Truly sad

[Klash]

TweetThe private sector is losing this war.

[When I see politicians this concerned - then we've hit a pivot point. This rage should not be directed at AIG but the legislators.]

[Whole Article]
Rage at AIG Swells As Bonuses Go Out
Fed Decided Payouts Couldn't Be Stopped

By Brady Dennis and David Cho
Washington Post Staff Writers
Tuesday, March 17, 2009; A01

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."

Politicians and the public spent yesterday demanding that AIG rescind payouts that they said rewarded recklessness and greed at a company being bailed out with $170 billion in taxpayer funds. But company officials contend that the uproar is scaring away the very employees who understand AIG Financial Products' complex trades and who are trying to dismantle the division before it further endangers the world's economy.

"It's going to blow up," said a senior Financial Products manager, who spoke on condition of anonymity because he was not authorized to speak for the company. "I have a horrible, horrible, horrible feeling that this is going to end badly."

President Obama yesterday vowed to "pursue every legal avenue to block these bonuses." But that pledge might have come too late. About $165 million in retention payments started to go out Friday to employees at Financial Products, after numerous discussions with the Treasury Department and the Federal Reserve.

Attorneys working for the Fed had been examining the matter for months and determined that the retention payments couldn't be touched because AIG would face costly lawsuits and be subject to penalties from states and foreign governments. Administration officials said over the weekend that they agreed with that assessment.

AIG disclosed its retention-payment program more than a year ago, and the amount of the bonuses -- more than $400 million for Financial Products alone -- had been widely reported. But as the payments were coming due in recent days, the White House began to express its indignation.

Pressure on the 370-person Financial Products unit, based primarily in Connecticut and London, grew even more intense yesterday when New York Attorney General Andrew M. Cuomo threatened to issue subpoenas if the company failed to provide details about recipients of the retention payments.

The payments represent only the most contentious of a larger group of bonuses being paid throughout AIG. The company's top seven officials, including chief executive Edward M. Liddy, agreed in November to forgo bonuses through this year.

After a Wednesday call between Liddy and Treasury Secretary Timothy F. Geithner, AIG agreed to restructure payments for the next 43 highest-ranking officers at the company, who are to receive half of their bonuses -- which total $9.6 million -- immediately, one-quarter July 15 and the rest Sept. 15. The last two payments would depend on whether the company makes progress in restructuring its business and paying back taxpayers. In addition, the company is set to pay another $600 million in retention awards to about 4,700 people throughout its global insurance units.

But each dollar remains in question after the president's reprimand yesterday and the deluge of rage from legislators and the American public. Government leaders already say they plan to recoup some of the bonus and retention pay while restructuring the company. In addition, administration officials said that the Treasury is planning to try to recover some of the bonus money by adding provisions to the additional $30 billion it gave AIG access to earlier this month.

The payment plan had been no secret.

Beginning in the first quarter of 2008, AIG disclosed the plan to offer retention awards at Financial Products. The unit had already begun to hemorrhage money, a problem that would later grow exponentially. The unit's executives, fearing they might lose valuable employees in the tumultuous months to come, successfully negotiated more than $400 million for their workers, to be paid this month and again next year.

At the Federal Reserve Bank of New York, which has directly overseen AIG since its federal takeover in September, officials have studied the possibility of rescinding or delaying the bonuses. They even brought in outside lawyers for advice. The conclusion: If the bonuses weren't paid, the AIG staffers would be able to sue the company and probably would win, not just what they were owed but also punitive damages that would make the ultimate cost perhaps two to three times as high as the bonuses themselves.

Moreover, Fed officials also hope to keep current employees with the company. The senior executives whose decisions caused the company's collapse are long gone. Most of those left behind are trying to unwind complicated derivative contracts. Completing that process correctly is essential to preserving as much value as possible for taxpayers, officials at both the government and AIG have argued. If it is mishandled, it could expose taxpayers to billions of dollars in additional losses.

Law professors agreed with the Fed's assessment but said AIG employees could still agree to reduce their own bonuses.

And the outrage expressed by the president and lawmakers was designed to put pressure on these officers to do just that, the legal experts said.

Jonathan Macey, a professor at Yale Law School, said it was unlikely that any AIG employees would end up suing the company for changing compensation contracts, mainly because their names would be revealed publicly in a lawsuit and they would then be excoriated.

