Public Outrage Grows Over AIG Bonuses
By Mil Arcega
Washington
18 March 2009
AIG office building in New York, 17 Mar 2009
Outrage over insurance giant AIG＇s bonuses to its executives is growing. Despite suffering billions of dollars in losses requiring a massive government bailout, AIG says it is contractually obligated to pay millions of dollars in executive bonuses. The payouts are not sitting well in Congress or with the American public.
It＇s a public relations nightmare for the largest insurance firm in the world.
Some New Yorkers say the company has no one to blame but its own executives.
"Bonuses? These guys are lucky to have a job," on man said.
"My silent protest to AIG is that my dogs poop here," a woman added. "But I, unlike AIG, pick up with my little plastic bag and clean up my mess afterwards. So I am completely outraged."
President Obama blamed the company＇s problems on "recklessness and greed".
And with more than a $170 billion in government funds invested in AIG, the president has pledged to do everything possible to stop the payouts.
Pres. Obama, and Treasury Sec. Geithner meet with small business owners at the White House, 16 Mar 2009
"In the last six months, AIG has received substantial sums from the U.S. Treasury and I＇ve asked Secretary Geithner to use that leverage and pursue every single legal avenue to block these bonuses and make the American taxpayers whole," president Obama said.
But Republican leader John Boehner says the government should have known about the bonuses when it gave AIG $30 billion earlier this month.
"The president＇s spokesman said that they were confident that they knew how every dime was being spent at AIG," Boehner noted. "Clearly they didn＇t know what they were talking about."
But Democrats say there is enough blame to go around. Congressman Barney Frank says of the four AIG bailouts so far, three were approved by the Bush administration.
Rep. Barney Frank answers reporters＇ questions on Capitol Hill, 17 March 2009
"The Federal Reserve came to us in September and announced, did not ask or consult, announced, that it would be advancing $80 billion in loans to AIG," Frank noted.
Disgust over the AIG bonuses reached a fever pitch Monday when Republican Senator Charles Grassley was quoted, telling AIG executives to resign or commit suicide.
And late Tuesday, Senate majority leader Harry Reid issued an ultimatum to AIG - renegotiate the contracts or else.
"If they don＇t, Chairman Baucus [of the Senate Finance Committee] will propose legislation which will be in the next 24 hours to give this money back to taxpayers by subjecting the bonuses to severe tax penalties - more than 90 percent," Reid said.
Lawmakers are expected to get some answers Wednesday, when AIG＇s new CEO is scheduled to testify on Capitol Hill.
|
|
