Putting the ‘I’ in AIG Contractual Obligations
by Jeff Swenson, Art Editor
March 17, 2009
AIG Bailout Bonuses
AIG is letting us know that our bailout cash is apparently going to be used to pay bonuses. Democrats are up in arms trying to shift the attention away from themselves. What did they think was going to happen when they gave money to a company that was mismanaging its money to the point of going bust?
AIG’s excuse is that the bonuses are contractual. That makes sense if it is business as usual. However, when you receive bailout money, legal obligations should be renegotiated.
I blame this squarely on the government for thinking they had to bail all these companies out without making sure that the money was going to be put to good use. Where are the taxpayers’ contractual obligations?
Jeff,
You say, “AIG’s excuse is that the bonuses are contractual. That makes sense if it is business as usual…” I think the very critical point you fail to point out is not so much that is was business as usual, but that Chris Dodd included an amendment in legislation approving the bail-out money that *specifically* approved payment of bonuses…and then President Obama himself signed the legislation. AIG is acting purely on government orders.
The focus of the national discussion ought not be AIG and the executives at all, but instead ought to focus on the sheer hypocrisy of the Democrats calling foul when their own legislation is enacted as written. To the extent that AIG received and utilized the bailout money, they are innocent. (As to WHY they needed the bail-out, how the company came to fail, is another discussion for which they deserve much blame!)
The recently announced CBO estimate of a $1.8 Trillion deficit is the true generational theft we should be concerned with, not the red herring of bashing a company that was told to take money so they could continue operations, and then doing as told. Also, keep in mind that the $167 million in bonuses was less than 0.1% of the bail-out money they received and utilized as instructed by the Democratic legislation. Wanna here one that even more offensive? $30 billion of the bailout money was used to bail out foreign banks – THAT ought to really get your gall!