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