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March 18th, 2009
09:00 AM ET
Frank: Bonuses not deserved
Rep. Barney Frank says he does not think AIG executives deserved their bonuses.
AIG's Edward Liddy is facing a potential firing squad on Capitol Hill today. The CEO who's been at the helm of AIG for the past 6 months will answer questions about the bonus outrage.
Chairman of the House Financial Services Committee, Barney Frank, joined us live from Capitol Hill.
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Your coverage this morning on Liddy' testimony was appalling. I admire CNN news program (cnn press room or 360) when EACH TIME they bring up the name Liddy, they make sure to mention that he was appointed AFTER the facts, that he was retired and was asked to deal with this mess for a salary of $1.
You chose to go with the "circus" encouraging the idea that he is a criminal and, ohhhh maybe the most pathetic of all, showing his rear and finding it very funny.
We need to pull the plug from AIG. AIG clients, it's time to pull your business from AIG!!!!
I am a General Motors employee. I want to know what transportation Mr. Liddy and his staff used to get to D.C.? If our Reps. can grill the auto company CEO's on this subject, why should anyone else recieving federal funds be treated any different?
On CNN's American Morning, they had a lawyer answering the question about whether or not AIG should honor the contracts with those who received the bonuses. He said that if AIG doesn't honor those contracts, then who will want to do business with that company? Who will want to do business in a country that doesn't honor contracts?
Relate that question to the Auto Workers. In part, due to public outrage, the Auto Workers were forced to renegotiate their contracts. They were forced to renegotiate with a lot of misinformation about how much they really make. They were asked questions such as, "Don't the Auto Workers care about jobs, about the industry, or about the nation as a whole?"
Ask a similar question of those receiving the huge bonuses at AIG. "Don't you care about jobs, about integrity, or about the nation as a whole?"
How can we honestly expect the hourly employees of Detroit's auto makers to negotiate away their own pay packages for the survival of an industry yet we are afraid to have the same expectations of those at AIG? If it is just and right to expect the Auto Workers to renegotiate pay and pensions that were already agreed to, isn't it just and right to expect the wealthy AIG execs to do the same?
The AIG ordeal is a total disgrace to this country. These politicians are giving nothing but excuses and lies regarding the outrageous bonuses given to AIG. And who modified the report that was attached to the Stimulus package? According to Chris Dodd, he did not change any wording regarding the blocking of Bonuses for the Stimulus package. Acccording to Barney Frank, he did a lot of "dancing around" regarding questions on the Bonuses. According to the CEO Liddy, he gave his "sob story" to the hearing and said he didn't want to do it, but he had to. Really! According to another source on another news channel, these AIG employees came out with threatening remarks that if they didn't receive their Bonuses, they would "walk out" and allow AIG to crash! Did you ever hear of so many wild stories? Bottom line: Washington did not do their job and Geithner Sec-Treas was "asleep at the switch" – he should be fired!
Pelosi Speaker of House, could care less! And if these Bonuses are not blocked or taxed, once again, the tax-payers will get "taken to the cleaners"!
Barney needs to be removed from the Finance Committee. It was he, last year, 2008, who made the statement that Freddie and Fannie May were solvent - surprise, surprise. It's strange how these politicians have the gall to demand answers from a corporate CEO, when they refuse to be accountable for their own actions.
The White House and the banking committee are to blame that these bonuses went out ....they removed the legislation that Republican Snowe had in the Pork Job Stimulus....that's when the bill ballooned from 800 pages to 1200 pages. No one read it.....crisis....vote on it by Friday..the Democrat held legislature passed it .Pelosi in Italy Monday....Obama on vacation by Tuesday. Nothing like doing Jay Leno tonight.... such a Presidential thing to do.
Barney Frank's committee is a bunch of fools being led by an idiot. The US Congress is the real culprit for the crisis and all they can do is grandstand about bonuses that they 1) approved in law, and 2) don't understand. Libby testified thay had to pay the retention bonuses or face paying double under CT law. I wonder if the Committee would be satisfied if AIG simply paid the $128 million (a pathetically small amount) out of their own pocket? Meanwhile Liddy has asked all recipients to bive the bonuses back, or, in the case of the smaller bonuses, give at least 50% back.
Libby's testimony this morning made it pretty clear that the errors were made in the credit default swaps (CDF) business and most if not all of the bonuses went to retain people managing the $1.6+ trillion insurance portfolios. The $70 billion in CDFs have been wound down; they are out of that business. AIG now owes the taxpayers $85 billion which Libby feels sure he can pay back from the insurance business barring an international financial meltdown.
As for who was the beneficiary of the CDF payments, it makes absolutely no difference if they were US companies or giant European banks. AIG was doing business with them and a default is a default – AIG would have been bankrupted if they had not made good on those contracts.
No doubt the next issue will be how they "made good on CDFs." Should they have wound down the business or simply put up more collateral? I would rather trust Libby's judgement than Barney Frank's.
What a joke. Franks is the reason these bonuses were able to be handed out in the first place now he wants to reside over them and question why they handed them out. Because sir...YOU ALLOWED THEM TO.
Who put this guy in office? People that voted for him should be ashamed.
For Mr. Frank...if you want the list of names of those who received the bonuses...then agree to any and all liability if anything happens to these family from the HATE and outrage you helped fuel...Mr. Frank, you are an IDIOT!!! I don't agree with Mr. Liddy in terms of these bonuses, however, I do admire the man for not wanting to put these families in harms way, which the government seems to not be concerned with. These families with children do not have the government security protection as Mr.Frank...which is paid by MY tax money!
