Chicago Tribune, Bonuses, and AIG

UPDATE, May 21, 2009: Setting the record straight

On May 19, the Washington Times published a correction regarding its claims about the Chicago Tribune and bonuses for executives.

Here is the Washington Times correction:

• Correction: A story in May 14 editions of the Washington Times stated incorrectly that a Chicago Tribune editorial had berated the American International Group for paying huge bonuses to employees. In fact, the editorial said that the public has an economic stake in the survival of AIG, and that if bonuses were paid to employees who are key to the company's future, they can be justified. The Times story also quoted an unnamed blogger as saying: "Using the employees' pension money to pay stockholders and executive bonuses - priceless." In fact, the Tribune is a private company and does not have stockholders. No pension money was used to pay bonuses.

Read the March 17 Tribune editorial on AIG here.

Based on what was the factually incorrect reporting of the Washington Times, I charged the Tribune with hypocrisy. In light of the correction, that charge of hypocrisy on the part of the Tribune when it comes to the AIG bonuses is unwarranted.
__________________

Oh, the hypocrisy!

Jennifer Harper writes: "Bankrupt Tribune gives bonuses after berating AIG"

Two months after denouncing a troubled financial company for doling out hefty management bonuses, a bankrupt news media company is doing the same thing.

"Money for nothing?" blared a Chicago Tribune editorial in mid-March, responding to news that American International Group Inc. planned to give $450 million in bonuses to its top executives during a very public federal bailout.

But this week, the Tribune Co. - which owns the Chicago Tribune, the Los Angeles Times, the Baltimore Sun, the Hartford Courant and other dailies, along with 23 TV stations - received permission from a Delaware bankruptcy judge to pay out $13.3 million in bonuses to some 700 local and corporate managers.

The payouts come as $2.7 million in severance pay to 68 employees who lost their jobs last year remains frozen.

Tribune Chief Financial Officer Chandler Bigelow III explained the rationale for the bonuses during an appearance in U.S. Bankruptcy Court on Tuesday, using an argument reminiscent of that used by AIG.

"We need to motivate and incentivize the key people who will implement change. These are really good people we're talking about. They're the best and the brightest in the company," Mr. Bigelow told Judge Kevin Carey.

The Chicago Tribune didn't see it quite that way in March, when it editorialized about the bonuses to the same company executives responsible for the insurance giant's $40.5 billion in losses last year. "Shouldn't that kind of 'performance' require those employees to return some of their salaries, if not be fired altogether?" it wrote.

The Tribune Co. by comparison was $13 billion in debt because of dwindling advertising revenues and heavy operating costs when it filed for bankruptcy in December.

...At the same Tuesday hearing where he approved the Tribune bonuses, Judge Carey refused to approve the severance payments to the Tribune employees who were laid off before the Tribune filed for Chapter 11 protection in December.

While the judge said he "sympathized" with the plight of the unemployed journalists, he cited legal constraints. Two employees who had been laid off before the bankruptcy were granted approval for the payments, however.

I suspect similar scenarios are playing out all over the country.

Those operations quick to condemn AIG for its bonuses and harsh in their criticism have probably dished out bonuses of their own.

Of course, if John Kerry had it his way, he'd bail out the newspapers.

From Politico:

Last week, Sen. John Kerry (D-Mass.), threatened with the loss of the Boston Globe’s automatic endorsement and generally fawning coverage, held a meeting of his Senate media subcommittee. During the hearings and afterward, Kerry declared newspapers an “endangered species,” argued for something like a bailout and denied that repeal of restrictive media ownership rules would help solve the problem.

Speaking of denial, the Obama administration tried to put the kibosh on rumors that a bailout is in the works. The language it has employed does not inspire confidence. White House spokesman Robert Gibbs told reporters that there was “a certain concern and a certain sadness” that some newspapers are closing but explained that he didn’t “know what, in all honesty, government can do about it.”

...Right now, a variety of proposals for what government can do about it are floating around. These range from direct bailouts to tweaks of existing philanthropy and anticompetitive laws. Government could fund newspapers directly or make it easier for foundations to do so or remove roadblocks to newspapers getting together and making people pay for content.

If the government does anything to prop up the newspapers, they'll need to guard themselves from the likes of Chuck Schumer and Barney Frank if they attempt to give out bonuses.

The recipients may have to beware of the people wielding pitchforks.

Remember what Schumer said during the AIG bonus mess?

"We intend to do everything in our power to prevent those payments from being paid and recoup the money that has already been paid."

Schumer said he wrote a letter to AIG chief Edward Liddy urging him to tell his employees to voluntarily return the bonus money. Otherwise, Schumer said, Congress will pass legislation that would tax the bonus money at such a high rate that the AIG employees will be forced to pay it back through taxes.

"If you don't return it on your own we will do it for you," Schumer said.

