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Politics | 03/16/2009 9:00 am

Pelosi, Frank Fire Back at AIG

By The Staff at wowOwow.com
© Getty Images

AIG executives may be the most hated people in America today — or at least in Washington. Politicians are absolutely furious that the insurance giant, which received a government bailout, plans to pay its executives $165 million in bonuses.

House Financial Services Committee Chairman Barney Frank blasted the company this morning, and suggested to the "Today" show that it may be time for AIG, 80% of which is owned by the federal government, to start cleaning shop: "These people may have a right to their bonuses but they don’t have a right to their jobs forever." Frank went on to intimate that the government could claim that right: "These bonuses are going to people who screwed this thing up enormously … Since the federal government … now essentially owns that company, maybe it’s time to fire some people."

Sen. Russ Feingold also joined the chorus. He sent a letter to Treasury Secretary Timothy Geithner urging the administration to overturn the bonuses. Wrote Feingold:

As you know, the federal government has provided AIG with $170 billion in taxpayer money and currently owns 80% of the company … I share your outrage that a company which has been bailed out by the taxpayers for its mistakes would turn around and pay its executives such a staggering sum of money.

Feingold also said he and his allies will look into the legal options for blocking the bonuses. A number of other politicians have also filed critical letters, including Rep. Elijah Cummings and House Speaker Nancy Pelosi. Describing the bonuses as "unconscionable," Pelosi wrote, "I call upon the executives at AIG to right the wrong they have done to American taxpayers, who are footing the bill for the most expensive government rescue in history. They should renounce the bonuses and refuse the excessive retention pay they previously agreed to."

AIG, of course, insists the company’s contractually obligated to pay their employees — including $9.5 million to its top executives. Further, AIG says the extra dough helps them keep "the best and the brightest." Those are the same people who led the company to the brink of collapse.

51 Reader Comments (so far…) Sign In or Register to comment

Lila Kuh
YES, Barney, it IS time to fire some people at AIG.  It’s also time to put some US Treasury employees on the board, since we own 80% of the company — we obviously need better oversight here.
By Lila Kuh on 03/16/2009 9:16 am
f p
Agreed.
By f p on 03/16/2009 9:29 am
Diana T

The guys at AIG just don’t get it, do they…what’s it going to take?  I would love to see their heads roll all the way down Wall St., and I hope that Congress goes after them with everything they have.

By Diana T on 03/16/2009 9:31 am
f p
It’s not only the Dems that are questioning this—it’s an across the aisle sense of disbelief.  Even Old Mitch McConnell is flabbergasted.
By f p on 03/16/2009 9:34 am
Patty E
Most companies DO fire employees who fail to do the job properly….the idea is nothing unlikey nor unusual….it happens every day…why should  AIG be immune?  Quality Assurance is a staple at every other business…I have a QA guideline in my files, if they need one ….hahhaha…I would be more than happy to forward it, help them out regarding development of goals et al…. for FREE!  (maybe I should think over that free part—I am un-employed and could use the money)
By Patty E on 03/16/2009 9:38 am
C Hardy

It may just take an Act of Congress to get those people out of AIG.  If the Government owns 80%, find out how much it would be to fire them and let them out of their contracts, sure that amount won’t be as much as this bonus there getting…but if they didnt do the job they were hired to do, can’t they get fired without bonus or anything? 

Why are they being rewarded for a job NOT so well done? 

By C Hardy on 03/16/2009 9:40 am
Mary Quite-Contrary
Maybe this AIG waste would have been found/addressed if anyone had actually had the time to read TARP 1.0 before it was voted on. Remember…it had to be voted on and approved IMMEDIATELY or life on the planet as we know it would have collapsed. How many other AIGesque sweetheart deals were in that Bill? And what about all 1078 pages (also quickly presented and voted upon) of the Stimulus Package (1.0) that are just AIGlike bonanzas that lucky, lucky financial insiders are going to receive??? But hey, didyaknow that Levi wants to get back together with Bristol and the baby…he misses them already. I know this because “this” is breaking news (ABC is all over it).
By Mary Quite-Contrary on 03/16/2009 9:49 am
Lori F.

  Excellent comment Mary Quite, how is it possible for this Obama Administration to question the AIG bonuses given to its executives when the TARP money given to them by Congress had no stipulations attach to it?

We are talking about $165 million in bonuses! This Administration gave this company BILLIONS of dollars! President Obama when question about the "pork" in the stimulus bill said that this was a "tiny amount  less than 1% of the BILLIONS in the Stimulus Bill"!

But now this bunch is trying to take a mere $165 million from AIG for bonuses agreed apron by the Board.

Is not $165 million "tiny" compared to BILLIONS spend by this Obama administration?

Please spare me all this noise over this "tiny" little amount!

By Lori F. on 03/16/2009 1:51 pm
Patty E
oh Lori—I remember once you telling someone to check their facts—-and it was actually YOU that had your facts mixed up—-once again—-your facts are mixed up….but I understand—you are an anti-Obama gal, and you will do everything in your power, to ‘play on’ the minds of very smart people—-HOPING you can re-create history, in their thinking—-but alas…..sigh….the Tarp I was given out BEFORE the Obama Administration was sworn into office—-or did you have a convenient lapse of memory?!  hahaha  you must be over 27 years of age!!!!
By Patty E on 03/16/2009 3:08 pm
Libra Lady
Lori….I do believe both dems and repubs were in a hurry to pass this first bail out…McCain and obama both went to DC to support it….it passed immediately…..so here’s another try to blame President Bush….dems now want to say they weren’t involved…very laughable….just like all the other votes on going to Iraq….dems hands are just as dirty as the Repubs.
By Libra Lady on 03/16/2009 7:15 pm
Z ****
So……..are  you referring to the Tarp that had to be immediately voted on in September of 2008 — while Bush was pres………you’re right — I remember that clearly.
By Z **** on 03/16/2009 9:17 pm
S.J. Morgan
The Democratic majority Congress and the House approved the TARP…….Bush only signed it assuming they knew what they were signing! ( as with the last two bills..they didn’t) ….FIRE them all!
By S.J. Morgan on 03/17/2009 12:22 am
Z ****
Replay the tapes, Bush presented TARP the same way he presented the War on Iraq — had to be signed immediately, country was going down the tubes……."trust him" …………Bush assumed they knew what they were signing the same way the sub-prime lenders assumed borrowers knew what they were signing………in other words, Bush took advantage of the situation for the gain of his political friends….the American public be damned.  
By Z **** on 03/17/2009 9:01 am
f p

And as for inflated salaries: 

 Citigroup Inc (C.N) awarded Chief Executive Vikram Pandit $10.8 million of compensation in 2008, a year in which the bank required two government rescues totaling more than $45 billion.

 

About $7.7 million of the compensation was a sign-on bonus the bank gave Pandit in January 2008, according to a regulatory filing on Monday. Pandit also received a salary of nearly $1 million and stock options of $1.6 million.

By f p on 03/16/2009 9:55 am
Carol Patanjo
First it was the auto companies using their company jets to fly to the meetings to ask or get the bail out,  , now AIG gets bailed out and they give bonuses to their employees. I’m sure there’s some else I forgot.  Doesn’t the government have any control or guidelines before issuing the bail outs?  What am I missing?  Please educate me.  I’m just a taxpayer on a low fixed income. 
By Carol Patanjo on 03/16/2009 9:59 am