Anybody else recall certain republican Congress members insisting after the first bank bailout that there was no monitoring or watch-dogging going on as to how those who received the bailout money was spending it?
BTW, AIG had these bonuses pre-planned before the bailout … Congress, if they were “smart” would have looked into that and insisted before handing over money that the bank either cease or cutback any and all bonuses. But, as usual, it’s all political theater of indignation with these ass clowns.
White House May Want AIG Money Back
Administration Investigates Ways To Retrieve Some Of The Millions AIG Used For Bonuses
The Obama administration is looking for ways to recoup at least some of the $165 million American International Group, Inc. paid out in bonuses over the weekend, despite accepting billions in government aid to stay afloat, reports CBS News correspondent Peter Maer.
The White House continues to negotiate with AIG to bring any payments in line with the government’s priorities, an administration official told CBS News.
President Barack Obama is scheduled to speak Monday morning on AIG while rolling out his plan to help small businesses. He’s expected to voice anger over the bonuses and could elaborate on administration efforts to recover some of the money, reports Maer.
The administration official said that the bonuses “long been known about inside and outside AIG. But we didn’t want to accept them.”
The White House is seeking what are described as “mechanisms” to recover money spent on bonuses, but the company insists some of the bonuses are part of legally binding contracts signed before the government’s bailout.
The administration is concerned that public reaction to the bonuses could affect the president’s overall economic agenda, reports Maer.
“It is unacceptable for Wall Street firms receiving government assistance to hand out million dollar bonuses, while hard-working Americans bear the burden of this economic crisis,” the official told CBS News.
Meanwhile, AIG disclosed Sunday that it used more than $90 billion in federal aid to pay out foreign and domestic banks, some of whom had received their own multibillion-dollar U.S. government bailouts.
Some of the biggest recipients of the AIG money were Goldman Sachs at $12.9 billion, and three European banks – France’s Societe Generale at $11.9 billion, Germany’s Deutsche Bank at $11.8 billion, and Britain’s Barclays PLC at $8.5 billion. Merrill Lynch, which also is undergoing federal scrutiny of its bonus plans, received $6.8 billion as of Dec. 31.
Lawrence Summers, Director of the White House National Economic Council, said on CBS’ Face The Nation on Sunday that the AIG bonuses were “outrageous… The whole situation at AIG is outrageous. What taxpayers are being forced to do is outrageous.”
The company, now about 80 percent owned by U.S. taxpayers, has received roughly $170 billion from the government, which feared that its collapse could cause widespread damage to banks and consumers around the globe.
In an exclusive interview aired Sunday on 60 Minutes, Federal Reserve Chairman Ben Bernanke spoke with unusual candor of the frustration he felt in bailing out AIG.
“Of all the events and all of the things we’ve done in the last 18 months, the single one that makes me the angriest, that gives me the most angst, is the intervention with AIG,” Bernanke told 60 Minutes correspondent Scott Pelley.
“Here was a company that made all kinds of unconscionable bets. Then, when those bets went wrong, we had a situation where the failure of that company would have brought down the financial system,” Bernanke said.
“It makes me angry. I slammed the phone more than a few times on discussing AIG. I understand why the American people are angry. It’s absolutely unfair that taxpayer dollars are going to prop up a company that made these terrible bets, that was operating out of the sight of regulators, but which we have no choice but to stabilize, or else risk enormous impact, not just in the financial system, but on the whole U.S. economy,” he told Pelley.
The $90 billion chunk of the bailout money went to banks to cover AIG’s losses on complex mortgage investments, as well as for collateral needed for other transactions.
Other banks receiving between $1 billion and $3 billion from AIG’s securities lending unit include Citigroup Inc., Switzerland’s UBS AG and Morgan Stanley.
Municipalities in certain states, including California, Virginia and Hawaii, received a total of $12.1 billion under guaranteed investment agreements.
Lawmakers Target AIG Over Executive Bonuses
Rep. Barney Frank says American International Group is “rewarding incompetence” by paying out millions in bonuses.
Key lawmakers are calling for the government to crack down on American International Group after learning the bailed-out insurance giant is going ahead with plans to pay $165 million dollars in bonuses to its executives.
Though AIG Chairman Edward Liddy claims his hands are contractually tied, Rep. Barney Frank, D-Mass., said Monday he’s not convinced.
“I want to look at it very carefully,” said the chairman of the House Financial Services Committee. “These people may have a right to their bonuses — they don’t have a right to their jobs forever.”
Appearing on NBC’s “Today” show, Frank noted that federal government “is the 80 percent owner” of the company and has some leverage.
“Maybe it’s time to fire some people,” he said, adding that the bonuses were “rewarding incompetence.”
“Forget about the legal matter here for a second,” Frank said. “These bonuses are going to people who screwed this thing up enormously, who made terrible decisions.”
A subcommittee for Frank’s panel plans to call Liddy to testify during a hearing on Wednesday.
Paul Kanjorski, D-Pa., chairman of the subcommittee, said in a statement that lawmakers would investigate the bonuses at the hearing.
“We cannot allow individuals who acted irresponsibly to reap undue benefits,” he said.
The $165 million was payable to executives by Sunday and was part of a larger total payout reportedly valued at $450 million. The company has benefited from more than $170 billion in a federal rescue.
AIG reported this month that it had lost $61.7 billion for the fourth quarter of last year, the largest corporate loss in history. The bulk of the payments at issue cover AIG Financial Products, the unit of the company that sold credit default swaps, the risky contracts that caused massive losses for the insurer.
It also was revealed over the weekend that American International Group Inc. used more than $90 billion in federal aid to pay out foreign and domestic banks, some of whom had received their own multibillion-dollar U.S. government bailouts.
Some of the biggest recipients of the AIG money were Goldman Sachs at $12.9 billion, and three European banks — France’s Societe Generale at $11.9 billion, Germany’s Deutsche Bank at $11.8 billion, and Britain’s Barclays PLC at $8.5 billion. Merrill Lynch, which also is undergoing federal scrutiny of its bonus plans, received $6.8 billion as of Dec. 31.
The money went to banks to cover their losses on complex mortgage investments, as well as for collateral needed for other transactions.
On ABC’s “Good Morning America” Monday, Sen. Richard Shelby said Congress must do everything it can to make sure the government money going to AIG is handled appropriately.
“We ought to explore everything that we can through the government to make sure that this money is not wasted,” the Alabama Republican said. “These people brought this on themselves. Now you’re rewarding failure. A lot of these people should be fired, not awarded bonuses. This is horrible. It’s outrageous.”
AIG has agreed to Obama administration requests to restrain future payments. Treasury Secretary Timothy Geithner pressed the president’s case with Liddy last week.
“He stepped in and berated them, got them to reduce the bonuses following every legal means he has to do this,” said Austan Goolsbee, staff director of President Barack Obama’s Economic Recovery Advisory Board, told “FOX News Sunday.”
Lawrence Summers, a leading Obama economic adviser, said Sunday that Geithner had used all his power, “both legal and moral, to reduce the level of these bonus payments.”
In an interview that aired Sunday on CBS’ “60 Minutes,” Federal Reserve Chairman Ben Bernanke did not address the bonuses but expressed his frustration with the AIG intervention.
“It makes me angry. I slammed the phone more than a few times on discussing AIG,” Bernanke said. “It’s — it’s just absolutely — I understand why the American people are angry.”
In a letter to Geithner dated Saturday, Liddy said outside lawyers had informed the company that AIG had contractual obligations to make the bonus payments and could face lawsuits if it did not do so.