..."If Mr. Liddy does nothing we will act and we will take this money back and return it to its rightful owners the taxpayers," Schumer warned. "So for those of you who are getting these bonuses, be forewarned -- you will not be getting to keep them."

Remember what Barney Frank had to say about the AIG bonus recipients?

“We will be asking for the names,” Frank said at the beginning of a hearing at which AIG Chairman Edward Liddy was called to testify. “If Mr. Liddy declines to give us the names, then I will convene the committee to vote a subpoena for the names. So we do intend to use our power to get the names of the people here.”

Be forewarned, newspaper execs. Be careful what you wish for in terms of government assistance.

It's one thing to suffer the slings and arrows of angry people pointing out your blatant hypocrisy. It's another thing to have the government pass legislation to strip you of your bonuses. That really hurts.

Americans for Limited Government and AIG Campaign Kickbacks

Americans for Limited Government President Bill Wilson sent a letter to members of Congress today. He's demanding that Barack Obama and members of Congress return AIG "bonuses" from their campaign coffers.

Here's the letter:

To the Members of Congress:

This week, President Barack Obama expressed strong outrage that American International Group (AIG), Inc. gave out some $165 million in contractual bonuses after receiving more than one-thousand times that amount, some $173 billion, in taxpayer bailouts.

The President stated, "This is a corporation that finds itself in financial distress due to recklessness and greed. Under these circumstances, it's hard to understand how derivative traders at AIG warranted any bonuses, much less 165 million dollars in extra pay. How do they justify this outrage to the taxpayers who are keeping the company afloat?"

Coming from the President, who according to OpenSecrets.org, received some $104,332 from AIG in the 2008 election cycle, this rings rather hollow to American taxpayers who have been ripped off by some $9.7 trillion in bailouts from the federal government to failed enterprises over the past two years.

Since 1989, AIG has donated some $4.37 million to candidates for federal office. In 2008, it gave $644,218 to candidates, and in return, it received from the Federal Reserve some $173 billion in taxpayer-guaranteed loans. That represents nearly a 27 million percent return on their 2008 “investment” into politicians’ loyalty.

Of particular note, Senator Chris Dodd received some $103,900 from AIG in 2008, and in the 2009 “stimulus” legislation, he inserted the amendment that guaranteed that bonuses would be paid by adding language to a spending cap that specifically excluded executive bonuses included in contracts.

The legislation passed the House and Senate by comfortable margins, and no controversy by politicians now making a fuss was raised, including the President, who took the most money from AIG in 2008 of any candidate.

If Washington is now determined to prevent the discharge of contractual bonuses, then the politicians should put their money where their mouth is and return every penny to American taxpayers ever given by AIG to candidates. That includes the President, and any and all members of the House and Senate that ever took money from the business that should have been allowed to fail.

Additionally, the bailouts must end. To date, only one Congressman has introduced legislation that would make it impossible for the Federal Reserve to loan to favored companies, Rep. Paul Ryan.

Last year, he proposed eliminating the dual mandate at the Fed. If the nation’s central bank were legally prohibited from perpetuating economic growth, and solely focused on price stability, it would not be concerned with propping up failed enterprises like AIG, Bear Stearns, and others arbitrarily deemed to pose “systemic risk” to the financial system.

Failed institutions must be allowed to fail pursuant to market forces. And politicians on the take from companies bailed out by government must give back the money they were given by AIG to look the other way while the company was receiving $173 billion in taxpayer-guaranteed loans that may never be paid back by a company that is still failing.

Sincerely,

William Wilson
President
Americans for Limited Government

Wilson makes some good points.

Obama received $104,332 from AIG in the 2008 election cycle.

Chris Dodd, the stimulus bill amendment to protect bonuses guy, picked up $103,900 from AIG in 2008.

It's wrong for them to keep the money from AIG.

As a taxpayer, I want to exert my AIG ownership rights. I think Obama, Dodd, and other members of Congress should return the money to it's rightful owner -- the American taxpayer.

I want the names of every candidate who accepted AIG cash. If they won't voluntarily give it back, I want legislation that will "slap a 90-percent tax" on the money.

Keith Olbermann, Jay Leno, and AIG

Keith Olbermann made a fool of himself when he was chatting with Jay Leno on the Tonight Show last night.

He said that American International Group is not an American company.

Wrong.



Transcript

KEITH OLBERMANN: The group that screwed the company into the ground, these guys are getting the bonuses. They're getting a million dollars each or more, on top of which they're based in London, most of them. So we are giving, we have given bailout money to people who caused the need for the bailout. We're giving them bonuses for screwing up the company and the economy, and they're not even in this country.

JAY LENO: Can I ask you a dumb question? Is this... It's called American Insurance Group. Is that the name?

OLBERMANN: I believe that's it, yes.

LENO: Is this even an American company, or is this one of those phony things when you're chopping down trees, you call yourself 'The Evergreen Preservation Society'?

OLBERMANN: It's a brand name.

LENO: I mean, is it even American at all?

