The first names of AIG executives who received millions in bonuses have been released. Some executives are now suggesting that the company should pay for private security — which would presumably come from public funds. These executives include , labeled “Jackpot Jimmy by New York newspapers. He is James Haas, 47, an executive VP and the co-leader of North American marketing. Also named are Douglas Poling, 48, the unit’s general counsel, as well as a director, executive vice president and chief administrative officer, and Jonathan Liebergall, 43, a unit director and head of municipal finance.
Poling received the largest bonus check of $6.4 million. Poling has said that he intends to return the money, but it may not due much for his reputation. This is an outrageous amount of money and only appeared to produce regret when he was named in New York tabloids.
Haas has also said that he intends to “rescind my retention contract.”
One executive told The New York Times that “It is as bad if not worse than McCarthyism” and that AIG executives are being sacrificed by politicians “for their own political agenda.”
First, the people ruined by McCarthy were fighting for their right to work. They were also innocent. They were not fighting to rip off the public treasury after running a major corporation into the ground through incompetence and greed.
Second, the executive is right that these AIG employees do not deserve the focus of public anger. That should be directed as members of Congress who showed no responsibility or rationality in crafting the largest federal bailout in history. Members knew of these bonuses and put exemptions into the law to protect them. While Rep. Barney Frank says that they had no choice, I strongly disagree. I can think of a number of ways to have crafted the legislation to avoid this problem. Members simply did not care much about these details until the public exploded in anger.
As for President Obama’s insistence the he willing to take the blame, there should be some accountability for this scandal. Senator Chris Dodd of Connecticut, the Banking Committee chairman, and Treasury Secretary Timothy Geithner appear to blame each other. The fact is that Dodd put the amendment into the law. He should have refused if he opposed it. As for Geithner, if he is responsible for this exemption (which Obama has condemned), he should leave office.
This is another case where it seems that we have become a nation of chumps — allowing Congress to pretend that they are blameless and shocked by the language of their own legislation. It is not clear what it will take to get this country sufficiently angry to demand true structural reforms of our political system are needed.
As for reimbursement for private security, it seems unlikely that the public will support private security payments for executives made unpopular by their own actions in pilfering the treasury. The problem with taking massive public payouts is that payments and recipients can become public knowledge. However, these executives acted lawfully, though in my view greedily. It is Congress that betrayed the trust of the public in failing to impose the most obvious limitations on the use of hundreds of billions of dollars.
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You can’t see the forest for the trees” compliments press facilitated PSYOPS rendition follows.
Thanks to the semantics of the fawning supportive press “The American public cannot see the TRILLIONS of $$$$$$DOLLARS for the millions of dollars.”
Telephone comments to Congressional Representatives. Elected officials have publicly expressed outrage at the malfeasance the AIG executives demonstrated accepting contract specified bonuses and after deliberate Presidential and Congressional HATE speech deliberately generating DEATH THREATS at AIG executive’s while Congressionally elected Representatives are demanding AIG names be released to the public; please insure the this principled listing procedure is followed:
If congressional legislation efforts clandestinely release AIG executive’s names or dictates AIG executive’s names be publicly released the names of these AIG executive’s MUST be in very small print at the END of the MALFEASANCE LIST. This MALFEASANCE LIST shall BEGIN with the following names: PRESIDENT BARRACK HUSSEIN OBAMA, SPEAKER NANCY PELOSI, Sen HARRY RED, Sen CHRIS DODGE, Rep BARNEY FUDGE and the remaining list of elected congressional representatives and legislative assistants that facilitated this so called stimulus package followed IN SMALL PRINT the AIG executives whose bonus amounts to less than 1/18,500* of the $3.1 trillion federal budget.”
*AIG Brouhaha Takes Focus Off Real Issues
KRAUTHAMMER
http://www.ibdeditorials.com/IBDArticles.aspx?id=322353578201727
Those Congressional Representatives have directed their attention to successfully legislating a 90% tax on these AIG bonuses. The AMT? (Alternative Minimum Tax) It was written to catch some 155 high income families not paying taxes and that net is making for big tax bills for millions of American families since this tax law was not adjusted to reflect inflation. http://en.wikipedia.org/wiki/Alternative_Minimum_Tax#History_and_current_controversies
Geithner should go, but it also must be pointed out that many of the Republicans that are calling for his head were against putting limits on compensation of executives. I have no problem with the names of the bonus babies being made public because they are now drinking from the public spigot. And in no way should the taxpayers have to provide security for these thiefs.
‘Too many cooks in the kitchen spoil the broth.’
When the Feds take over a failed bank they bring in there own people. There is no question who is in charge, even though the existing employees are kept on for the day-to-days.
‘Meeting of the minds’ – still a crucial element in contract law -last time I checked.
Bob,
I’m being cynical, so I’d say they’re more concerned with being SEEN to be concerned with recouping the money. However, your point’s well taken.
The more this goes on the more certain I am that these payouts were “hush money.” My knowledge of the financial world and human nature are such that I know compensation is given as sparingly as possible, even to supposedly valued employees. The efforts made to secure these payments contractually prior to the initial Fed bailout of AIG, speaks to foreknowledge (fraud?) of imminent disaster and the desire to cover asses.
Gyges:
“I’m curious as to what the legal definition of “punitive” is in cases like these.”
The Nixon case seems to flesh out the most details, but here’s the findlaw.com annotation of the clause:
http://caselaw.lp.findlaw.com/data/constitution/article01/47.html
“This seems to be pretty obviously motivated by Congress wanting to be seen punishing those taking the bonuses. I seem to recall their being statements made by members of Congress that “they better return the bonuses or else.””
But recall why they’re angry; they’re far more, dare I say exclusively, concerned with recouping the money than punishing anyone.
SIYOM,
Bob
This is Dean Baker’s anaylsis of the AIG mess, to include the actions of Congress and the President:
http://www.commondreams.org/view/2009/03/20-12
The problem as I see it is not one of compensation but of the bailout/government interventiion to begin with. Bush was an idiot to even think about it, let alone let Paulson convince him to put these forces into play in the first place.
Now we have a congress/government willing to get into the inner workings of industries with which they have no experience. They can barely run the country. I think the main issue is not greedy executives (which they were) but now there is precidence for congress meddling in other corporations compensation structure, he who holds the purse strings runs the show. Compensation should be the responsibility of the share holders and the board of directors.
Ben & Jerry watch out, the feds are going to reconstitute the Chunky Monkey.
Bob,
I’m curious as to what the legal definition of “punitive” is in cases like these.
This is seems to be pretty obviously motivated by Congress wanting to be seen punishing those taking the bonuses. I seem to recall their being statements made by members of Congress that “they better return the bonuses or else.”
Never underestimate the ability of a predator to feel like they are the victim. I’m with the Red Queen “Off with their heads!”
“As for reimbursement for private security, it seems unlikely that the public will support private security payments for executives made unpopular by their own actions in pilfering the treasury.”
Makes you wonder whether there’s a Takings argument in favor of the plaintiff hidden in there. Congress made the bed; they should pay for it.
Otherwise, I think the 90% taxing scheme will pass muster under the Bill of Attainder clause:
http://jonathanturley.org/2009/03/17/congress-moves-to-tax-aig-bonuses-but-is-it-constitutional/#comment-44290
That about sums it up.