President Obama to bailed-out AIG: I will pursue 'every single legal avenue to block

**min0 lee** · 03-17-2009, 07:42 AM

President Obama to bailed-out AIG: I will pursue 'every single legal avenue to block these bonuses'

BY HELEN KENNEDY
DAILY NEWS STAFF WRITER

Updated Thursday, April 16th 2009, 4:04 PM

Bonus-hungry AIG execs were bombarded from all sides Monday as President Obama vowed to grab back their "outrageous" payouts and state Attorney General Andrew Cuomo demanded to know who got what, and why.

AIG defied Cuomo's 4 p.m. deadline to cough up the list of bonuses - and he promptly issued subpoenas for the names.

"The whole concept of a performance bonus is oxymoronic when it comes to AIG," Cuomo said. "It's adding insult to injury. Enough is enough."

As popular wrath over the entire Wall Street collapse focused in on AIG, even the normally squabbling ladies on "The View" piled on in unanimous fury.

"You cannot bend us over this way," Whoopi Goldberg declared on the TV chatfest to audience applause.

In Washington, President Obama slammed the insurance giant - which taxpayers have bailed out four times to the tune of $170 billion - for promising millions in bonuses to execs in the same division that brought AIG to the brink of oblivion.

"This is a corporation that finds itself in financial distress due to recklessness and greed. Under these circumstances, it's hard to understand how derivative traders at AIG warranted any bonuses, much less $165 million in extra pay," Obama said.

"How do they justify this outrage to the taxpayers who are keeping the company afloat?" he demanded.

Obama told reporters he asked Treasury Secretary Timothy Geithner to "pursue every single legal avenue to block these bonuses."

Breaking off to cough, he said, only half-jokingly: "Excuse me, I'm choked up with anger here."

White House spokesman Robert Gibbs said the boondoggle "offends our values" and suggested the execs awaiting a bonus "should think long and hard about whether, given the performance of the company, this is either warranted or appropriate."

Most of the bonus checks are probably already cashed: Cuomo said AIG told him $165 million in checks, part of a bonus pool reportedly worth $450 million, were mailed out Friday.

AIG says it is legally obligated to pay out the money, designed to keep talent from jumping ship, because the contracts were signed before the bottom fell out.

Critics said the executives at AIG's Financial Products unit in London were clearly not too talented because their reckless big-money bets exposed the company to hundreds of billions in losses.

Ex-Labor Secretary Robert Reich said they'd have gotten zilch if the government had let AIG die.

"AIG's arguments are absurd on their face," Reich said on his blog. "Had AIG gone into Chapter 11 bankruptcy or been liquidated, as it would have without government aid, no bonuses would ever be paid; indeed, AIG's executives would have long ago been on the street."

Experts suggested various ways to claw back the bonus money.

"It is quite possible to abort this outrage," said William Black, a former bank regulator who teaches economics at the University of Missouri.

"The trustees need to split off the derivatives unit from the rest of the firm and separately incorporate it. If the recipients of the bonuses refuse to waive them, then the derivatives unit should at once be thrown into bankruptcy, terminating all obligations to pay them."

The White House suggested it could hold up an upcoming infusion of $30 billion to AIG until the bonuses are paid back.

"I don't see why these guys can order dinner in a restaurant, much less be getting these bonuses," said Obama economic adviser Austan Goolsbee on MSNBC.

Cuomo said some of the AIG contracts that require bonus payouts might be fraudulent if they were signed when the meltdown could be seen coming.

He demanded that AIG CEO Edward Liddy cough up a list of all executives at AIG Financial Products getting bonuses; a description of each individual's job and performance; copies of whatever contracts AIG says obligates it to make the payments, and a list of who negotiated the contracts.

"Let me see the contract and let me see when it was signed," Cuomo said. "Let's make sure they didn't sign these contracts when you knew things were going south in the company."

Shares of AIG shot up 66% Monday. The stock, which traded at nearly $50 less than a year ago, jumped from 50 cents to 83 cents.

hkennedy@nydailynews.com

**min0 lee** · 03-17-2009, 07:43 AM

Sen. Charles Grassley is so angry over AIG bonuses that he says the executives should resign or kill themselves.