OLBERMANN: It probably was at some point, but you know, when they went... when you go to initials, as you know, usually it's a sign something has changed. Going by your initials, it's like, you don't really want to be identified as the company anymore.

Good grief. Olbermann doesn't even know the NAME of the company.

It's American INTERNATIONAL Group, not American INSURANCE Group.

It's an American company based in New York.

Obama Accepts Blame for AIG Bonus Mess

Barack Obama took responsibility for the AIG bonus fiasco in true Harry Truman style, the buck stops here; until he said he wasn't responsible.

His vow that he'll take responsibility is empty. He doesn't mean that.

From the Wall Street Journal:

President Barack Obama said he will take the blame for bonuses being paid at American International Group Inc. if it will settle an intense finger pointing under way over how such payments were possible at a company that has received tremendous taxpayer aid.

"Washington is all in a tizzy and everybody is pointing fingers at each other and saying it's their fault, the Democrats' fault, the Republicans' fault," he said at a town hall meeting Wednesday. "Listen, I'll take responsibility. I'm the President."

He also make clear that it isn't really his fault. "We didn't grant these contracts," he said.

But he added: "So for everybody in Washington who's busy scrambling, trying to figure out how to blame somebody else, just go ahead and talk to me, because it's my job to make sure that we fix these messes, even if I don't make them."

That's right. It's Obama's job to fix the mess.

He's wrong, however, about not being responsible for making the mess.

Obama signed the stimulus bill into law. He most definitely made it.

I hope Obama has learned a lesson: When you don't read the bill, messes happen.

Here's an interesting comment that Obama made at the town hall meeting:

"I would rather be a good president taking on the tough issues for four years than a mediocre president for eight years," he said.

Time will tell if Obama gets his wish.

So far, in his first 8 weeks, Obama hasn't managed to rise to the level of a mediocre president.

I'm sure the stimulus bill holds more surprises, more disasters like Chris Dodd's amendment. The reality of the nightmare that Obama signed into law is just beginning to unfold.

If Obama can be mediocre for four years, we'll be lucky.

Obama, AIG, and Suicide Bombers

When Barack Obama goes off his teleprompter, bad things happen.

During a town hall meeting in California, Obama equated AIG and big banks with suicide bombers.

From ABC News:

At his town hall meeting in Costa Mesa, Calif., Wednesday evening, President Obama compared embattled insurer AIG and other large failing banks to a suicide bomber.

"A lot of people say, 'Well, why not just let the banks fail?'" the president said. "'Why don't we just let them fail, let them go bankrupt, what's the problem?'"

The president said that if the local community bank, Fullerton Community Bank, failed, "We've got something called the FDIC, the Federal Deposit Insurance Corporation, that would take it over, it would guarantee all the deposits so you don't have to worry about your deposits. They are not at risk. And it would be able to kind of sort things out and then resell the bank fairly quickly and it doesn't threaten the system as a whole."

Bigger banks, however, "Citicorp or Bank of America or, you know, Wells Fargo that controls 70 percent of the banking system, and all of them are weakening, you can't afford to have all those banks all at once start going under. Even though the deposits might be guaranteed, you've got the entire economy resting on that credit."

The president said, "It was the right thing to do, even though it's infuriating, even though it makes you angry because you're thinking, 'I was responsible and these folks are irresponsible and somehow I'm paying for them.' The same is true with AIG. It was the right thing to do to step in."

"Here's the problem," Mr. Obama said, "It's almost like they've got -- they've got a bomb strapped to them and they've got their hand on the trigger. You don't want them to blow up. But you've got to kind of talk them, ease that finger off the trigger."

So Obama thinks of the banks as terrorists.

That sounds like something Obama would say.

And big government-- What's that like?

I think Obama should tone down the rhetoric. He's speaking so irresponsibly.

Chris Dodd and the Amendment

Chris Dodd is squirming as liars do, and Dodd is a liar.

Yesterday:

Senate Banking Committee Chairman Chris Dodd, D-Connecticut, who originally proposed the executive compensation provision, said he did not include the exemption clause, which said new rules "shall not be construed to prohibit any bonus payment required to be paid pursuant to a written employment contract executed on or before February 11, 2009."

In an interview with CNN, Dodd denied inserting that exemption at the 11th hour, and insisted he doesn't know how it got there.

"When I wrote the language there was no such language like that," Dodd told CNN Tuesday.

LIAR.

Dodd was lying, flat-out lying.

It wasn't even a Bill Clinton sort of "It depends on what the meaning of the word 'is' is" lie.

Dodd's was a total, clear lie.

This evening:

Senate Banking committee Chairman Christopher Dodd told CNN’s Dana Bash and Wolf Blitzer Wednesday that he was responsible for adding the bonus loophole into the stimulus package that permitted AIG and other companies that received bailout funds to pay bonuses.

