AIG paying millions in bonuses despite bailout

[bonnie]

Today .... Obama says that these bonuses are an 'outrage'. And that he is going to pursue stopping these bonuses. He says that AIG failed because of 'greed'.

What gives the president the right to break contracts at will?

These bonuses were negotiated between the employee and the employer. BEFORE the bail out, Conditions were not given as to bonuses be paid out.

In fact in the stimulus bill there is language that says President Obama was opposed to interfering with existing bonus contracts.

Obama seems to feel he can break contracts signed between two parties and impose the will of the government. That doesn't cause anyone some concern?

A bankruptcy judge can now rewrite your mortgage to better suit the buyer. Taking away from the seller and giving to the buyer. Especially if you lied on your mortgage application.

By what right??

Wonder how much in agreement any of you would be if I purchased a home from you and now explained I lied and inflated my ability to repay or my income.

Now our vets are going to be having their contract rewritten and may very well be shopping for their own health insurance. Obama wants them on their own private insurance.

What a slap in the face to our vets. Welfare recipients will continue to receive government paid for health care

Homeland security caused all sorts of nasty comments and concern that our rights were being eroded. Do you think that now a president can break contract,issue subpoenas to see who received their negotiated bonus and search for anything to punish AIG give someone a concern. The figure of 98% tax on the bonus. How can rules and laws change on the whims and dislike of the lawmakers and pass scrutiny of the President

Everyone seems delighted at higher taxes for the nasty rich or small business men and women.

It is a tax on all. Every penny that can be taken from "the rich' is going to be paid by the consumer, Or companies leaving the US at a much faster rate.

My husband had his own business and when his costs increased the costs to the consumer increased.

[Woody]

Ron Wyden from Oregon placed a provision in the Bailout Bill for AIG that would tax the bonuses very heavily or require that they be returned to the government. But in the end ... Chris Dodd had this removed. And now all of Washington is complaining about it and trying hard to find a way to do just what Wyden had proposed.

Washington is such a mess.

The government owns 80% or AIG now. Surely they can force these guys to live on less. 73 employees got at least One Million Dollar bonuses. In this day and age ... that is simply not acceptable.

Obama NOW promises to do anything and everything possible legally to get back that money ... that HE allowed to be spent. He knew ahead of time that those bonuses would be made. But legislation like Wyden had pushed .... was stopped. Now they want a redo.

This ADMIN. is in disarray.

[Woody]

Sen. Grassley from Iowa stated today that the AIG execs should follow the Japanese model and come before the American people ... bow down before us ... apologize .... the then commit suicide. A 'Falling on your sword' action. What do you all think of this kind of solution?

[bonnie]

Sen. Grassley from Iowa stated today that the AIG execs should follow the Japanese model and come before the American people ... bow down before us ... apologize .... the then commit suicide. A 'Falling on your sword' action. What do you all think of this kind of solution?

There may be some that should consider falling on their sword. Begin with our elected officials.

These very bonuses were exempt according to Chris Dodd. All the big shock and being appalled is horse potato's.

They knew this,exempted it, and now are wringing their hands at such greed.Acting for all the world as if they are surprised and were clueless.Most I believe are retention bonuses,the recipients already are going to be let go.

Maybe begin with the mortgage mess and how that came to be.

How so many are willing to hand the federal government the power to void contracts and rewrite the amount that will be paid to lender's and and others they do not believe is worthy to have the contract honored

[Woody]

Obama said he didn't know ... now he says he did know. Reminders of Nixon. "I am not a crook." If only we could believe the words that come from Obama. I am hoping there will be an investigation of this.

[Woody]

The Democrats are now lining up against Obama. Chris Dodd is now saying that it was Obama that insisted on the provisions to protect the bonuses.

[Gerr]

How can we get the board of directors fired for allowing these idiotic contracts that reward failures with unconscionable bonuses?

[Gerr]

I applaud the first part, but as much as I despise these shameless blood-suckers, I would not wish them to do the second part.

[bonnie]

How can we get the board of directors fired for allowing these idiotic contracts that reward failures with unconscionable bonuses?

I believe most if not all are retention bonuses. It was not as a reward for failure. Those that are receiving detention bonuses are already facing job loss.

That is to keep those that are leaving till their job description can be filled so as not to leave a company in the lurch.

We reward politicians on a regular basis and for a lot more dollar.

Those that are huffing and puffing and posturing as if they are shocked and outraged is baloney.

This little topic was explained and exempted by Chris Dodd.

The scary thing in this is the government believes it has the right to pass a law and make it retroactive. Can make null and void contracts signed by a private company before the government put their hooks into AIG.

Exactly what they are going to do with foreclousure.

Here they are going to reward dishonesty. Clearly stated if borrower lied about employment,ability to repay the the bankruptcy courts have the power to make null and void the mortgage contract and set their own value to be repaid. This is not to be more than 38% of their monthly income.

