Motley Moose – Archive

First they take our money and then they screw us.

From the NY Times

A.I.G. Planning $165 Million in Bonuses After Huge Bailout

WASHINGTON – The American International Group, which has received more than $170 billion in taxpayer bailout money from the Treasury and Federal Reserve, plans to pay about $165 million in bonuses by Sunday to executives in the same business unit that brought the company to the brink of collapse last year.

SAY WHAT?

Word of the bonuses last week stirred such deep consternation inside the Obama administration that Treasury Secretary Timothy F. Geithner told the firm they were unacceptable and demanded they be renegotiated, a senior administration official said. But the bonuses will go forward because lawyers said the firm was contractually obligated to pay them.

Damn straight they are unacceptable.

A.I.G., nearly 80 percent of which is now owned by the government, defended its bonuses, arguing that they were promised last year before the crisis and cannot be legally canceled. In a letter to Mr. Geithner, Edward M. Liddy, the government-appointed chairman of A.I.G., said at least some bonuses were needed to keep the most skilled executives.

Which employees? The ones that got A.I.G. in trouble in the first place?

“We cannot attract and retain the best and the brightest talent to lead and staff the A.I.G. businesses – which are now being operated principally on behalf of American taxpayers – if employees believe their compensation is subject to continued and arbitrary adjustment by the U.S. Treasury,” he wrote Mr. Geithner on Saturday.

Best and Brightest??? What kind of fantasy world do you people live in?

The bonuses will be paid to executives at A.I.G.’s financial products division, the unit that wrote trillions of dollars’ worth of credit-default swaps that protected investors from defaults on bonds backed in many cases by subprime mortgages.

The bonus plan covers 400 employees, and the bonuses range from as little as $1,000 to as much as $6.5 million. Seven executives at the financial products unit were entitled to receive more than $3 million in bonuses.

Financial products division. The very people that got us in this mess are the ones being rewarded.  The other parts of the company had to accept reduced bonuses, but these idiots must be given their full bonuses?

The administration official said the Treasury Department did its own legal analysis and concluded that those contracts could not be broken. The official noted that even a provision recently pushed through Congress by Senator Christopher J. Dodd, a Connecticut Democrat, had an exemption for such bonus agreements already in place.

But the official said the administration will force A.I.G. to eventually repay the cost of the bonuses to the taxpayers as part of the agreement with the firm, which is being restructured.

Repay the taxpayers? Yeah, right. And Angelina is going to call to ask me to be her escort for the Oscars next year.

The financial products unit is now being painstakingly wound down.

So why do they need to retain the “best and brightest”?

I’m beginning to think I should open a guillotine sharpening business.