Watch Dodd admit that he's a liar. Of course, he doesn't actually say he lied yesterday, but that is what he's saying.



More video:


______________

Dodd issued this statement Wednesday evening:

“I’m the one who has led the fight against excessive executive compensation, often over the objections of many. I did not want to make any changes to my original Senate-passed amendment but I did so at the request of Administration officials, who gave us no indication that this was in any way related to AIG. Let me be clear – I was completely unaware of these AIG bonuses until I learned of them last week.

“Reports that I changed my position on this issue are simply untrue. I answered a question by CNN last night regarding whether or not a specific date was aimed at protecting AIG. When I saw that my comments had been misconstrued, I felt it was important to set the record straight – that this had nothing to do with AIG.

“Fortunately, we wrote this amendment in a way that allows the Treasury Department to go back and review these bonus contracts and seek to recover the money for taxpayers. Again, I have led the fight to curb excessive executive compensation, and will continue to do so.”

Dodd is spinning feverishly.

He originally denied having anything at all to do with the amendment.

Moreover, the language of his amendment has ramifications for other institutions that accepted bailout money. Its impact is far-reaching.

AIG per se wasn't the issue. The issue was his involvement with the amendment.

Barney Frank: Naming Names

Barney Frank wants names and he wants them now.

From CNSNews:

Rep. Barney Frank, chairman of the House Financial Services Committee, says he wants a list of all AIG employees who received retention bonuses.

The firm has received $170 billion in taxpayer-funded bailouts, and it is under fire for the $220 million in retention bonuses paid to employees in its financial products division. The most recent payment of $165 million was awarded last Friday.

“We will be asking for the names,” Frank said at the beginning of a hearing at which AIG Chairman Edward Liddy was called to testify. “If Mr. Liddy declines to give us the names, then I will convene the committee to vote a subpoena for the names. So we do intend to use our power to get the names of the people here.”

...Frank on Wedneday complained that the AIG contract “appears to have been signed in contemplation of serious losses.” He noted that the bonuses were to be awarded whether the firm made money or lost money.

“As for retention – no I do not think these are the people you want to retain.” Frank said. It would be better for people who did not make the mistakes undo them.

Frank told the hearing he has urged Treasury Secretary Geithner, “Let’s exercise our ownership rights, and let’s bring a lawsuit as the owners against people who in fact did damage to the company.” The federal government now owns 80 percent of the company.

Do you feel a chill wind blowing?

A-witch hunting we will go
a witch hunting we will go
Heigh ho, the dairy-o, a-witch hunting we will go

This is Barack Obama's America.

I hope Frank will be as aggressive in demanding the names of the Fannie Mae executives set to get bonuses.

Awkward.
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Video of Frank and Liddy discussing Frank's demand that Liddy release the names of bonus recipients.

Liddy pushes back out of concern for the employees' safety, citing threats made against the employees and their family, even their children.

Absolutely sick.

Stephen Colbert, AIG, and Pitchforks

Is this comedy, or is this inciting violence?

The Colbert ReportMon - Thurs 11:30pm / 10:30c

Stephen's Angry Mob Will Crush AIG

Colbert Report Full Episodes
Political Humor

Mark Sanford
NASA Name Contest

From the Washington Post:

A tidal wave of public outrage over bonus payments swamped American International Group yesterday. Hired guards stood watch outside the suburban Connecticut offices of AIG Financial Products, the division whose exotic derivatives brought the insurance giant to the brink of collapse last year. Inside, death threats and angry letters flooded e-mail inboxes. Irate callers lit up the phone lines. Senior managers submitted their resignations. Some employees didn't show up at all.

"It's a mob effect," one senior executive said. "It's putting people's lives in danger."

Are death threats funny?

Are they entertainment?

Sadly, they are for some.

Obama Stands by Geithner

As his Treasury Secretary Tim Geithner comes under fire that's growing increasingly intense, Barack Obama is standing by his man.

From AP:

Standing on the White House lawn as he prepared to go to California, Obama again called AIG's executive bonuses "outrageous." But he said the problem goes deeper than that.

He's leaving Washington during this crisis?

He's going to California to appear on the Tonight Show with Jay Leno.

Should he be doing that during an emergency? Should he be doing it at all?

"Just as outrageous is the culture that these bonuses are a symptom of, that has existed for far too long: excess greed, excess compensation, excess risk-taking," he said.

"As we work toward getting outselves out of the recession, I hope that Wall Street and the marketplace doesn't think that we can return to business as usual," he said.

Code for socialism.

"The buck stops with me," Obama told reporters.

HAHAHA! Is Obama trying out material for his TV spot with Leno? That one's good. He should that for a laugh.

Obama also said he has "complete confidence" in Treasury Secretary Timothy Geithner, whose handling of the situation with AIG has come under harsh criticism in Congress.

Obama said that Geithner has been "making all the right moves in playing a bad hand."

GEITHNER WASN'T DEALT A "BAD HAND."