In a comment aired this afternoon on WMT, an Iowa radio station, Grassley (R-Iowa) said: “The first thing that would make me feel a little bit better towards them if they’d follow the Japanese model and come before the American people and take that deep bow and say I’m sorry, and then either do one of two things — resign, or go commit suicide.”

The radio clip was also aired on WTOP, a news radio station in Washington.

In response to a POLITICO inquiry, Grassley spokeswoman Jill Gerber clarified Grassley’s comments, saying “clearly he was speaking rhetorically – he meant there’s no culture of shame and acceptance of responsibility for driving a company into the dirt in this country. If you asked him whether he really wants AIG executives to commit suicide, he’d say of course not.”

“Point being, U.S. corporate executives are unapologetic about running their companies adrift, accepting billions of tax dollars to help, and then spending those tax dollars on travel, huge bonuses, etc,” Gerber said.

Grassley’s statement was the most over the top among the many expressions of outrage Monday, as the White House and Congress struggle to figure out how to recoup $165 million in bonuses from AIG, which has received more than $170 billion in federal bailout funds.

“With millions of Americans out of work, staying up nights trying to figure out how to make this week’s paycheck last until the next, wondering how they’ll make the next mortgage payment or pay the overdue tuition bill, these executive bonuses are beyond outrageous,” Senate Majority Leader Harry Reid said Monday.

Senate Minority Leader Mitch McConnell joined the chorus, saying the bonuses were “appalling.”

Trashing AIG has become a no brainer for campaigners. Jim Tedisco, a candidate in the special election for New York’s 20th congressional district, says AIG “poster child for Wall Street greed” and wants a state investigation.

Rep. Phil Hare (D-Ill.) went for a play on words, saying: “Clearly, the ‘G’ in AIG stands for greed. It is outrageous that taxpayers are subsidizing bonuses as much as $6.5 million at a time when working families are struggling to make ends meet.”

Nobody else has suggested hara kiri for AIG executives, and Grassley’s spokeswoman tried to make clear the senator didn’t really mean it.

**busyLivin** · 03-17-2009, 01:22 PM

This is such a load of shit. Really only shows how little people pay attention on both sides of the aisle.

Everyone is mad because AIG gave bonuses totalling around 165 million to undeserving people.

How is this worse than our elected officials giving 170 BILLION (at AIG ALONE) of our money to undeserving people ?

This is the same congress complaining that these people don't deserve raises, yet they just voted against a measure to halt their own raises, despite these tough economic times that Dingy Harry is talking about.

**brogers** · 03-17-2009, 01:35 PM

Ridiculous populist bullcrap.

"here's a boatload of money!"

"Oh, you paid people with that money I gave you!"

<Feign Outrage>

If they hadn't given them money, or at least forced bankruptcy before, the contracts could have been renegotiated.

Obama is an idiot, and people who believe he and Geithner are seriously upset about it are also idiots.

**danzik17** · 03-17-2009, 06:11 PM

Are you retarded? Did you not see what the collapse of Lehman did to the worldwide economy? Do you not realize how big of a deal AIG is to stability?

The big fucking deal is that the money is to stabilize their bottom line so they don't run out of money and GO bankrupt. They aren't to spend this money on fucking yachts and vacations.

**Big Smoothy** · 03-17-2009, 06:48 PM

Originally Posted by danzik17

The big fucking deal is that the money is to stabilize their bottom line so they don't run out of money and GO bankrupt. They aren't to spend this money on fucking yachts and vacations.

AIG is at the heart of the entire mess - AIG created the Credit Default Swaps, and there is where a lot of this bailout money is going. Covering CDSs.

As far as vacations and yachts? They spend the bonuses on this before, and may or may not do it again. If they save it, they'll go back to their big estates and have no worries while working stiffs lose everything.

**min0 lee** · 03-17-2009, 08:46 PM

AIG pigs are getting death threats.

**Dale Mabry** · 03-18-2009, 03:19 AM

Originally Posted by brogers

Obama is an idiot, and people who believe he and Geithner are seriously upset about it are also idiots.

Oh that's right, Obama gave them the lion's share of their money back in 2008. Oh wait, that was Gdub and Geithner. I like how he is personally responsible for shit that happened before he was even in office.

**min0 lee** · 03-18-2009, 05:13 AM

Originally Posted by Big Smoothy

AIG is at the heart of the entire mess - AIG created the Credit Default Swaps, and there is where a lot of this bailout money is going. Covering CDSs.

