Outrage and anger are the watchwords in Washington these days, and they’re directed at one company: AIG. That troubled financial firm has already received $173 billion in bailout money to keep it afloat. Now it is handing out $165 million in bonuses to some of the very people whose incompetence led to the worldwide financial crises.
The response has been swift and harsh.
“It’s hard to understand how derivative traders at AIG warranted any bonuses, much less 165 million dollars in extra pay,” the President said on Monday. “I mean, how do they justify this outrage to the taxpayers who are keeping the company afloat?”
From Capitol Hill came this from Rep. Barney Frank (D-MA): “These bonuses are going to people who screwed this up enormously.” His colleague, Rep. Carolyn Maloney (D-NY), told CNN that AIG employees “don’t deserve a bonus. They’re lucky to have a job.”
And from Main Street the reaction was just as harsh. One person told CNN: “It makes me feel disgusted.” Others called it “outrageous,” “upsetting”, and “greedy.” And another suggested that if you’re a “CEO of a company like that, you shouldn’t be able to drive a limo. You should ride...on the subway like everybody else.”
AIG’s chairman and CEO Edward Liddy, who was just appointed in September, did not take a bonus and notes that many AIG executives have agreed to work for just a token $1 salary in 2009. But he says that canceling the bonuses would have “serious legal, as well as business consequences for not paying.” Some
believe the government is in effect a hostage to AIG. It can’t let it fail because scores of major companies that depend on it would fail. And it can’t take away bonuses because these employees have contracts that legally guarantee them. Some believe the government could be sued if they tried to take away the bonuses. Others suggest that without bonuses many talented people would not work for AIG.
New York’s Attorney General Andrew Cuomo is not buying any of that. He wants a list of all AIG employees who got bonuses. And Cuomo wants to know if “any of the individuals receiving such payments were involved in the conduct that led to AIG’s demise.”