He chose it.

Give me a break. Geithner crafted the bailout.

Now, Obama himself has used the words "complete confidence" when referring to Geithner.

Yesterday, Rahm Emanuel and Robert Gibbs both said "complete confidence."

Of course, Obama has stood by his man before and then has done an about-face.

Jeremiah Wright comes to mind.

Tom Daschle is another.

If I were Geithner, I wouldn't feel too confident about Obama's confidence.

Obama, Geithner, and "Complete Confidence"

UPDATE: Geithner Caves on AIG Bonuses, Defends Liddy
_______________

This AIG thing is really turning into a mess for the Democrats.

Questions about Barack Obama's confidence in Treasury Secretary Tim Geithner are swirling.

From the New York Times:

The White House and Treasury have been besieged by questions about why Mr. Geithner did not know sooner about the bonus payments due this month, and whether he could have done more to stop them, prompting White House officials to assert President Obama’s continued confidence in Mr. Geithner.

“He more than has the president’s complete confidence,” said Rahm Emanuel, the White House chief of staff. As angry as the president is at the news about A.I.G., which he learned Thursday, Mr. Emanuel said, “his main priority is getting the financial system stabilized, and he believes this is a big distraction in that effort.”

Yeah. Incompetence often is a big distraction, Rahm.

From an AP analysis, written by Laurie Kellman:

"The president has complete confidence" in Geithner, [White House press secretary Robert] Gibbs said.

Both Emanuel and Gibbs used "complete confidence." What a coincidence!

Is Obama satisfied that Geithner informed him of the impending bonus payments in a timely fashion?

"Yes, the president is satisfied," Gibbs replied.

Those, of course, are statements that wouldn't need to be made if Geithner's status were clear. Not just a president's confidence, but his "complete confidence" can be a well-worn political signal that the subject should start circulating a resume.

AIG is the demonized insurance giant now 80 percent owned by the government after getting $170 billion in federal bailout funds to pay money it owed to U.S. and foreign banks. Geithner told senior White House officials about the bonuses last Thursday and they in turn told Obama the same day, according to a timetable provided by the White House.

Geithner sent a flurry of letters to lawmakers Tuesday night on measures he's taking—including bringing in Attorney General Eric Holder—to try to recover as much of the bonuses as possible.

For the time being, Geithner, formerly president of the New York Federal Reserve Bank, remains a key player in the gargantuan task of slowing the worst economic downturn since the 1930s.

But his future could soon be as murky as the economy's. His short tenure has been shaky at a time when the new president and the Democratic-led Congress are trying to project confidence to the markets and the nation.

When asked, Democrats issued statements of support for Geithner that ranged from concise to vague, but none called for his resignation.

Resignation?

It seems the lib media are frustrated with Geithner. First, they had to excuse his tax evasion. But they were sold on his brilliance and they wanted to give Obama anyone he wanted. Now, Geithner is revealed to be clueless and sloppy and not at all the man they made him out to be.

Regarding this AIG mess, Mark Levin made an interesting point on his radio show Tuesday. He said that this is a Democrat scandal.

After playing clips of Chuck Schumer, Harry Reid, Barbara Boxer, and Barney Frank criticizing AIG and calling for the return of the bonuses, Levin noted that they all supported and voted for the stimulus bill that includes Chris Dodd's amendment assuring the bonuses would be paid.

The lib media are missing in action. They have failed to blame Dodd for sticking this amendment in the stimulus bill. The lib media aren't noting the utter hypocrisy of Dodd and other Dems now running around threatening to enact a law to tax the bonuses in order to regain the money if it's not returned to the government voluntarily.

The bonuses were paid because they were protected under the stimulus bill.

Levin points out that not a single Republican House member voted for the bill. Nearly all Dem House members voted for it. Every Senate single Dem voted for it and three Republicans -- Arlen Specter, Olympia Snowe, and Susan Collins. It was overwhelmingly a Dem creation.

The Dems voted to award the AIG bonuses.

Most importantly, Barack Obama signed the bill. HE SIGNED IT. He signed it with great fanfare in Denver.

Weird that Obama's outraged over the bill that he insisted had to be passed so quickly.

He should be held accountable for failing to veto it. It's that simple.

The bonuses account for just 1/1000 of the bailout, yet they are the lightning rod du jour. Naturally, the Democrats are exploiting that, waging class warfare, and feigning outrage because they see it as a politically smart move.

But the fact is this AIG bonus thing is their baby.

In terms of accountability, remember that Herb Kohl and Russ Feingold both voted for the stimulus bill. They voted FOR the AIG bonuses.

The Dems have been in power for just two months and look how royally they've managed to screw up already.

Quite an accomplishment.
______________

Read Lawrence Kudlow: The AIG Outrage

[A]s for the $165 million or so in AIG bonus payments, the Obama administration -- including the president, Treasury man Tim Geithner, and economic adviser Larry Summers -- knew all about them many months ago. They were undoubtedly informed of this during the White House transition.

