AIG executive resigns on NY Times op-ed page

[Damen]

Finally, something good came out of this.

news.yahoo.com/s/ap/20090325/ap_on_bi_ge/aig_resignation_letter

AIG executive resigns on NY Times op-ed page
By IEVA M. AUGSTUMS, AP Business Writer Ieva M. Augstums, Ap Business Writer Wed Mar 25, 12:22 pm ET

CHARLOTTE, N.C. – An American International Group Inc. executive who received a bonus worth more than $742,000 after taxes has resigned publicly — in an Op-Ed column in The New York Times.

Jake DeSantis, an executive vice president at AIG's Financial Products division, said Wednesday he's leaving the company and will donate his entire bonus to charity. The letter, addressed to AIG's CEO, Edward Liddy, criticized Liddy for, among other things, agreeing to the payments but then calling the bonuses "distateful" as he testified before disapproving members of Congress.

New York-based AIG has been criticized for awarding $165 million in bonuses to employees of the financial products division, a global unit at the root of AIG's downfall.

Since September, AIG has received a $182.5 billion federal bailout.

It makes me smile.

[skyfire]

It shouldn't.

The US government is the organization that allowed the bonuses to go through in the first place, and yet two of the same involved parties - Dodd and Geithner - were among the ones leading the charge against AIG. Dodd was the one who inserted the clause into the bailout allowing this to happen, and Geithner - as head of the NY Fed - was in a position to have both known about and stopped it well ahead of time yet did not do so.

I don't like AIG either, but they had both a contractual obligation and a legal right to hand out those bonuses. It's Congress who is being immoral and unethical about the whole thing, as they're basically manufacturing the controversy to shift the blame from themselves.

[m52nickerson]

No the US government did "let" the bonuses go through. The bonuses were written into the contracts of the executives as you stated. The only thing the US governement couls have done was not given the bailout money. Even if they would have tried to put sometype of clause in saying that the bailout funds could not go to bonuses the executive could have sued and got the money from some other funds in side AIG, and AIG would have inturn needed more bailout money.

Plus, what clause was inserted that allowed this to happen?

[dantesvirgil]

If people want to bitch that auto workers absolutely must break their labor contracts in order for their employers to receive bailout money, then the same should apply to the greedy bastards making millions of dollars in bonus money just because it was writen into their contracts. What's good for the little people is good for the more powerful ones.

[m52nickerson]

When you put it that way I have to agree with you DV.

[dantesvirgil]

Power to the people.

[skyfire]

Mar 26, 2009 8:45:58 GMT -5 m52nickerson said:

Plus, what clause was inserted that allowed this to happen?

This one here.

Back on the 18th, Sen. Chriss Dodd confessed that he'd inserted a loophole into the stimulus bill - at the insistence of others - that allowed AIG's contractually-binding bonuses to go through. This has ignited a firestorm back in Connecticut, such that Dodd's career is pretty well over.

[m52nickerson]

Thank you Sky. I had not seen this.

[dantesvirgil]

I doubt Dodd's career is "pretty much over". He's entrenched.

[BenderBRodriguez]

Dodd is "tenured" in Connecticut and only a Ted Stevens-like felony conviction will end his career.

[skyfire]

Mar 26, 2009 10:29:46 GMT -5 m52nickerson said:

Thank you Sky. I had not seen this.

Problem is, the rabbit hole goes deeper.

AIG filed paperwork with the Treasury and the New York Fed in regards to the bonuses they were obligated to pay out back in November.

Geithner was one of the top dogs with the NY Fed at the time, meaning that he, rightfully, should have known about the paperwork and its implications. If Geithner was opposed to the possibility that AIG would use bailout money to pay for employee bonuses, then he had several months to bring the matter in front of everyone else. Instead, it wasn't until earlier in the month that he started raising a fuss about it and when he did he completely failed to mention anything about the paperwork. Questions have also been raised as to whether or not anyone at the Treasury bothered to brief Geithner about the matter upon his taking over.

