RSS
Home
Obama blasts AIG bonus payouts
Print
Email
RSS
Subscribe
Speaking before a group of small business owners, armed with a new plan to help struggling American employers keep their doors open, the President first expressed his anger with insurance giant AIG. 
President Barack Obama speaks to small business leaders, AP
President Barack Obama speaks to small business leaders, AP
President Barack Obama rhetorically asked, “How did they warrant any bonuses? How do they justify this to the tax payers that are keeping the company afloat?”
Late last week it was reported that American International Group would issue 165 million dollars to its executives in the form of bonuses. But AIG is not a normal company, it’s only surviving because of government infusions. So far it’s received almost 170 billion dollars in federal rescue funds, tax payer money, to keep the company afloat and financial markets falling further. Bailout funds apparently have not been helping to sure up AIG’s bottom line. In early March AIG records show the company lost 61.7 billion dollars in the fourth quarter of last year; the greatest loss in history for a large corporation.
During the tongue lashing of AIG, Mr. Obama choked up, explaining his anger was getting the best of him. The President reassured today’s audience that his administration “will pursue every legal avenue to block these bonuses.” He noted that Secretary of Treasury Timothy Geithner was already in talks with AIG chairman Edward Liddy. Obama says the two men will rectify the situation. “Everybody involved needs to know this is not just about dollars and cents, it’s about values,” said the President.
Liddy has defended AIG. He says the large bonus payouts were part of contracts set up in early 2008 before AIG fell into severe financial straits. In a letter to Geithner on Saturday Liddy wrote the company’s “hands are tied.” Liddy believes failure to make good on the contracts could lead to lawsuits.
While the bonuses may cause blood to boil, how can anyone be mad at AIG? It’s not as if the bailout money came with rules and regulations as to how it could be dispensed and to who. For months congressional committees have been asking for details on where the money went after they released federal tax dollars to AIG, Fannie Mae, Freddie Mac and other financial institutions. These are the same lawmakers who had to approve the funding in the first place. Why didn’t they attach terms to the deal if they wanted to know where the funds went and to whom? Why is it such a surprise that a company would use the money to fulfill its obligations?
The Obama administration is already learning from this situation. Over the weekend Geithner received a commitment from AIG that it will restrain future payments to executives. One former executive of a separate company says bonuses are often in lieu of an actual salary but the hefty price tag will still stop most Americans from understanding AIG’s plight.
For more info: Not first time Obama blasts AIG, WSJ
Special Report: Obama's First 100 DaysExclusive examiner.com coverage of the Obama administration's promise to bring about change.
More About:
Bailout ·
Banks ·
Kim McIntyre ·
Obama ·
White House ·
Washington ·
Geithner ·
first 100 days ·
economy ·
financial system ·
AIG ·
executive bonuses
Related Articles:
Add a Comment
Dodd claims the provision was intended to stop excessive executive compensation packages but aids to President Barack Obama’s administration …
Treasury Secretary Timothy Geithner laid out the long term initiative to rescue the nation's troubled financial system. Calling it the new Financial …