As far as vacations and yachts? They spend the bonuses on this before, and may or may not do it again. If they save it, they'll go back to their big estates and have no worries while working stiffs lose everything.

They might get taxed heavily, I think the they may have the IRS tax them 100%.

**Dale Mabry** · 03-18-2009, 06:54 AM

Geithner: AIG must pay back bonus money - CNN.com

looks like they are getting it back, but I won't hold my breath.

**I Are Baboon** · 03-18-2009, 07:55 AM

Obama is going to make his NCAA bracket predictions on SportsCenter tonight. I'll watch it!

**soxmuscle** · 03-18-2009, 11:11 AM

Originally Posted by I Are Baboon

Obama is going to make his NCAA bracket predictions on SportsCenter tonight. I'll watch it!

Obama is awesome.

**brogers** · 03-19-2009, 08:08 AM

Originally Posted by I Are Baboon

Obama is going to make his NCAA bracket predictions on SportsCenter tonight. I'll watch it!

Duke Coach to Obama: Worry About the Economy, Not NCAA Picks - Presidential Politics | Political News - FOXNews.com

**brogers** · 03-20-2009, 10:13 AM

Hot Air » Blog Archive » Video: Congress, Geithner knew about bonuses on March 3rd

This administration is incompetent or lying. My vote: both.

**I Are Baboon** · 03-20-2009, 10:29 AM

Originally Posted by brogers

Duke Coach to Obama: Worry About the Economy, Not NCAA Picks - Presidential Politics | Political News - FOXNews.com

Gay.

**busyLivin** · 03-20-2009, 10:59 AM

Originally Posted by brogers

Hot Air » Blog Archive » Video: Congress, Geithner knew about bonuses on March 3rd

This administration is incompetent or lying. My vote: both.

Of course both. I'm just glad people are seeing through him & his approval rating has taken such a dive. That's the only reason he went on Leno last night.. because he can't boost his ratings doing his job, but flourishes as an American Idol. That backfired with another demonstration of his inability to go off a telemprompter.

Geithner better be fired or resign. Regardless, Republicans have a generic ballot advantage for the first time in years. Hopefully next year Obama's majorities will take such a hit that he will be a lame duck & unable to push through any more of his disastorous plans.

One question I have.. if the gov't can't handle AIG, how the fuck are they going to manage our health care?

**busyLivin** · 03-20-2009, 11:02 AM

Funny (or Sad?) to me how everyone calls Obama "elegant" and palin an idiot

**IronAddict** · 03-20-2009, 11:27 AM

Funny, how come the Credit Unions aren't asking for bail outs ?

**busyLivin** · 03-20-2009, 11:37 AM

Anyone hear that the thoughtful gift of DVD's Obama gave to the British PM were all region 1 DVD's?

**brogers** · 03-20-2009, 12:42 PM

Originally Posted by busyLivin

Funny (or Sad?) to me how everyone calls Obama "elegant" and palin an idiot

He's really elegant with his jabs at the mentally handicapped.

Wanna see something REALLY embarrassing for our gov't?

Corrine Brown (D, FL), embarrassing my state, my university and my country all at once!

**pyromaniac327** · 03-20-2009, 01:24 PM

Originally Posted by brogers

He's really elegant with his jabs at the mentally handicapped.

Wanna see something REALLY embarrassing for our gov't?

Corrine Brown (D, FL), embarrassing my state, my university and my country all at once!

Oh
My
Fucking
God.

I would respond with some kind of insult...but my IQ dropped a massive amount of points after listening to her speech.

I'm... ...I don't even know.
Holy shit.

**busyLivin** · 03-20-2009, 01:55 PM

Originally Posted by brogers

He's really elegant with his jabs at the mentally handicapped.

Wanna see something REALLY embarrassing for our gov't?

Corrine Brown (D, FL), embarrassing my state, my university and my country all at once!

Wow, that's pathetic.

**CORUM** · 03-20-2009, 02:02 PM

what happend to all the Obama supporters from a few months ago???

