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.
By MICHAEL R. CRITTENDEN and PATRICK YOEST
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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