Macey added that the government is caught in a difficult position, squeezed between public outrage over the bonuses and the need to keep AIG Financial Products going so the company can restructure and the government can recoup some of its money.

"What's good for AIG is definitely not good for the country," Macey said. "But now that the government is invested, it may have to do what's good for AIG."

Liddy is scheduled to appear tomorrow in front of a House financial services subcommittee.

[daved150]

Tweetwow...tuff situation. i'm not one to say "dont honor their contracts"...although they've done a terrible job over all, i dont know what the individuals recieving the bonus did to warrent a bounus. there must have been something in their pay to warrent that. i have a minimum "bounus" type thing in my pay plan in-order to insure that i make "X" amount of dollars that i needed to survive just to work here. the place i worked for notified me, ON PAY DAY, that they were not able to pay me that money!! i know how ABSOLUTELY PISSED i am about that!! i needed that money! and, becouse the situation being what it is up here, i dont have another option right now. my hearts NOT in my job. i'm NOT utilizing my skills...nearly at all!! and the first chance i get to bounce....i'm gone!!

it may be a little different, but i dont really know exactly how. i'm not sticking up for any of them...i'm just saying....a deals a deal! thats how i do biz...thats how i expect you to do biz with me

[Klash]

TweetGiven that the company probably wouldn't have ever been in that situation if it wasn't for the government forcing them to hold subprime and questionable loans. I think it is hilarious that Chris Dodd (D) is the one that authored the amendment that allowed the bonus' in the first place. Plus, our government has given other nations $62 billion as part of the bailout and people are outraged over $165 million? Our outrage should be at the phucking legislators - they should be the ones fearing for their safety but this shows how successful the progressive moment is as distracting the citizens.

[Testify]

TweetI definitely feel for the stress that individual employees are experiencing from the public protest and threats. That is a difficult and unfortunate situation for those people and their families. But awarding bonuses after being subsided by our legislative branch of government is shockingly arrogant - and perhaps the dumbest action a company could take under such these circumstances . . . the executives at AIG should be thankful that they continue to exist . . . this baffles me. And this occurs AFTER their much scrutinized and ridiculed multi-million dollar company retreat . . . they need some new management. This is uncacceptable - and this opinion comes from somoenoe who holds a Masters degree - unacceptable. Contracts are a tricky thing, but this should have been managed better. AIG has fallen flat on their faces again, and I can hardly believe they are so out of touch with the American public. This is sickening. I would take a pay cut to have the opportunity to retain my old job, and AIG employees are rewarded (even if individually this is right) for their company's catastrophic management failures. I am shocked by this news.

[FUZO]

Tweetthe republicans wanted to write in something just for this happening and mr dick head oblojama didnt write anything in when he got into office.Obama may talk like he thinks this is bad but deep down he wants them to get there bonuses who's he fuking kidding

[daved150]

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the republicans wanted to write in something just for this happening and mr dick head oblojama didnt write anything in when he got into office.Obama may talk like he thinks this is bad but deep down he wants them to get there bonuses who's he fuking kidding

i dont know bro...if i remember right, it was bush's guy, pulson, who handed them the bag of money in the beginning, with no strings attatched....this whole thing was pushed through before obama had any say in it

[Klash]

TweetHow is anyone sickened at the private company and not the government. Every citizen feels like they have given someone charity and that person went and spent it on booze. Everyone is ignoring the fact it wasn't charity - that's just how the progressives spin it. It was a redistribution of wealth taken from the citizens by force and given to AIG. Now, the citizens feel betrayed by AIG. It's like getting mad at the homeless man a theif gave your money too. And what was the catalyst of the AIG failure? Government legislation tying the hands of the private sector. Then when companies in the private sector fail because of government intervention, then bailed out by government and then when the money isn't spent like the "working class" wants, the government justifies even more control? WTF

It's like someone forcing you to shoot your foot and then suggesting you should shoot your head off to stop the pain.

I could give a phuck about AIG, this whole situation was manifested by government legislators but they won't take the blame and they don't have to. Because people don't require it, people are envious of the rich; not politicians.

[Klash]

TweetIn a late night meeting, legislators stripped a measure that would have restricted bonuses for AIG and other companies receiving federal bailouts. Now they act as if they have been blind sided.