**busyLivin** · 03-20-2009, 02:10 PM

Originally Posted by CORUM

what happend to all the Obama supporters from a few months ago???

their heads are in the sand. liberals don't pay attention to the news, which is why Liberal talk radio is a failure as well as most news channels. They drink their kool-aid & defend democrats without a care for the truth. Their guy got elected, so they will not pay attention again to politics until he's up for re-election.

Fox/Conservative talk radio are huge successes for exactly the opposite reason.

**IronAddict** · 03-20-2009, 02:11 PM

Why ? Are you gonna try to discredit the man with Republican talking points?

Too funny!

**IronAddict** · 03-20-2009, 02:21 PM

liberal, liberal, liberal... over and over again, like it's a bad thing. Do you even realise how the word liberal got it's origin ?

We'll if not I'll tell you, cause I've got work to do. From the word, Liberty.

**busyLivin** · 03-20-2009, 02:22 PM

Originally Posted by IronAddict

liberal, liberal, liberal... over and over again, like it's a bad thing. Do you even realise how the word liberal got it's origin ?

We'll if not I'll tell you, cause I've got work to do. From the word, Liberty.

thanks for the lesson.

**NeilPearson** · 03-20-2009, 02:39 PM

Originally Posted by IronAddict

liberal, liberal, liberal... over and over again, like it's a bad thing. Do you even realise how the word liberal got it's origin ?

We'll if not I'll tell you, cause I've got work to do. From the word, Liberty.

<sarcasm on>

The word is derived from liberty? Well that changes everything. I am totally going to vote liberal in the future. After all, who doesn't like liberty? This is just about the best arguement I have ever heard for supporting the liberals.

<sarcasm off>

**IronAddict** · 03-20-2009, 02:58 PM

Originally Posted by NeilPearson

<sarcasm on>

The word is derived from liberty? Well that changes everything. I am totally going to vote liberal in the future. After all, who doesn't like liberty? This is just about the best arguement I have ever heard for supporting the liberals.

<sarcasm off>

Just the proper use of the word is fine.

**min0 lee** · 03-20-2009, 03:02 PM

Originally Posted by brogers

Duke Coach to Obama: Worry About the Economy, Not NCAA Picks - Presidential Politics | Political News - FOXNews.com

As long as he's doing his job I don't care if he's the 6th man on the Harlem Globetrotters. He does seem more active than Bush.
ones.

Originally Posted by brogers

Hot Air » Blog Archive » Video: Congress, Geithner knew about bonuses on March 3rd

This administration is incompetent or lying. My vote: both.

What politician isn't?

Originally Posted by busyLivin

Of course both. I'm just glad people are seeing through him & his approval rating has taken such a dive. That's the only reason he went on Leno last night.. because he can't boost his ratings doing his job, but flourishes as an American Idol. That backfired with another demonstration of his inability to go off a telemprompter.

Geithner better be fired or resign. Regardless, Republicans have a generic ballot advantage for the first time in years. Hopefully next year Obama's majorities will take such a hit that he will be a lame duck & unable to push through any more of his disastorous plans.

One question I have.. if the gov't can't handle AIG, how the fuck are they going to manage our health care?

Overexposure of a President, especially in trivial settings, breeds familiarity. And that kind of familiarity, especially in a time of crisis, can breed contempt.
The key word is "can." This President, gifted as he is, just might be a special case.
Politics is as much a contest of personalities as it is a contest of ideas. It's one of the reasons JFK beat Richard Nixon and why Bill Clinton often got the best of Newt Gingrich. It's quite possible that, the better Americans get to know and like him, the more clout Obama will gain.
No typical pol, he has built-in gravitas and lacks the rub-you-the-wrong-way tics that plague so many people in public life, like John Kerry, George Bush and Al Gore.
For now, anyway, people see him working hard. He's busy and proactive on substantive fronts, not only frivolous ones.

Originally Posted by busyLivin

Funny (or Sad?) to me how everyone calls Obama "elegant" and palin an idiot

Please, can't you find someone else.
The GOP found out she wasn't the one to knock out Obama and niether is Steele for that matter....maybe Rush.

Originally Posted by CORUM

what happend to all the Obama supporters from a few months ago???

There are more Republicans here than conservatives, there may be a few who hide their true party.

When I post something negative about Obama no one defends him but if it's good the CONS are there.

I don't think anyone jumped on Bush during his first year.....I know I didn't start till much later. You can look it up.
He sucked balls.

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