So there’s no big surprise. Nobody should be shocked. But President Obama is doing his best play-acting ever. He knows full well that the nationwide outcry against federal bailouts and takeovers is only going to get worse on his watch. His poll numbers are already falling, and this AIG episode is going to pull them down more.

...And what is Treasury man Geithner’s role in all this? He appears to be the biggest bungler in what has become a massive bungling. My CNBC friend and colleague Charlie Gasparino thinks Geithner can’t survive this. I am inclined to agree.

Chuck Schumer Warns AIG Bonus Recipients

Chuck Schumer, on the floor of the Senate, is talking like a street thug.

VIDEO.

His colleagues are joining him in demanding that legal contracts be disregarded. They are promising that bonuses protected under the law, thanks to an amendment added by Chris Dodd to the recently passed stimulus bill, will be stripped from their recipients.

WASHINGTON (AP) -- Senate Democrats vowed Tuesday to all but strip AIG executives of their $165 million in bonuses, as expressions of outrage swelled in Congress over eye-catching extra income for employees of a firm that has received billions in taxpayer bailout funds.

"Recipients of these bonuses will not be able to keep all of their money," declared Senate Majority Leader Harry Reid, in an unusually strong threat delivered on the Senate floor.

"If you don't return it on your own we will do it for you," said Chuck Schumer of New York.

The bonuses were paid legally, part of a program that had been disclosed in advance in filings that American International Group Inc. made with the government.

Senate Democrats threatened to tax the bonuses at up to 91 percent through narrowly written legislation, said Schumer, if AIG does not return the money voluntarily. Republicans have said President Barack Obama should have done more to prevent the executives from accepting the bonuses in the first place.

Senate Finance Committee Chairman Max Baucus asked, "What is the highest excise tax we can impose that will stand up in court? Let's find out what it is."

In the House, Reps. Steve Israel, D-N.Y., and Tim Ryan, D-Ohio, introduced a bill that would that would tax at 100 percent bonuses above $100,000 paid by companies that have received federal bailout money.

...New York Attorney General Andrew Cuomo said he has issued subpoenas for the names of AIG employees given bonuses despite their possible roles in its near-collapse. Cuomo said his office will investigate whether the bonus payments are fraudulent under state law because they were promised when the company knew it wouldn't have the money to cover them. AIG reported this month that it lost $61.7 billion in the fourth quarter of last year, the largest corporate loss in history, and it has benefited from more than $170 billion in a federal rescue.

This is ridiculous. It's a witch hunt.

Are the salaries that members of Congress accept fraudulent because the government doesn't have the money to cover them?

These people need to take a deep cleansing breath and think about what they're saying.

These threats, this thug mentality, is disturbing.

More from Schumer, USA Today:

Congress began a push Tuesday to get back some of the $165 million that insurance giant AIG paid to executives who drove the company into financial ruin before it was rescued by a government bailout.

Senate Majority Leader Harry Reid said the tax-writing Senate Finance Committee will issue a proposal in the next day or so that would require American International Group to return to the government at least a portion of the bonuses paid out last week. And Sen. Charles Schumer, D-N.Y., proposed legislation Tuesday.

"This is disgraceful, this is unacceptable and this is an offense to millions of hard working Americans whose tax dollars are the only reason AIG continues to exist," Schumer, speaking on the Senate floor, said of the bonuses. "We intend to do everything in our power to prevent those payments from being paid and recoup the money that has already been paid."

Schumer said he wrote a letter to AIG chief Edward Liddy urging him to tell his employees to voluntarily return the bonus money. Otherwise, Schumer said, Congress will pass legislation that would tax the bonus money at such a high rate that the AIG employees will be forced to pay it back through taxes.

"If you don't return it on your own we will do it for you," Schumer said.

Thug.

Here's more from Thug Schumer:

"If Mr. Liddy does nothing we will act and we will take this money back and return it to its rightful owners the taxpayers," Schumer warned. "So for those of you who are getting these bonuses, be forewarned -- you will not be getting to keep them."

We should all be "forewarned."

What the Dems giveth, the Dems taketh away.

Chris Dodd and Campaign Donations from AIG

Chris Dodd should be cowering in a corner rather than shooting off his mouth about AIG.

Senator Chris Dodd (D-Conn.) on Monday night floated the idea of taxing American International Group (AIG: 0.9266, 0.1465, 18.78%) bonus recipients so the government could recoup some or all of the $450 million the company is paying to employees in its financial products unit. Within hours, the idea spread to both houses of Congress, with lawmakers proposing an AIG bonus tax.

The move represents somewhat of an about-face for the Senator.

While the Senate was constructing the $787 billion stimulus last month, Dodd added an executive-compensation restriction to the bill. That amendment 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.

The amendment made it into the final version of the bill, and is law.

