White House Seeks "Mechanisms" To Recoup AIG Bonuses

By: Kevin Hechtkopf
Topics: Economy

(AP)

As the outrage over $165M in recent bonuses paid to American International Group executives continues to grow this morning, CBS News White House correspondent Peter Maer reports that the administration is looking for ways to recoup at least some of the money.

An official tells CBS News that the administration continues to negotiate with the insurance giant to bring any payments "in line with our priorities."

"It is unacceptable for Wall Street firms receiving government assistance to hand out million dollar bonuses, while hard-working Americans bear the burden of this economic crisis. That is why Secretary Geithner has made it clear to AIG that their bonus structure for senior executives is inappropriate," the official said.

The official said the bonuses have "long been known about inside and outside AIG" but that the administration didn't want to accept them.

The White House now is seeking what are described as "mechanisms" to recover money spent on bonuses, the official said.

The White House is clearly concerned that public reaction the bonuses could affect the president's overall economic goals, reports Maer. But the company insists some of the bonuses are part of legally binding contracts signed before the government's AIG bailout.

Meanwhile, on NBC's "Today" show this morning, Democratic Rep. Barney Frank, chairman of the House Financial Services Committee, said the bonuses amounted to "rewarding incompetence."

"These people may have a right to their bonuses. They don't have a right to their jobs forever," Frank said. "Maybe it's time to fire some people."

Yesterday, White House National Economic Director Lawrence Summers called the bonuses "outrageous" on CBS' Face The Nation. Click here for more from the interview with Bob Schieffer.

Update 9:55 a.m. ET: A White House official confirms to CBS News that President Obama will speak out on the AIG bonuses during his event later this morning with small business owners. He is expected to voice anger over bonuses paid to the company that has received billions of federal bailout dollars. He could also elaborate on administration efforts to recoup some of the bonus money.

Kevin Hechtkopf
Kevin Hechtkopf is CBSNews.com's politics editor.
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by nursez March 16, 2009 3:33 PM EDT: Everyone wants to blame Bush, Clinton, Obama...no ONE person did this. The Senate, The House of Representatives, the law makers, the lobbyists, etc ALL had a hand in this. One person/political party didn't make this mess, and one person/political party can't clean it up. The people in power do need ot get some guarantees before just giving out our tax dollars to bail these failures out so their contracts for yearly bonuses are null and void because they are having to receive a bailout for their failures!! NOT OUR FAULT THEY SCREWED UP, AND WE SHOULDN'T HAVE TO PAY THEIR BONUSES. Lock up the crooks and/or make them give back the bonuses and bailout.; Reply to this comment


by billpl-2009 March 16, 2009 2:46 PM EDT: "Two Options:
1. Do not let any company grow too big to fail. Break them up before they reach that size.
2. Let them grow unchained but charge an insurance fee, just as the FDIC does. They then have the option of staying big or breaking up. " -- Posted by jimgggg-2009

We have plenty of rules and laws to do that kind of stuff...

trouble is, when everyone's making money...no one cares

...until it all falls apart; Reply to this comment


by DefendLiberty March 16, 2009 2:22 PM EDT: Yes, being completely in the pocket of Rush and Hannity, and watching only Fake News Network would lead you to believe that Obama should have turned the GOP DEPRESSION AROUND IN 50 DAYS.

However, you will never convince the parrots that their Rush/Hannity/Fox masters are ever wrong. Parroting is an instinctual behavior. First you take some facts, then you put them in a blender and take the fragmented parts out in random fashion. You then extract the "inconvenient" facts that do not match your fanatical agenda. Then you put the remaining half-facts together in whatever way will make your point, regardless that the newly arranged "factiness" have nothing to do with reality. Call it "parrotism", an affliction of the far right talking heads and their minions.

The GOP DEPRESSION will take years to recover from. large economies NEVER change course quickly. The course is set and it takes YEARS to change. THANK YOU GOP for your GOP DEPRESSION. Forget trying to lay the blame on Obama. Only the tin-hat far right demagogues hold onto that SOP.; Reply to this comment


by DefendLiberty March 16, 2009 1:48 PM EDT: It's truly laughable how the Bush/neocon/throwbacks want to blame Obama for the WRECK of the economy the GOP left us. When Bush took office after Clinton, they clamed for YEARS that every problem was a "leftover" from Clinton. Now that the GOP traitors have DESTROYED OUR ECONOMY and ENRICHED THEMSELVES AND THEIR RICH FRIENDS, they want to blame the guy who has spent only 50 days starting to clean up the GOP mess.

THE BUSH/GOP DEPRESSION we are in will not turn around in weeks or months. Like an aircraft carrier, it takes MILES to turn even after applying full rudder.

No, the BUSH DEPRESSION will last a while, and the ONLY way out will be NOT repeating the GOP policies of "TAX CUT WELFARE FOR THE RICH AND CORPORATIONS" brought to us by the GOP rump party.

