Obama: hypocrisy re/AIG bonuses
Richard Moore
After dishing out $170 billion to AIG, without bothering to obtain oversight privileges, Obama now seeks to direct our anger at one tenth of one percent of that amount going to bonuses. Pay attention to the splinter and ignore the log. I'd say .1% is only a fair reward, from AIG's point of view, for the crooks who brought about this coup for AIG.Anger over revelations that bailout recipient American International Group Inc. doled out $165 million in bonuses boiled over Monday, and could result in legislation aimed at the company, top congressional Democrats indicated. AIG, which is now 80 percent owned by the federal government, has been on the receiving end of $170 billion of taxpayer money. President Obama said Monday that he had asked Treasury Secretary Timothy F. Geithner to “pursue every legal avenue to block these bonuses and make the American taxpayers whole.”
CQ TODAY PRINT EDITION
March 16, 2009 – 8:52 p.m.
Irate Congress Takes Aim at AIG
By Phil Mattingly, CQ Staff
Anger over revelations that bailout recipient American International Group Inc. doled out $165 million in bonuses boiled over Monday, and could result in legislation aimed at the company, top congressional Democrats indicated.
AIG, which is now 80 percent owned by the federal government, has been on the receiving end of $170 billion of taxpayer money. President Obama said Monday that he had asked Treasury Secretary Timothy F. Geithner to “pursue every legal avenue to block these bonuses and make the American taxpayers whole.”
That effort looked destined to come up short. Senate Banking Chairman Christopher J. Dodd , D-Conn., said Treasury lawyers had told him last weekend that there was little legal precedent to recover the bonuses. But Dodd and fellow Democrats were exploring proposing a tax that would be narrowly tailored to force AIG to pay back a percentage of the bonus money.
“We’d write a tax provision specifically targeted to that audience,” Dodd said Monday night. The tax could not recover all of the bonus money but could potentially recover a large percentage, he added.
There is a chance that legislation will be introduced by Tuesday, Dodd said.
But House Financial Services Chairman Barney Frank , D-Mass., said Monday night that the tax idea, if it were too narrowly tailored, could give the company basis for a lawsuit. He said that because of the federal government’s 80 percent stake, a better option might just be for the government to assert itself as a majority owner.
“It’s a much stronger legal position than intervening in a contract between two other parties,” Frank said. “I think we should become one of the parties.”
A Financial Services subcommittee is slated to hold a hearing on AIG Wednesday, where Edward Liddy, the chief executive of the insurance giant, is scheduled to testify.
“It’s one thing if I say, ‘Well, you two guys, I don’t like the contract you signed and since I lent you money, I’m going to break it,’ ” Frank said. “It’s another thing to say, ‘Liddy, get away. I’m now the AIG because I own the goddamn company and I’m not paying you the bonuses because you screwed up.’ ”
Rep. Richard E. Neal , D-Mass., a senior member of the tax-writing Ways and Means Committee, said Monday night he was not sure if legislation was the way to go, but that something had to be done.
“Anybody that thinks that this is a done deal, they are miscalculating,” Neal said.
Outrage Among Constituents
Rep. Gary Peters , D-Mich., announced Monday night he was preparing to introduce a tax-based bill, similar to Dodd’s proposal, designed to recoup the AIG bonuses.
“Congress must act swiftly on this matter to show AIG, other companies receiving federal support and taxpayers that we mean business when we say that tax dollars are not to be used to enrich company executives,” Peters said.
Peters’ bill would create a 60 percent surtax on bonuses over $10,000 to any company in which the government has a 79 percent or greater equity stake. AIG is the only company that meets those requirements.
While several options remain on the table, one thing was certain late Monday: AIG has become an enormous topic of discussion in Congress, as leaders on both sides of the aisle and in both chambers work to find some solution to the problem that has garnered national attention — and caused a significant uproar in lawmakers’ home states and districts.
“In terms of raw emotion, this is like scratching a blackboard — with long fingernails,” Neal said.
Also Monday, 79 House members wrote to President Obama asking him to take action against AIG.
House Speaker Nancy Pelosi said Monday that she supports Obama’s efforts to recover tens of millions in executive bonuses from AIG, citing constituent anger.
“We want our money back,” Pelosi, D-Calif., said in an interview. The Speaker, who travels extensively around the county raising money for Democrats, said that wherever she goes, people approach her to express anger.
“I travel the country. The American people are outraged by this, as well they should be,” Pelosi said. “It’s a stunning thing that people would take taxpayer money to rescue their companies from a terrible fate and they get bonuses for taking it there in the first place. It’s inexplicable.”
“It would be bad enough if we weren’t in a recession,” she said, “but to ask to use taxpayer money to bail out these people who’ve made millions of dollars losing billions of dollars and being bailed out — something is wrong with this picture.”
House Minority Leader John A. Boehner , R-Ohio, took a shot at the Obama administration’s handling of the bailout.
“The latest revelation about AIG executives receiving millions in bonuses while taxpayers continue to bail out the company with hundreds of billions of dollars is outrageous and the clearest example yet of why an exit strategy is essential,” Boehner said.
“The administration should pursue all means of recovering these bonus payments and present Congress — and, more importantly, taxpayers — an exit plan as soon as possible,” he said.
Edward Epstein contributed to this story.
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