Separately, Sen. Dodd was AIG’s largest single recipient of campaign donations during the 2008 election cycle with $103,100, according to opensecrets.org.

Dodd's hypocrisy is stunning.

It's like Tim Geithner.

The very people responsible for the AIG bailout and the bonuses are the ones expressing their outrage and demanding that their own work be undone.

Dodd got more campaign money from AIG than anyone during the 2008 election.

He added an amendment to the stimulus bill to protect their bonuses.

It's law. Now he wants it rescinded?

Talk about political posturing!

Charles Grassley, AIG Executives, and Suicide

UPDATE: Grassley: AIG execs should repent, not kill selves

[Grassely] backtracked Tuesday morning in a conference call with reporters. He said he would like executives of failed businesses to make a more formal public apology, as business leaders have done in Japan.

"What I'm expressing here obviously is not that I want people to commit suicide. That's not my notion," Grassley said Tuesday. "But I do feel very strongly that we have not had statements of apology, statements of remorse, statements of contrition on the part of CEOs of manufacturing companies or banks or financial services or insurance companies that are asking for bailouts."

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Charles Grassley has been a U.S. senator since 1981.

You can't really blame his idiotic remarks on inexperience.

From Politico:

Sen. Charles Grassley is so angry over AIG bonuses that he says the executives should resign or kill themselves.

In a comment aired this afternoon on WMT, an Iowa radio station, Grassley (R-Iowa) said: “The first thing that would make me feel a little bit better towards them if they’d follow the Japanese model and come before the American people and take that deep bow and say I’m sorry, and then either do one of two things — resign, or go commit suicide.”

...In response to a POLITICO inquiry, Grassley spokeswoman Jill Gerber clarified Grassley’s comments, saying “clearly he was speaking rhetorically – he meant there’s no culture of shame and acceptance of responsibility for driving a company into the dirt in this country. If you asked him whether he really wants AIG executives to commit suicide, he’d say of course not.”

“Point being, U.S. corporate executives are unapologetic about running their companies adrift, accepting billions of tax dollars to help, and then spending those tax dollars on travel, huge bonuses, etc,” Gerber said.

Was Grassley really recommending that AIG execs should commit suicide?

No.

Was it an appropriate comment?

Absolutely not.

Suicide is no joke.

Questions:

Are all the recipients of the bonuses responsible for "driving [AIG] into the dirt"?

Is it possible that at least some of the executives behaved responsibly?

Do all the AIG execs deserve to be excoriated? Probably not.

Obama: No Bonuses for You, AIG

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Obama's use of the teleprompter drives me nuts.

Look left, then right, then left, then right, then left....

Obama's mad, as are others. So what?

Does that mean a contract to pay out bonuses should be undercut?

If so, is there some sort of "statute of limitations" on the contracts made by companies before receiving government cash?

Does the government have the right to break contracts and impose its will on all the company's dealings?

When does the private sector cease being allowed to function as the private sector?

When it's politically expedient for Obama and the Democrats?

Geithner: AIG Bailout and Bonuses

UPDATE, March 18, 2009: Geithner Caves on AIG Bonuses, Defends Liddy
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UPDATE: Obama: AIG can't justify 'outrage' of exec bonuses

President Barack Obama declared Monday that insurance giant American International Group is in financial straits because of "recklessness and greed" and said he intends to stop it from paying out millions in executive bonuses.

"It's hard to understand how derivative traders at AIG warranted any bonuses, much less $165 million in extra pay," Obama said at the outset of an appearance to announce help for small businesses hurt by the deep recession.

..."How do they justify this outrage to the taxpayers who are keeping the company afloat," the president said.

...Noting that AIG has "received substantial sums" of federal aid from the federal government, Obama said he has asked Treasury Secretary Timothy Geithner "to use that leverage and pursue every legal avenue to block these bonuses and make the American taxpayers whole."

Obama, Geithner, Barney Frank, and others are yapping about the outrage of the bonuses.

Obama doesn't slam Geithner for his role in structuring the AIG bailout. Not one word.

Last fall, Geithner wasn't concerned about bailout money being used for bonuses. He didn't attach strings, like no bonuses, when he put together the bailout.
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Treasury Secretary Timothy Geithner is a train wreck.

This supposedly brilliant man, so brilliant and so critical to solving the economic crisis that his tax cheating ways were excused, is a screw-up. He's a bungler. He's in way over his head.

Example: The $165 million in bonuses that AIG plans to pay out after it received the $170 billion taxpayer bailout.

From the New York Times:

Obama administration officials and Republicans alike were nearly universal in condemning the $165 million in bonuses that the American International Group, which has received more than $170 billion in taxpayer bailout money from the Treasury and Federal Reserve, is to pay executives in the business unit that brought the company to the brink of collapse last year.

