Attention AIG: Enough is enough
Monday, March 16, 2009
That's the message from President Obama, who has instructed Treasury Secretary Timothy Geithner to "pursue every legal avenue" to block $165 million in bonuses that the bailed out insurer plans to pay executives who were in part responsible for the company's near collapse.
The attempt by the Administration to rein in AIG comes after the avalanche of outrage from lawmakers and the general public (waving hand wildly!) over the company's latest brazen example of fiscal excess.
Public anger was further fueled by AIG's revelations of the names of dozens of big banks it has paid off with the bailout money. "The disclosure, which the company said was made after consulting the Federal Reserve, revealed that AIG paid more than $75 billion in the final months of 2008 to numerous domestic and foreign banks, as well as to various U.S. municipalities," reports the Washington Post.
The funds were paid between Sept. 16, the date that AIG first got an $85 billion emergency loan from Uncle Sam, and Dec. 31. Recipents of our money via AIG included Goldman Sachs, Societe Generale, Deutsche Bank, Merrill Lynch, Morgan Stanley, Bank of America and Barclays.
More than $34 billion of the money went to trading partners of AIG Financial Products, the small subsidiary whose exotic derivatives brought AIG to the edge of collapse.
Control the federal flow: Citing AIG's "recklessness and greed," Obama today noted that "it's hard to understand how derivative traders at AIG warranted any bonuses, much less $165 million in extra pay. How do they justify this outrage to the taxpayers who are keeping the company afloat?"
"In the last six months, AIG has received substantial sums from the U.S. Treasury," the president continued. "I've asked Secretary Geithner to use that leverage and pursue every legal avenue to block these bonuses and make the American taxpayers whole."
Obama's announcement of the effort to stem public funds going toward AIG bonus payments followed an exchange of correspondence between the company's chief executive and Geithner on how the money is being spent.
"This isn't just a matter of dollars and cents. It's about our fundamental values," said Obama. "... all [we] ask is that everyone, from Main Street to Wall Street to Washington, play by the same rules."
No sarcasm intended when I say, amen and good luck with that, Mr. President!
This is not just greed on AIG's part, this is incompetence. It's time to REPLACE the top level of management. And if it takes NATIONALIZATION to accomplish that, then I'm all for it. Get Those Crooks Outta There!
Posted by: Wyn Snow | Monday, March 16, 2009 at 06:51 PM
Posted by: jessica | Monday, March 16, 2009 at 05:59 PM