WASHINGTON (AP) -- 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.
Obama spoke out in the wake of reports that surfaced over the weekend saying that financially strapped American International Group Inc. was paying substantial bonuses to executives.
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."
Said Obama: "All across the country, there are people who work hard and meet their responsibilities every day, without the benefit of government bailouts or multimillion-dollar bonuses. And all they ask is that everyone, from Main Street to Wall Street to Washington, play by the same rules."
"This isn't just a matter of dollars and cents," he added. "It's about our fundamental values."
POS Bush pushed this country into Socialism by bailing out failed insitutions with tax payer money but then just like an ignorant Rep, didn't bother putting in any oversight.
I'm sure the Reps will have a problem with Obama over this. I mean after all if you're limiting bonuses then you might lose all of that "talent" that caused this problem in the first place.
In an effort to be more "bipartisan" I need to give credit where credit is due. Good job on this one Obama!
NY atty gen to probe AIG bonuses for fraud
NY attorney general to investigate whether AIG bonus payments constituted fraud
Monday March 16, 2009, 1:32 pm EDT
Buzz up! Print ALBANY, N.Y. (AP) -- New York state's attorney general is demanding that American International Group have details on his desk this afternoon about who is getting its multimillion-dollar bonuses.
Attorney General Andrew Cuomo says his office will investigate whether recipients of the payments were involved in the insurance giant's decline and whether the payments are fraudulent under state law.
President Barack Obama declared Monday that he plans to stop AIG from paying the executive bonuses.
Cuomo said he would issue subpoenas at 4 p.m. Monday if he didn't get the names of employees scheduled for bonuses plus information about their work and contracts.
Cuomo said he's been investigating AIG compensation arrangements since last fall.
chupacabra .... alot more will get better give it time ........
The real scandal of AIG isn't just that American taxpayers have so far committed $170 billion to the giant insurer because it is thought to be too big to fail -- the most money ever funneled to a single company by a government since the dawn of capitalism -- nor even that AIG's notoriously failing executives, at the very unit responsible for the catastrophic credit-default swaps at the very center of the debacle -- are planning to give themselves $100 million in bonuses. It's that even at this late date, even in a new administration dedicated to doing it all differently, Americans still have so little say over what is happening with our money.
The administration is said to have been outraged when it heard of the bonus plan last week. Apparently Secretary of the Treasury Tim Geithner told AIG's chairman, Edward Liddy (who was installed at the insistence of the Treasury, in the first place) that the bonuses should not be paid. But most will be paid anyway, because, according to AIG, the firm is legally obligated to do so. The bonuses are part of employee contracts negotiated before the bailouts. And, in any event, Liddy explained, AIG needed to be able to retain talent.
AIG's arguments are absurd on their face. Had AIG gone into chapter 11 bankruptcy or been liquidated, as it would have without government aid, no bonuses would ever be paid; indeed, AIG's executives would have long ago been on the street. And any mention of the word "talent" in the same sentence as "AIG" or "credit default swaps" would be laughable if it laughing weren't already so expensive.
Apart from AIG's sophistry is a much larger point. This sordid story of government helplessness in the face of massive taxpayer commitments illustrates better than anything to date why the government should take over any institution that's "too big to fail" and which has cost taxpayers dearly. Such institutions are no longer within the capitalist system because they are no longer accountable to the market. So to whom should they be accountable? When taxpayers have put up, and essentially own, a large portion of their assets, AIG and other behemoths should be accountable to taxpayers. When our very own Secretary of the Treasury cannot make stick his decision that AIG's bonuses should not be paid, only one conclusion can be drawn: AIG is accountable to no one. Our democracy is seriously broken.
AIG likely won’t be able to pay taxpayers back
Careful of the smoke and mirrors here. Political ploys all over the place on this one.
Stop giving private firms public money and this won't be a problem.