“There are a lot of terrible things that have happened in the last 18 months, but what’s happened at A.I.G. is the most outrageous,” said Lawrence H. Summers, President Obama’s chief economic adviser, during an appearance Sunday on ABC’s “This Week With George Stephanopoulos.” “What that company did, the way it was not regulated, the way no one was watching, what’s proved necessary — is outrageous.”

The bonus plan established for the financial products unit before the federal government stepped in called for $220 million in retention pay for 400 employees for 2008. About $55 million of that was paid in December and the remaining $165 million was paid on Friday.

The retention plan also calls for another $230 million in bonuses for 2009 that are due to be paid by March 2010. Combined with the 2008 bonuses, that would bring the total retention pay for financial products executives to $450 million. But in response to pressure from Treasury Secretary Timothy F. Geithner, A.I.G. agreed to reduce its 2009 bonuses for the financial products unit by 30 percent.

The payments to executives in that unit are in addition to $121 million in previously scheduled bonuses for the company’s senior executives and 6,400 employees across the sprawling corporation. Last week, Mr. Geithner pressured A.I.G. to cut the $9.6 million going to the top 50 executives in half and tie the rest to performance.

The payment of so much money at a company at the heart of the financial collapse that sent the broader economy into a tailspin will almost certainly fuel a popular backlash against the government’s efforts to prop up Wall Street.

Word of the bonuses last week stirred such deep consternation inside the Obama administration that Mr. Geithner told the firm they were unacceptable and demanded they be renegotiated, a senior administration official said. But the bonuses will go forward because lawyers said the firm was contractually obligated to pay them.

Austan Goolsbee, staff director of the president’s Economic Recovery Advisory Board, on Sunday detailed Mr. Geithner’s reaction.

“He stepped in and berated them, got them to reduce the bonuses following every legal means he has to do this,” Mr. Goolsbee said on “Fox News Sunday.” “I don’t know why they would follow a policy that’s really not sensible, is obviously going to ignite the ire of millions of people, and we’ve done exactly what we can do to prevent this kind of thing from happening again.

Mr. Summers suggested that the government’s ability to require the bonuses be scaled back was restricted by preexisting contracts, even though he did not specify what those restrictions may be.

“We are a country of law,” said Mr. Summers, one of several economic officials to hit the Sunday-morning talk show circuit. “There are contracts. The government cannot just abrogate contracts. Every legal step possible to limit those bonuses is being taken by Secretary Geithner and by the Federal Reserve system.”

People seem to be forgetting Geithner's role in bailing out AIG

From The American Spectator, November 24, 2008:

Geithner became the go-to guy for failing financial firms, and was at the "center of action" for the AIG bailout, according to the New York Post. He "quarterbacked and advised" the government's "taking control of tottering insurance giant AIG for a bailout deal," the Post wrote. But more and more, it looks like [Henry] Paulson and Geithner "quarterbacked" with a flawed playbook with AIG that moved the meltdown much further down the goal line.

Geithner was the architect of the AIG bailout.

He hammered out the deal. He was at the "center of the action."

Complaints about contractual obligations for millions in bonuses to be dispensed after AIG was saved thanks to the $170 billion taxpayer bailout should be submitted to Geithner.

His fingerprints are all over the AIG bailout.

From the Los Angeles Times:

[Lawrence] Summers said Geithner used all his power, "both legal and moral, to reduce the level of these bonus payments."

But one leading academic in the national policy debates said Geithner should have reined in AIG compensation when, in his former role as the head of the New York Federal Reserve Bank, he was working with Bush administration Treasury Secretary Henry M. Paulson to negotiate the first round of bailouts.

Geithner "should be embarrassed," said Peter Morici, a University of Maryland business professor and former chief economist for the U.S. International Trade Commission.

"When the Bush White House agreed to bail out General Motors and Chrysler, it required those companies to renegotiate their labor contracts," Morici said.

"Why did Secretaries Paulson and Geithner not require the same at AIG? The threat was the same with AIG and GM. If either shut down, the economy would plummet into chaos and depression, we were told," Morici said.

Robert Gorges, a retired Ralphs grocery worker from Highland, near San Bernardino, agreed.

Auto workers, he said, "had a contract but they did the right thing, knowing their company was in bad financial trouble. They changed their contract," he said. "Not the same can be said about AIG," Gorges said in his e-mail to The Times. "Something is wrong here."

Yes, something is wrong here.

Geithner is part of the problem. He bears responsibility for this mess. He "should have reined in AIG compensation when, in his former role as the head of the New York Federal Reserve Bank, he was working with Bush administration Treasury Secretary Henry M. Paulson to negotiate the first round of bailouts."

He should have reined in compensation as part of the deal, but the genius Geithner failed to do so.

I agree with Morici. Geithner "should be embarrassed."

If Geithner believes that the government should determine how bailout money is used once it's transferred to the private sector, then he should have taken measures to do so with the AIG bailout.

Geithner complaining about the bonuses now makes him look like a fool.

I think Barack Obama should be embarrassed as well, for assembling a team of incompetents.