So Geithner also has some explaining to do; given that people are still furious with him over his tax issues (such that some pundits I saw briefly nicknamed him "Turbo-Tax" on the basis that the software program, had he used it, could have resolved matters) and there's also a belief in some circles that he's only been doing a half-assed job handling the economy, Geithner didn't need this scandal either. And he really didn't need that bit a day or so back where he was recorded making a statement to the affect that he agreed with China's calls for a one-world currency to replace the dollar; his attempt to recant and clarify his words only seemed like a PR move.

Ever since that revelation about AIG was made, I've seen people calling for Geithner to either resign or - if he doesn't - get fired by Obama. That Obama is choosing to stick beside him may come back to bite Obama in the butt given how quickly the presidency is burning through goodwill. I honestly don't see good things happening any time soon.

[skyfire]

Mar 26, 2009 10:40:39 GMT -5 dantesvirgil said:

I doubt Dodd's career is "pretty much over". He's entrenched.

What's sad is that back in '07 and '08 you had pundits pointing to Dodd and Edwards as being the two Democrats in the mix who most deserved to get the nomination; Obama was seen as too green and Hillary was regarded as damaged goods thanks to Bill.

Instead, Edwards ended up staring down a career-ending scandal, Dodd is looking at one right now, Obama is giving large parts of the nation heartburn, and no one knows quite what to make of Hillary.

[m52nickerson]

The only people still bringing up Dodd's tax issue are idiots.

If no one in Geithers office notified him of the paperwork that is his fault how? So he agreed with chine about a world currency, it would make thing a bit easier since it is clear there is a world economy.

As far as Obama burning through goodwill his approval rating is holding at 60% and his dis-approval rating is holding at 30%.
www.realclearpolitics.com/epolls/other/president_obama_job_approval-1044.html

Also how people see the direction of the country going is improving.
www.realclearpolitics.com/epolls/other/direction_of_country-902.html

As to is the approval rating of the congress which is almost alway dismal.
www.realclearpolitics.com/epolls/other/direction_of_country-902.html

So as much as the AIG incident was a fuckup, it does not spell the doom of the Obama administration.

[skyfire]

Mar 26, 2009 16:26:18 GMT -5 m52nickerson said:

If no one in Geithers office notified him of the paperwork that is his fault how?

Either way, he's caught in a damned-if-you do situation.

If he knew about it but didn't act, he's just as guilty as Dodd.

If he didn't know, but should have known due to his position, then this raises questions about his competencies as a leader. It also raises questions about the NY Fed itself and its competencies to handle everything it's supposed to.

So as much as the AIG incident was a fuckup, it does not spell the doom of the Obama administration.

It does, however, give the GOP an excuse to be partisan and stonewall Obama's other economic efforts on the basis of not trusting Geithner or Dodd. Obama's already seeing defections in the ranks due to the deficit (several Democrats are siding with the GOP on the issue of making cutbacks to the budget), and so this could hurt his ability to get future bills through.

Again, I don't see good things coming out of this.

[m52nickerson]

Mar 26, 2009 21:54:05 GMT -5 skyfire said:

Either way, he's caught in a damned-if-you do situation.

If he knew about it but didn't act, he's just as guilty as Dodd.

If he didn't know, but should have known due to his position, then this raises questions about his competencies as a leader. It also raises questions about the NY Fed itself and its competencies to handle everything it's supposed to.

Yes he should have known, his staff should have told him. If anything it points out a failure in the staff.

Questions about the NY Fed? Which he no longer runs?

So as much as the AIG incident was a fuckup, it does not spell the doom of the Obama administration.

It does, however, give the GOP an excuse to be partisan and stonewall Obama's other economic efforts on the basis of not trusting Geithner or Dodd. Obama's already seeing defections in the ranks due to the deficit (several Democrats are siding with the GOP on the issue of making cutbacks to the budget), and so this could hurt his ability to get future bills through.

Again, I don't see good things coming out of this.[/quote]

Well maybe until the GOP got played by Obama like a fiddle and unveiled there own budget, which calls to reduce the tax % on the wealthy from 35% to 25%, but does not indicated how it would make up for that shortfall.