As much as I can appreciate the "show" everyone is putting on right now, I can't help to think that after the hearing, AIG executives and the house and senate will be behind closed doors high fiving the Oscar award they've just earned. Had the economy NOT impacted the wealthy would the senate be up in arms? This is all a show...Action will turn me into a believer, otherwise the entire hearing is a bunch of HOT AIR!
While watching the AIG CEO Liddy hearing today, he stated that part of the negotiated retention bonus contract stipulated "if they did a good job".
Now I'm not an attorney, but I'd have to say–case closed.
I think the AIG executives who received bonuses should live in an EDAR for a year and see how they like it (http://www.edar.org). It is ridiculous that there are families struggling to make ends meet, buy groceries, pay electric bills, or send their children to college while executives, who drove a company into the ground to the point where a government bailout was needed, receive bonuses for their "work." The immorality of receiving and accepting taxpayer money and using it for personal gain should be enough to demand prison sentences for those executives.
For those who believe this is all exclusively on the shoulders of AIG, I ask you to refer to comments made by Mr. Liddy about communications with the Federal government. . . the business AIG is in is one that is extremely regulated by the Fed.
AIG was in direct communication with the Federal Reserve Board over these bonuses, among other issues. So that should make you all pause in your pursuit of the "big, bad business" and how it is spending the blank check given it by our gloriously stupid governmental leaders, and instead focus on just how broken our government truly is!
This isn't about greedy CEOs, but instead about a lack of oversight by the very elected officials who sit in committee today trashing the AIG leadership. If they had been doing their jobs all along, we would not be here today. . . and this problem goes back decades, not 8 years!
Here's a lot of chutzpah from Barney Frank. When things were going well in years past, Frank (and Chris Dodd and Barack Obama) have received tons of campaign contributions from AIG. I guess that was OK. Now Mr. Populist has decided that the government (the government!!) knows better how to run the company.
A tempest in a teapot cynically designed by our so-called leaders to distract us from their role in this mess, and from the stratospheric budget that they want to pass to "fix" it.
Watch your back, America. Anti-corporate, anti-wealth populism is, well, popular right now, but sooner or later, we'll run out of rich people to chew up. Then the cannon will be turned on all the rest of us.
The DNA of our current crop of politicians is programmed only to tax, spend, and get re-elected at any cost.
I think Barney Frank is 100% right. It's easy to be cynical and shout "throw the bums out", but Frank has been among the best voices during this entire financial episode. He's clearly got the public interest at heart and his hardly enriching himself on a congressman's salary.
How about the next time all companys who have taken bailout monies and paid bonuses be subtracted from the next bailout.Do something for the people who's money you have giving them.We need someone to look out for main street instead of business failures of there own doing. We are all looking for our leaders to lead!!!! What I really wanted to say could not be printed.
Judith Morneau
frank and all his conrads in the congress are on the take with these companies the company pays them with "contrabutions" and they turn thier heads now that they have been caught with their hand in the cookie jar the politions act like the rats they are and turn on the ceos. I say the ceos need to give back the money when the politictions do
Yes there is outrage... as there should be... over these bonuses. A company in this much trouble should be able to break these kind of contracts and the legal system support that.
What is bothering me the most on this discussion is that Rep. Frank repeatly has said "we own this company". Maybe I am wrong here, but this is more a loan. The government gave money to shore up a company that was important to the economy. However, we did not "take it over" and nationalize it as Chavez has been doing. The later has never felt right. A government taking over a companies assets.
The CEOs of all these companies that are the bailout list are the problem at the core... they let all this happen... but let's not let something more traumatic happen to America about allowing government officials to say "We own this company" and "by defacto" it is a nationalized company. I don't believe that was the spirit of the bailouts and I hate to think what other strong arm tactics we may see in the future.
Let the companies fail.. that is what our economy was setup to allow. The bailouts were a worthy attempt... but please no more.
Barney the dinasaur is quick to come to our rescue on these undeserved bonuses. What litmus test is he using? Certainly not the one he used for his pal Franklin Raines as he was secreting away much larger amounts at the end of his tenure at Fannie Mae. There wasn't a single lisp of disaproval from this eagle eyed watchdog of public money.
Taxpayers are angry and disgusted to hear what those extremely and shameless AIG CEOs did. At the same time, taxpayers have big fear for what happened. Why our government is always one step behind those greedy, shameless and immoral CEOs? All these news make me sick!!! If government had set clear rules before sent AIG a check of taxpayers’ money, it could have been prevented. Today we would not have to pay the extra money for this hearing! White House guy, work smarter is better than work harder! Government should be one step ahead of the greedy CEOs, not one step behind CEOs. If this was the case, we would not end in this economic crisis now!!!
All these CEOs should go to the prison NOW!!!
Barney Frank should be cell mates with Madoff. Why don't you main stream media people tell the Barney Frank Story ?.
Let's face it Franks and his buddy's in the Congress are responsible for this mess by doling out the first "stimulus" package without any proper guidelines! let's get tough on these crooks!
AIG bonuses are an outrage. Bonuses are given for good performances, not bad. AIG must not go through with this. Plain and simple.
Regards,
Fred
I said senator, I mean representative
and Frank does not deserve the money we pay him as a senator. He is shoulder deep in the cause of this mess yet he shrugs off all blame and liability and most people let him get away with it. That is shameful!