Meanwhile, the Rush PARROTS and their apologists squawk and squawk trying to distract from their own culpability in this mess. Do they have their foil hats on too? Hard to tell behind the reinforced door of the insane asylum's padded room. They really start frothing at the mouth and babbling insanely when they are off their meds.; Reply to this comment


by jimgggg-2009 March 16, 2009 1:14 PM EDT: Too big to fail?
The US government has been essentially blackmailed by companies that have grown "too big to fail". If AIG fails it brings down so much of the world economy that billions of innocent people would be hurt. So we are a "free" insurer of last resort.

Two Options:
1. Do not let any company grow too big to fail. Break them up before they reach that size.
2. Let them grow unchained but charge an insurance fee, just as the FDIC does. They then have the option of staying big or breaking up.; Reply to this comment


by homespunlady March 16, 2009 1:12 PM EDT: This 165 MILLION that's BEEN PAID on Friday is ONLY A PARTIAL PAYMENT on a 400 MILLION BONUS agreement that's scheduled to be paid QUARTERLY...

Nobody's mentioning that it's IN ADDITION to an unknown amount in SALARIES and PERKS.

My guess - it's AT LEAST A HALF BILLION in TOTAL COMPENSATION to carry out this ECONOMIC HIT JOB on the US and World economies.; Reply to this comment


by jimgggg-2009 March 16, 2009 1:03 PM EDT: Facts:
All the money for AIG was approved by Congress and signed by Bush. Some of it was released by the Obama people, without their knowledge that some of it would be used for bonuses.

Opinions:
AIG's leadership just doesn't get it. Still - after two prior screwups. They are repeat "Duh" offenders. I am surprised they haven't gone out and bought corporate jets this week.

The whole concept of bonuses is to shae success and they had no success to share. AIG had the option of asking for a waiver of bonuses as a condition of futther employment. Perhaps the Obama folks will make them such an offer.

This is not an employee retention issue. Where would these employees go in today's economy? They are lucky to have jobs at all.; Reply to this comment


by credibility2 March 16, 2009 12:59 PM EDT: ErrorInUse - I just love presumptive fools like you who claim to know everything and anything about a post and its originator. I don't owe your ilk any explanation about what I'm outraged at. And for your puny little intellect's sake, I didn't vote for Bush 43 either time and I proudly and intelligently didn't vote for Obama this time. I'm an Independent and free thinker. And, one thing for sure, you and your ilk not also holding the Dems accountable for the current crisis is inexcusable and outrageous. Any fool who actually believes the current crisis was only due to the last eight years and Bush needs to accept the fact that the Dems for years have contributed greatly to the demise just as much as the Repubs, including issues involving more regulation, de-regulation, illegal aliens, welfare, the Iraq War, mortgages to the poor, etc. Our problems actually began in the 1960s when the flood gates were opened up from frenzied government giveaways to those who hadn't any interest in working or earning anything, which spilled over the the frenzy of businesses and the middle class taking advantage of any system, since the lower class was doing the same. Why should anyone have accountability or responsibility for what they do? Let's have government control everything. Outraged? You bet I am and I'm sick and tired of the bleeding hearts who want to feel all tingly while holding hands, forming a circle and singing a kumbaya melody because all they've every wanted to take from those at the top and the middle who are sick and tired of supporting those on the bottom who refuse to do anythng for themselves except take, take, take from the taxpayer. You mention a litany of Repubs you obviously detest and hold accountable for all of the recent ills. How about adding the names of Dodd, Frank, Pelosi, Ayers, Wright, Obama, Emmanuel, etc.? What's the matter kid, can't stomach that they're just as culpable as your preferred pinata characters? Bash them if you will, but not to bash the Dems is disingenuous and fraudulent.; Reply to this comment


by credibility2 March 16, 2009 12:49 PM EDT: Where's the outrage over the malfeasant Congress content with doing very little work each week, giving themselves regular pay increases, and getting a paycheck for essentially doing nothing substantive except blathering about how they're going to change and fix everything?; Reply to this comment


by ErrorInUse March 16, 2009 12:44 PM EDT: credibility2, sounds like you have a lot of outrage toward President Obama and the Democratic Congress trying to get us out of the mess that the Republicans dropped us into. Where is YOUR outrage at the phoney war that George Bush, Dick Cheney, Karl Rove and the sheepish republican followers got us into? It has cost us billions of dollars, thousands of American lives, hundreds of thousands of Iraqi lives and with Maliki's most recent edict, will continue to cost us lives. Where is YOUR outrage? Where is your outrage about the "turn a blind eye" policies of the Reagan administration toward illegal aliens? Where is your outrage at "trickle down" Reaganomics that never trickled down? Where is your outrage at the Bush tax cuts for the rich - remember, just because a business may pay what seems like a lot of money in taxes doesn't mean diddly squat if it only amounts to 1 or 2% of their GROSS income. Where is your outrage at all of the foregoing credibility?; Reply to this comment