Just as another little reward for dishonesty they will also receive 1000.00 a year for five years to help with the new negotiated contract.

The other day Wells Fargo came out with a remarkable statement

Their banks were in good shape. According to Wells Fargo they were strong armed to accept what they did not need to influence other banks to accept the governments help.

Now they are a bit miffed on finding out what it means to operate under the government thumb. For something they didn't want and didn't need.

Day by day ,little by little government is intruding in almost all walks of life.

Now the plan or hope is to yank the medical care for vets out from under them.

They will be required to purchase private insurance. For that to even be plausible government will have to be able to force insurance companies to insure.

Obama didn't explain what they were to do when they reached the cap on their medical coverage

What a kick in the teeth.

[Woody]

Today ... the CEO of AIG ... Edward Liddy ... indicated in Congressional hearings that he does not approve of the retention bonuses. He hates them. But he felt he legally had to allow them to go forward.

[bonnie]

Today ... the CIO of AIG ... Edward Liddy ... indicated that he does not approve of the retention bonuses. He hates them. But he felt he legally had to allow them to go forward.

Surprise, surprise,isn't Liddy the one that was actually put in this spot by the government. Now they are going to throw him under the bus. Knowing full well this was taken into account and given the go ahead by the huffers and puffers

[Woody]

Yes. He is the fall guy for the government.

[Woody]

Today at the Congressional Hearing ... people are holding up signs that say 'CROOK' .

[bonnie]

Perhaps soon Barney Frank and Chris Dodd will start posturing and threatening when Freddie Mac and Fannie Mae pay retention bonuses

[Woody]

Well ... it was Chris Dodd and Barack Obama who specifically put in the law to allow AIG to have 'retintion bonuses'. Why? Because they were the two that received the most contributions during election time.

Ron Wyden from Oregon ... what did he try to do? Answer: Place a high Tax on the bonuses. But our dear friends Dodd and Obama ... replaced this wording to allow 100% of the bonuses for AIG.

So ... all this hearing stuff is bogus.

[Neil D]

Wait a minute....

These bonuses were known about since NOVEMBER of 08...Who brokered the deal there? Who was president and gave the money to AIG?

and you want this to be laid on Obama?

[Woody]

Yes. It was Obama and Dodd who were responsible for striking the Wyden provisions to restrict the bonuses. That happened THIS year not last year.

[Neil D]

WASHINGTON (CNN) -- President Obama said Wednesday that no one in his administration had been responsible for supervising ailing insurance giant AIG but that ultimately, the buck stops with him.

President Obama spoke outside the White House on Wednesday before heading to California.

"Nobody here drafted those contracts; nobody here was responsible for supervising AIG and allowing themselves to put the economy at risk by some of the outrageous behavior that they were engaged in," he said outside the White House. "[but] we are responsible, though. The buck stops with me."

Obama, in a defiant tone, once again lashed out at the controversial bonuses given to executives at AIG, which received $173 billion in government bailouts over the past six months.

"People are right to be angry. I am angry. ... People are rightly outraged about these particular bonuses," he said. "But just as outrageous is the culture that these bonuses are a symptom of that have existed for far too long, a situation where excess greed, excess compensation, excess risk-taking have all made us vulnerable and left us holding the bag."

Source:CNN

No one in "his adminstration drafted those contracts"....

It's one thing to have contracts between the individual and busness and then the business take it away...It's another to return volentarily those bonuses in the contract....

[Woody]

So ... now the truth. When the government wrote up the bill to fork out the billions for AIG .... there was a provision to heavily tax the excess bonuses that some would receive. This provision was written up by Ron Wyden of Oregon. The provision was stricken from the Bill by our friend Chris Dodd and the White House. This is why we are where we are now.

[Neil D]

oh, so you would want to tax ONE group of people?

So, let put this precident in practice...Let's say that SDAs need to be taxed for worshiping on Saturday....Would that be fair? Neither would it be fair to remove these bonuses ....

Source:CBS

Rick: How can you close me up? On what grounds?

Captain Renault: I'm shocked, shocked to find that gambling is going on in here!

Croupier: Your winnings, sir.

Captain Renault: Oh, thank you very much.

Casablanca (1942) .

The dialog from "Casablana" is apt for today's outcry over the $165 million in AIG bonuses. The bonus payments are contractually legal and the recipients didn't break any laws that we know of...yet.

But that doesn’t mean that the bonus payment weren’t unsavory. They were just playing the financial industry game — gambling at high risk with other people's money — which has been going on for centuries.

The various expressions of shock and awe are in response to the public expression of horror that a company receiving billions in bailout funds for a failing company should be paying bonuses to employees who helped sink the ship.

The public wasn't fully aware that gambling was going on, but the Federal Reserve, Treasury Department and Congress were aware of risky game being played. They just erroneously thought that housing prices would never drop.

The bonus payments have been public information months, and it appears the U.S. government assumed that AIG was obligated contractually to make the payments.