Are you now pi$$ed at the government or is your anger subsiding. Why do people not hold government to the same standards they hold the private sector too.

[daved150]

Tweet

In a late night meeting, legislators stripped a measure that would have restricted bonuses for AIG and other companies receiving federal bailouts. Now they act as if they have been blind sided.

Are you now pi$$ed at the government or is your anger subsiding. Why do people not hold government to the same standards they hold the private sector too.

i agree, but alot of people go around with blinders on. others are so concerned with their own circumstances that, while it pisses them the fuk off, they dont have time or energy or mindset to do anything about it than bytch!!
i'm pissed....i was pissed yesturday, and theres a good chance i'll be pissed tomarrow....but what the fuk am I gonna do about it when i'm trying to save my american dream from becoming the next banks burden?

[Klash]

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i agree, but alot of people go around with blinders on. others are so concerned with their own circumstances that, while it pisses them the fuk off, they dont have time or energy or mindset to do anything about it than bytch!!
i'm pissed....i was pissed yesturday, and theres a good chance i'll be pissed tomarrow....but what the fuk am I gonna do about it when i'm trying to save my american dream from becoming the next banks burden?

Oh, I understand the feeling of hopelessness; the point I'm trying to make is people are ready to start a lynching when they perceive a company (referring to AIG) abusing public funds but when the government abuses public funds at a rate that makes the AIG company look frugal - it's acceptable.

[pigmeat]

Tweethere is my problem....BONUSES!!!!! To me and most other working Americans, BONUSES are a BONUS..something extra for doing an excellent job....something that is automatic is not a bonus. Bonuses are something you get for succeeding....something none of these guys did...they ran it into the ground and should be fired..not rewarded

[Klash]

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here is my problem....BONUSES!!!!! To me and most other working Americans, BONUSES are a BONUS..something extra for doing an excellent job....something that is automatic is not a bonus. Bonuses are something you get for succeeding....something none of these guys did...they ran it into the ground and should be fired..not rewarded

Liddy said today the bonuses were based on succeeding at a particular job and that was how the contracts were drawn up but once again. The American government had a hand in the failure of AIG, a hand in the bonuses, has blown more money than AIG will ever see and yet the public is more outraged at AIG - where is the death threats for the legistlators that have actually created this and are putting on a fake rage for the news cast.

[daved150]

Tweet

Liddy said today the bonuses were based on succeeding at a particular job and that was how the contracts were drawn up but once again. The American government had a hand in the failure of AIG, a hand in the bonuses, has blown more money than AIG will ever see and yet the public is more outraged at AIG - where is the death threats for the legistlators that have actually created this and are putting on a fake rage for the news cast.

thats my point. at the store i was at previously, i got a 500.00 "bonus" every month we sold over 40. 1 month, i hit 41 and LOST 8k for the month (unexpect loss due to a couple bad units and some high whilesale loss)...i said i'd pass on the 500, but my boss said no-way and made me take it. a deals a deal!!! thats the way it works. NO RE-NIGGING!!! so...depending on the structure, i have a hardtime just saying NO, they dont deserve it. if they were doing that bad of a job, they should've been fired before bonus time!

i know what your saying klash, and i agree...the government fuks up TRILLIONS....TRILLIONS!!!!!!..this is 167 million and peoplle are all twisted...go figure

[FUZO]

Tweetthis was the democratics fault for these bonuses bottom line. Bush might of been president but it was a democratic controlled congress that passed this legaslative bill that they will get there bonuses.obama said he was going to go through the bill line by line and get rif of this stuff,HE FUKIN LIED AGAIN.YOU LIBERALS OR DEMOCRATICS OR EVEN REPIUBLICANS THAT VOTED FOR HIM GOT SCREWED. You all beleived the change shit. Chris dodd or geifner-sp are all scum bags. 2010 we need to take back or seats and in 4 yrs that scum bag will be out of office. He has shown his inexperience on who he has picked and all of them quitting. He doesnt know shit about running a country.

[FUZO]

TweetOh and by the way they will get to keep there bonuses a contract is a legal binding document no matter what the democrats say or if they are going to subpeona names of who got them its there money now. Get over this bonus shi and worry more about how blojama racking up the deficit. this is a tiny partice compared to the deficit