much. The information supplied in detail by AIG months ago.

Obama even chimed in pledging to “pursue every legal avenue” to get AIG to roll back the $165 million in bonuses.  http://www.bloomberg.com/apps/news?pid=20601068&sid=aGpBlzh8xoXY&refer=economy  Harsh language to use towards one of his biggest political contributors, specially in light of the fact that his Administration was fully informed, in advance, of the upcoming bonuses and even supported Democratic Senator Dodd’s amendments to protect these payouts. (The Obama Administration now refers to the Amendments as the “Dodd Amendments”).

So now Obama, after having had advance notice of the bonuses, pledges to “pursue every legal avenue” to get AIG to roll back the $165 million in bonuses As if he, Obama, a Harvard trained Attorney, doesn’t know the attempt has no legal basis, already. First year law students all over the Country must be rolling their eyes back in their heads after hearing this. Political spin is one thing, but why not be straight with the American public and stop the blatant lies. Didn’t the President previously call such bonuses “shameful” and promise to eliminate them.  http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=102×3713683 Then why didn’t he do so when he had the chance? 

If you remember the President’s past empty promises in this regard and thought they had become law prior to the last two AIG Bailouts (the 3rd and 4th) – you’d be wrong.

Politico reports the following today, 03/17/09, ”The furor over bailed-out insurance giant AIG is adding urgency to President Barack Obama’s longtime plan to tighten regulations on financial firms, with an administration plan now set for unveiling next week.” http://www.politico.com/news/stories/0309/20089.html

I am one of many who recall the President telling all of America that this was a done deal. A deal signed, sealed and previously sold to the American people as delivered. No more “bonuses”, no more “perks”, caps on “compensation”.

“The plans will take shape at a hearing by House Financial Services Committee Chairman Barney Frank (D-Mass.), who will take the lead on the complex, heavily lobbied issue.”  http://www.politico.com/news/stories/0309/20089.html

Just what the American Public needs, another “secret plan” to be developed over the next several months and then poorly implemented by this Administration. Reminds me of the highly touted “bank stress test” that was being developed behind closed doors – a test whose specifics have never been released for public review.  Remember the “new stress test” was not to be confused with the standard “stress test” previously employed by the Treasury Department.

Democrats, who have an overwhelming majority in Congress and who, despite their attempts to blame Bush – were the party to pass not only the first bailout bill, but the second, third and forth, not to mention the passage of a stimulus package 0f $700 Million and that nearly $4 trillion dollar budget bill. In total the Democrats have spent nearly $9 Trillion Dollars – an amount that could pay, in round numbers, $79,000 to every family in this Country.  

Now the Democrats pretend to be outraged! Why is that?  They knew the bonuses were coming months ago.

Why the sudden political farse over a miserly $450 Million in bonuses and retention payments for employees who may no longer work at AIG. (After all we are not talking billions or trillions here). http://www.foxbusiness.com/story/markets/industries/finance/dodd-cracks-aig—time/

Simply put – the Congress is blowing smoke in your eyes and up your ***. Congressional actions claiming that the AIG bonuses will be taken back in “special tax laws” are solely intended to mislead the public. Any such attempt will be found to be unconstitutional and end up costing the American Taxpayers, not only the bonus money but Attorneys fees, Court costs and interest when the aggrieved AIG employees demonstrate just how silly such an action would be at the closest available Court House. In a few days, after the Democrats believe they have bought all the available “cover” they can muster over this travesty, they will quietly let the idea of a “special” and “discriminatory” tax die.  http://www.usnews.com/articles/news/politics/2009/03/17/aig-bonus-checks-may-be-taxed-at-up-to-100-says-sen-chuck-schumer.html  

Just how far does this obfuscation go? Lets examine Senator Dodd, Democrat, Connecticut. Dodd is one of the Democrats in Congress calling for a the enactment of what would be a discriminatory tax against AIG employees. http://www.usnews.com/articles/news/politics/2009/03/17/aig-bonus-checks-may-be-taxed-at-up-to-100-says-sen-chuck-schumer.html  

Doesn’t Dodd know such action would be struck down as discriminatory? Of course he does. If he did not he would not be fit to hold his office, would he?  Then why is he raising such a fuss over such a non-starter of an idea. (I’m sure the Senate research staff is scratching their heads and saying, “they suggested what?’). Dodd is trying to deflect the public from noticing that he, himself, opened the door for these very bonuses.  

The proof of cuch a claim – right here. Dodd’s office recently announced that, “Democratic Sen. Chris Dodd, chairman of the Senate banking committee, demanded a full briefing from the Federal Reserve and the Treasury on why clauses weren’t attached to the four various AIG bailouts to halt bonuses.” http://www.usnews.com/articles/news/politics/2009/03/17/aig-bonus-checks-may-be-taxed-at-up-to-100-says-sen-chuck . Yet the Senator well knows that while the Senate was constructing the $787 billion stimulus last month, Dodd added an executive-compensation restriction to that very bill. The provision, now called “the Dodd Amendment” by the Obama Administration, 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. http://www.foxbusiness.com/story/markets/industries/finance/dodd-cracks-aig—time/

Obama & Dodd Were Friend’s Of AIG Before AIG Was Their Enemy

Obama may be grandstanding about AIG’s bonuses now, but it’s worth noting that Obama himself is the second biggest benefactor of AIG political contributions.  Second only to Senator Chris Dodd, who is quietly trying to tip-toe away from legislation he inserted into Obama’s “stimulus” spending spree that protected AIG’s bonuses. http://www.kxmb.com/News/Nation/346030.asp

“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.” The A.I.G. Financial Products affiliate of AIG. gave out $136,928, the most of any AIG affiliate, in the 2008 cycle.  I would note that AIG’s financial products division is the unit that wrote trillions of dollars worth of credit-default swaps and “misjudged” the risk. http://www.kxmb.com/News/Nation/346030.asp

On Monday, Obama lambasted the insurance giant for “recklessness and greed” and pledged to try to block payment of the bonuses. http://www.canadianbusiness.com/markets/headline_news/article.jsp?content=D96VUNH00&page=2&cb=0  Gee, I wonder if Obama will return the AIG political contributions in the same way he returned convicted felon Tony Rezko’s contributions after they became public knowledge?