Now the president and all his men, as well as Congress, are talking about punitive actions. Treasury Secretary Timothy Geithner, trying to recover from a bad week in the press, said AIG must reimburse the U.S. government for the $165 million the insurer paid to employees.

The Treasury Department would also force AIG to make a kind of penalty payment, deducting $165 million from a $30 billion bailout payment. In other words, instead of $30 billion, AIG would get only $29,835,000,000.

(AP Photo/Susan Walsh)Testifying before Congress today, AIG CEO Edward Liddy said he will ask executives to give back 100 percent of their bonus and others 50 percent. But, he is concerned that the employees, who he said are critical to stabilizing the company, will return the money but resign.

The AIG bonuses are really a symptom of what's wrong with the financial industry, and potentially a tipping point for more rapidly reforming the industry. Speaking today, President Obama gave an indication of the kind of reforms and regulation he is planning, after a grand period of deregulation.

“And what we are working on is a resolution authority that would be similar, not identical but similar, to the powers that the FDIC currently has over banks,” Mr. Obama said. “What they're able to do is to, at the same time protect creditors, depositors, and consumers, while also exercising greater power proactively over institutions like AIG which is not a bank which is an insurance company with a hedge fund on top of it.

“It would allow us proactively to get out in front, make sure that we're separating out bad assets from good, dealing with contracts that may be inappropriate, and preventing the kinds of systemic risks that we've seen taking place with AIG,” he added.

The Obama team has consistently focused on systemic issues, getting at the root of financial industry problems. Passing effective legislation and changing the way Wall Street does business will take years, however, and at this time investors and an angry public are running out of patience.

It only shows that the financial industry needs to be reformed, you will have no argument from me...something that I have argued with Shane for the last week..

[Woody]

If SDAs are receiving money from the US government ... then yes ... I would support taxing SDAs. Any group that receives money should be free to be taxed to any degree that the ones handing out the money would like.

[Woody]

First Obama says that he is shocked about the bonuses. Now we find out that he knew about it all along and tried to stop any restrictions on the bonuses. The truth always comes out Mr. Obama ....

Thank God for hearings. The truth is important.

[Neil D]

So, you are upset over those bonuses being paid out..? You want congress to send the IRS after them and pass laws to help get that money back? Be warned, letting them voluntarily give it back may be the best option....singling them out and taxing them can cause all sorts of problems. Read on...From FoxNews....

Lawmakers outraged over the AIG bonuses have told the people who got the money to watch out -- the government will get it back one way or the other, even if it means taxing the heck out of their paychecks.

But legal scholars say Congress will have a tough time defending itself in court if it goes down that road.

Not only would Congress be retroactively meddling with contractual agreements, they say, but it would be passing laws that would essentially target a specific group of employees.

Jonathan Turley, George Washington University law professor, said targeting those employees through taxes would invite a valid court challenge.

"It could well trigger years of litigation," he said. "Just because a company or individual is unpopular does not mean the government can retroactively impose punitive measures against them. ... There's a host of difficult contractual and constitutional and statutory barriers that would have to be overcome by Congress."

Two of those difficulties, lawyers say, lie in Article I of the U.S. Constitution -- a section stating Congress cannot pass any "Bill of Attainder" or "ex post facto" law.

A Bill of Attainder is an act of the legislature that singles out and punishes a group or individual without trial. An ex post facto law retroactively changes the legal consequences of an act.

"It's a Bill of Attainder. It can't be done," Sen. Judd Gregg, R-N.H., told FOX News when asked about proposals in the Senate to tax AIG.

President Obama even warned Wednesday about the possibility of a costly court battle over the $165 million in bonuses.

"We are exploring every possible avenue, as is Congress, to see what we can do. But what we need are tools that allow us not to find ourselves in a situation where we only have two options," Obama said. "One is to withhold money from AIG that could potentially lead them into a spiral that could affect the entire financial system. Or, on the other hand, having folks get bonuses and at least have the capacity to sue the government and get not only their bonuses but potentially even more out of the legal system."

Treasury Secretary Timothy Geithner wants to require AIG to pay back the money to the government and deduct that amount from the $30 billion bailout commitment, as well as subject future bonuses to tough restrictions.

[Woody]

During the hearings today ... the chairman insisted that the CEO list the names of those who got bonuses. He said "I want names". When the CEO cautioned against public disclosure of the names ... the chairman strongly stated that the names were needed and they needed to be unrestricted. IOWs ... these names will be made public.

I might add ... the chairman is a member of your political party Neil.

I hope there are not any communists in the list of names ...

[Neil D]

That CEO refused due to the fact that threats have been made against these people...I heard where someone threatened to take a piano wire and wrap it around the person and his family.

And with your rabid persual of this, I fear that there are others who just might kill these guys who got the bonuses...

Is this what you want, Redwood? To kill these people because they obeyed the law? Granted, it sunk a company, but these individuals didn't do anything wrong....And you are displaying encough craziness on this subject to cause me to wonder about your sanity....