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AIG CEO Faces Congressional Questioning
By
Jen Chung
Published Mar 18, 2009
Modified Mar 18, 2009
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By
Jen Chung
Published Mar 18, 2009
Modified Mar 18, 2009
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AIG CEO Edward "We're Legally Obligated to Pay Millions to Executives Who Helped Bring the Company Down" Liddy is scheduled to face questions from Congress's Financial Services Committee today. Yesterday, Liddy wrote an op-ed in the Washington Post, "The anger is understandable, and I share it... No one knows better than I do that AIG has been the recipient of generous amounts of government financial aid. We are acutely aware not only that we must be good stewards of the public funds we have received but that the patience of America's taxpayers is wearing thin."
The Obama administration says AIG must repay the bonuses before getting $30 billion in bailout money (AIG has been given/promised $170 billion all told) and yesterday NY Attorney General Andrew Cuomo detailed the extravagant bonuses AIG execs 73 received retention bonuses of $1 million or more—and funnily enough, 11 no longer work there! That's a really awesome retention bonus—sign us up. Cuomo's letter to Rep. Barney Frank is good reading, too:
Furthermore, we know that AIG was able to bargain with its Financial Products employees since these employees have agreed to take salaries of $1 for 2009 in exchange for receiving their retention bonus packages. The fact that AIG engaged in this negotiation flies in
the face of AIG's assertion that it had no choice but to make these lavish multi-million dollar bonus payments. It appears that AIG had far more leverage than they now claim...The contracts shockingly contain a provision that required most individuals' bonuses to be 100% of their 2007 bonuses. Thus, in the Spring of last year, AIG chose to lock in bonuses for 2008 at 2007 levels despite obvious signs that 2008 performance would be disastrous in comparison to the year before.
Read the whole letter here (PDF).
Some Congressional representatives are suggesting that AIG executives' bonuses be taxed at 100%. And Politico has five questions for Liddy expected to be posed by Congress, including, "Can AIG survive without additional government money?"
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Jen Chung
Jen Chung is a former WNYC and Gothamist editor.
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