Why are the Politicians acting surprised now?

China’s Xinhua News Agency Reports that, “However, the bonuses for AIG executives were paid legally, part of a program that had been disclosed in advance in filings that the insurer made with the government, the U.S. media reported. Sharp questions have been raised about what the administration knew about the bonuses, and when.”   http://news.xinhuanet.com/english/2009-03/18/content_11028286.htm

How is it that the major American News organizations did not lead with this story on tonight’s news broadcasts. Bloomberg reorted on these payments last December, “Dec. 4 (Bloomberg) — American International Group Inc., whose bonuses and perks drew fire from lawmakers after the insurer accepted a federal bailout, will make special retention payments that more than double the salaries of some senior managers, according to a person familiar with the matter.

Some executives among 130 recipients will get more than $500,000, about 200 percent of their salaries, to stay through 2009, said the person, who declined to be named because the information hasn’t been publicly disclosed. An undetermined number of lower-paid employees will also get cash awards to dissuade them from quitting, the person said.” http://www.bloomberg.com/apps/news?pid=20601087&sid=aGf.YgVHEPYQ&refer=home  

This article appeared months prior to Senator Dodd’s “amendment” that specifically allowed for the bonuses he now “rants about.

The publication “Canadian Business” reports, “The bonuses were paid under legal contracts, part of a program that had been disclosed in advance filings that American International Group Inc. made with the government.” http://www.canadianbusiness.com/markets/headline_news/article.jsp?content=D96VUNH00

The Article is titled, “Democrats threaten strong action to recoup AIG bonuses through new taxes”. The article highlights the idle nature of the Democratic threats. Specifically, the publication noted that, “Even though AIG’s bonus plans were disclosed last year, outrage and threats poured forth from Capitol Hill on Tuesday.”  Does the word hypocrisy come to mind?http://www.canadianbusiness.com/markets/headline_news/article.jsp?content=D96VUNH00

These very same Politicians who now pretend outrage knew of these planned bonuses and retention payments 6 months ago. Why Senator Dodd authored the amendment that protected these very payments! The White House was kept fully informed by the Senator’s staff.

UPDATE: Senator Dodd Admits Advance Notice – Blames Obama White House & Treasury Department For Engineering AIG Bonuses:

hypocrite (definition)

 

1. a person who pretends to have virtues, moral or religious beliefs, principles, etc., that he or she does not actually possess, esp. a person whose actions belie stated beliefs.
2. a person who feigns some desirable or publicly approved attitude, esp. one whose private life, opinions, or statements belie his or her public statements.Origin: From the Greek Language –  a stage actor, hence one who pretends to be what he is not

As an additional note: Did you know that an alternative amendment was offered to the one authored and passed by Senator Dodd and the Democrats, however, the Democrats lack of bi-partisanship prevailed. ”Republicans said Democratic leaders last month killed a plan that would have forced financial institutions to compensate taxpayers if they paid their executives large bonuses after receiving federal bailout money. Sen. Olympia Snowe, R-Maine, a co-sponsor of the amendment to Obama’s stimulus bill, said striking it “left open an escape hatch of golden parachutes for top executives on Wall Street.” Snow is one of the Republican Senators to consistently cross party lines to support Obama’s initiatives.” http://news.aol.com/article/congress-threatens-to-tax-aig-executives/386132

AOL news also reports that, “Though AIG’s bonus plans were disclosed last year, Congress’ outrage and threats have begun pouring forth only recently.” http://news.aol.com/article/congress-threatens-to-tax-aig-executives/386132

So despite the fact that Democrats in Congress new, since last fall, that 73 AIG executives were to be paid in excess of $1 Million in bonuses (11 no longer work for the company) and that certain Executives would receive multi-million dollar bonuses, nothing was done. Well almost nothing was done – Senator Dodd authored and the Democrats passed an amendment that protected these bonuses.

Now that the facts have become public the political theatre has started.

AIG POLITICAL CONTRIBUTIONS IN 2008

Democrats   $442,996                Republicans    $142,792           Independents   $0        Total: $442,926

House of Representatives:                # of Members                      Ave Amount               Total Amount

Dems                                                                        34                                             $3,069                                $104,350

Reps                                                                          21                                              $1,223                                     $25,693

Senate

Dems                                                                       18                                              $17,906                                 $322,322

Reps                                                                         15                                               $6,816                                    $102,249

Senator Chris Dodd   $103.100

Senator Barack Obama $101,332                      

Obama and Dodd received $204,000 of the $443,000 in total political contributions made by AIG last year – almost half of the total amount spent by AIG.  http://www.foxbusiness.com/story/markets/industries/finance/dodd-cracks-aig—time/

%d bloggers like this: