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Power to the People- Unrelenting pressure force A I G's Liddy to tell Execs to give back that bonus! (1456 hits)

Even if your eyes glaze over from this article,know that we the people have put so much pressure on Washington that there is no way out. Today Moveon.org is busing folks to Wilton, Connecticut to march in front of AIG offices.

Please don't believe that lie that's been told forever? that lie is what's the use? they are going to do what they want to do--no they are not--if we don't recognize the power and responsibiility of living in a Democracy? then we shall lose the privileges.

WASHINGTON -- American International Group Inc., bowing to public outcry and harsh criticism from federal officials, has asked some of its employees to give back at least half of the controversial bonuses handed out in recent days.

'Outrage' Overflows on Capitol Hill AIG Bonus Controversy-AIG Chairman and Chief Executive Edward Liddy, appearing before a U.S. House subcommittee, said the company has asked employees at its financial-products division who received more than $100,000 to "step up" and return at least half the payments.

"We've heard the American people loudly and clearly these past few days," Mr. Liddy said, claiming that some employees have already volunteered to give up their entire bonus. He warned, however, that the request could backfire if the employees who received the retention bonuses decide to resign from the firm. "They will return it, but they will return it with their resignations," Mr. Liddy told the House panel.

Meanwhile, President Barack Obama said he will seek legal authority over the financial system that will give the federal government power to step into contract issues. (See related article.)

Rep. Paul Kanjorski, who chairs the House Subcommittee on Capital Markets, Insurance and Government Sponsored Enterprises that held Wednesday's hearing, said AIG management ignored warnings from him and other lawmakers not to make the payments because of the potential public outcry.

"Something is seriously out of whack, and AIG needs to fix it now," Rep. Kanjorski (D., Penn.) said.

Mr. Liddy, acknowledging the criticism in his testimony, said that the public's "patience is especially thin" and that the company is working to repay taxpayers "to the maximum extent possible."

Mr. Liddy said that the "cold realities of competition" for customers and employees played a role in the firm's decision to make the payments, which have spurred a public backlash given the roughly $170 billion the government has used to prop up the troubled insurer.

"Because of this, and because of certain legal obligations, AIG has recently made a set of compensation payments, some of which I find distasteful," Mr. Liddy said.

Describing the financial-products division, Mr. Liddy called it an "internal hedge fund" that exposed the company to extreme market risk. The result, he said, was that "mistakes were made at AIG on a scale few could have ever imagined possible."

"Those missteps have exacted a very high price, not only for AIG but for America's taxpayers, the federal government's finances and the economy as a whole," said Mr. Liddy, who took over AIG as part of the government's rescue of the firm in September.

Some lawmakers said Mr. Liddy shouldn't be the target of all the criticism. Rep. Spencer Bachus (R., Ala.), the top Republican on the House Financial Services Committee, said little could be done by the government except to allow AIG's new management to repair problems at the company and to recover as much taxpayer funds from the company as possible.

AIG Chairman and CEO Edward Liddy addressed members of the House of Financial Services Committee today to address questions about why bonuses were paid to executives. Video courtesy of Fox News.
More Video
Obama Argues for More Legal AuthorityHow Hedge Funds Siphoned AIG Bailout CashU.S. Government Presses AIG Over BonusesAnalysis: Why AIG Execs Are Getting Bonuses"You can vilify this new management if it makes you feel better, but resolving a company as large and complex as AIG is no easy task," Rep. Bachus said. "The government trying to get more involved than it is, is just going to be a sad experience."

Among those receiving blame for AIG's problems was the Office of Thrift Supervision, which shared partial oversight over the insurer after the company applied for and received a savings and loan charter. Acting Director Scott Polakoff said the OTS missed an opportunity to head off problems at AIG's financial-products division because it didn't expect the housing

GOP Rep. Bacchus from Alabama is so sorry to see his friend in the hot seat--he doesn't feel the new management should be blamed? the new management is part of the old network.
Posted By: Marta Fernandez
Thursday, March 19th 2009 at 8:53AM
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The "WARNING" from Liddy ( I keep thinking he is related to GordonJ. Liddy the ex-con in Nixon's Cabinet) that some executives will return the money with their resignations can only be met with a resounding so what!! lots of people are on the unemployment lines, stimulate the economy and throw them out in the street--believe me they have major back up--I cannot believe his thinking. This is what happens when you only crunch numbers and leave human beings out of the equation.
Thursday, March 19th 2009 at 9:01AM
Marta Fernandez
With people losing jobs left and right; with entire families being put out on the street because they lost their jobs and couldnít pay the mortgage, how dumbfoundingly tone-deaf must one be to assume that paying millions in bonuses to the very people responsible for crashing AIG and in large part crashing the economy would fly? Whatís worse, how can you justify rewarding people for doing this?

Liddyís excuses for paying these people donít fly. Had it not been for the bailout they wouldnít have jobs, and they would have walked away with nothing. Had AIG gone into bankruptcy, at some point DOJ would have been looking into fraud, and some of these bonus recipients would be on the business end of justice right now. But that would be more deserving than them walking away with millions in taxpayer dollars. They did nothing to deserve that money.

I guess they all werenít counting on people rising up to say enough. We need to keep up the calling and writing, and when we can, picketing.

Thursday, March 19th 2009 at 9:50AM
Right On!
Thursday, March 19th 2009 at 1:43PM
Marta Fernandez
Dude is making one dollar a year on the books. They have been stealing along time. sure give the bonus back We get with you on the flip my brother....
Thursday, March 19th 2009 at 3:48PM

Iím beginning to have second thoughts on Liddy. Heís looking more and more like a fall guy in all this. He took a public butt whupping for a lot of people the other day.

Last fall the Fed decided to let Lehman Bros fail, and saw the ripple effect of it on the economy. AIG was in an even worst position, so they realized they couldnít let it fail. They dumped the CEO who had run it up to that point, Hank Greenberg. They appointed Liddy as CEO to act as more or less a receiver of the company. So Liddy has only been there six months. (Iíve worked on consulting projects analyzing the business processes of much smaller chunks of large companies, and six months is not a lot of time for that, let alone getting your arms around a giant like AIG!) As Mozell pointed out, heís only getting $1 for his pay, so heís really doing a public service here. Granted, Liddy was there, as was Geithner, when Greenberg, Bush Treasury secretary Paulson and Greenberg worked out the details of the bailout, which was pre-TARP. They put in the provision that essentially guaranteed those bonuses and the appropriation for it was put to congress. Bush wanted it, the GOP backed it, and so it passed. There really was nothing Liddy could have done to stop it, and maintain that position.

When Obama got elected, he said many times that there will be strings attached to any monies any of these corporations received. He acknowledged the abuses of the past, and vowed it wouldnít happen again. Chris Dodd said the same thing, in support of Obama. Dodd took out the provision that guaranteed the money. But when the bill went into conference committee (thatís when members of the House and Senate get together to reconcile their two versions of the same bill before it goes to the president for signature) that provision was put back in.

When Dodd first attempted to explain this a few days ago, he did a poor job of it, and it looked like he might be lying about something. Dodd did a follow up where he was clearer, and said that someone in the administration asked him to take that provision out. He could have called names but didnít, and I think that was because he wanted to give the real culprit, Geithner, a chance to Ďfess up. Yesterday Geithner confessed in a tortured interview on CNN, that it was he who put this back in. He claims he did it because he didnít think they could legally challenge the bonuses because of the contracts. All this happened in February. So:

1. Why did Geithner say he did not know about the bonuses until a week ago?

2. When Geithner found out about them, he met with Liddy and took no action. Yet he waited 2 more days before he told Obama anything. Again, why?

3. Instead of letting days go by and have people think Dodd was a liar, then have this be a ďmysteryĒ as to how that provision got put back in, why didnít he step up then and say it was him? By letting this go on he prolonged the distraction.

The most Liddy could have done is what he did. He didnít negotiate those contracts, he didnít vote on the provisions of the bill. The most he could have done was resign in protest back in the fall when it became clear that Bush-Paulsen-Greenberg, and yes, Geithner wanted to guarantee those bonuses. But that would not have stopped them.

As I said before, Geithner needs to be taken to the woodshed. If he canít articulate and enforce the policies of the president, he needs to go.

Friday, March 20th 2009 at 9:25AM
He will be under the President's control --also Attorney General Cuomo (I like him) will be getting a list of all the corporate criminasl today!! Bank of America topping the list! In politics you protect your friends!!
Friday, March 20th 2009 at 12:08PM
Marta Fernandez
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