March 22, 2009 11:53 AM

Frank: Retention Bonuses Are Extortion

By
Michelle Levi
Topics
In The News
(CBS)
Congressman Barney Frank (D-Mass.) told CBS News' Harry Smith on Face The Nation Sunday that the executive branch ought to use its leverage as a majority shareholder in AIG to sue the company for its wrongful use of retention bonuses.

Retention bonuses are to a great extent extortion, Frank argued. "I think there was an element, frankly, with some — not all of them — of almost extortion, where they said, 'We know what you need to know and we will quit if you don't bribe us,'" Frank said.

He argued that there is a large pool of very talented people who have lost their jobs in the financial crisis and that AIG could replace the bonus recipients (some of whom are responsible for creating the firm's now-toxic assets) rather than bribe them with retention bonuses.

Frank said he did not agree at all with Chairman of Bank of America Kenneth Lewis' assertion that the proposed taxation of bonuses for employees of companies receiving U.S. government bailout funds could "have the potential to damage the ability of the government to engineer a financial recovery."

The congressman defended Treasury Secretary Timothy Geithner saying that he inherited an economic fiasco.

"I know some of my Republican colleagues believe in creationism in which the world started 4,004 years ago. But I don't think any of them want us to believe that it started on January 20, 2009," Frank joked, arguing that the initial loans to AIG (totaling more than $173 billion) came from the Bush administration "without any Congressional input."


More from Face The Nation (3.22.09):
  • Grassley Continues Assault On AIG And Geithner
  • Goolsbee To AIG Execs: Give The Money Back
  • Discussion of economy with Jackie Calmes of The New York Times and Slate Magazine's John Dickerson

  • Read the full transcript> (pdf file)

    To watch video of Barney Frank and Charles Grassley on Face The Nation click below.


    • Add a Comment See all 75 Comments
    by agrneydgrl March 24, 2009 2:26 AM EDT
    That's what they get for not reading the bill before they signed it. If they did they would have seen it coming. Also, just becasue Bush gave them money without provisions doesn't mean Nobama should have given them money. To wrongs sitll, after all of these years, don't make a right.
    Reply to this comment
    by lsnhawtsauce March 24, 2009 2:18 AM EDT
    and to Grumpa ,,'whatever',,,,,,,,,we created this crap?????,haha,,I do have to admit Liberals are good for 1 thing at least!,,A HUGE LAUGH!!!,,i GUESS BUSH was the one that just borrowed nearly 2 TRILLION BUCKS 'and may i say 'WITHOUT EVEN READING IT",,'that' very intelligent' for sure!,,do all Liberals sign contracts without reading them first????/,,just wondering,,,because you don't seem to care that he and his crooks did it!,,
    You name me 1 time in history there has not been a DEFECIT',,in at least the last 16 yrs,,and may i remind you that a LIBERAL was 'yes' in office before Bush ever got in here?????And thanks to that precious Liberal our jobs went Overseas!,,yep,,sounds like your right up in there with their intelligence!
    Reply to this comment
    by lsnhawtsauce March 24, 2009 2:13 AM EDT
    Here we go again 'blaming' Bush,,of course what can you expect from a 'narrow' minded Liberal?????????
    I hate to break the news to ya ,,but OBAMA is the ones that keeps betting the TRILLION dollar loans for these 'so called' bailouts' which are nothing more than 'extortion' money!,,so hate to burst your liberal bubbles but your time for blaming 'everything on 'Bush is over ,,,'which just makes me soooooo sad,,how who ya gonna blame since Bush is out of the picture??????,,How NARROW minded can someone be,,it TRULY AMAZES ME,,the ignorance of still not willing to put the BLAME where it BELONGS!!,,And it ain't the CONSERVATIVES BECAUSE YOU PRECIOUS LIBERALS ARE THE ONES PUSHING ALL THIS CRAP THRU and believe me dear heart,,it's not just CONSERVATIVE MONEY that will be paying all this EXTORTION money back,,it's LIBERAL MONEY TOO!!!,,so have fun working JUST TO PAY TAXES BECAUSE OF YOUR 'MR WONDERFUL' THAT YOU VOTED IN,,IT'S YOUR OWN FAULT!
    Reply to this comment
    by olyboy March 23, 2009 11:29 PM EDT
    I'm not sure what this guy is talking about. He can't even tell the difference between equal rights and special rights. Every man and woman in America has the right to marry someone of the opposite sex, whether gay or straight. That is equality. Have the right to marry someone of the same sex is not an equal rights issue.
    Reply to this comment
    by karenbe111 March 23, 2009 1:48 PM EDT
    Tell it like it is Barney! This debacle does lie at the feet of the Republicans as they enabled this extortion and participated in their own in the form of no-bid Pentagon contracts!
    Reply to this comment
    by actornaught March 23, 2009 1:24 PM EDT
    ...found 8 Obama bumper stickers on our employees' cars and have decided these folks will be the first to be laid off....
    Posted by alien_view at 9:15 AM : Mar 23, 2009

    Sounds like a felony, hope you get caught, especially for posting it here. Web anonymity is a myth.

    More than likely, you're lying.
    Reply to this comment
    by alien_view March 23, 2009 12:15 PM EDT
    Here you go Frank.

    As the CFO of this business that employs 140 people, I have resigned myself to the fact that Barrack Obama will be our next President, and that our taxes and government fees will increase in a BIG way. To compensate for these increases, I figure that the Clients will have to see an increase in our fees to them of about 8%, but since we cannot increase our fees right now due to the dismal state of our economy, we will have to lay off six of our employees instead. This has really been eating at me for
    awhile, as we believe we are family here and I didn't know how to choose who will have to go.
    So, this is what I did. I strolled thru our parking lot and found 8 Obama bumper stickers on our employees' cars and have decided these folks will be the first to be laid off. I can't think of a more fair way to approach this problem.

    These folks wanted change; I gave it to them.
    Reply to this comment
    by alien_view March 23, 2009 12:11 PM EDT
    Frank, you need to hit the road. You are a waste of tax payer dollars. And who says your worth an 8 percent raise everytime you guys decide to give yourselves a raise. Your a nut job, quit. You know nothing about business.
    Reply to this comment
    by hankvreeland March 23, 2009 11:15 AM EDT
    Mr. Frank,
    Since you feel that the retention bonuses are extortion it puzzles me as to why you voted to approve them in the first place. I just wish there was some way that we taxpayers could take back ninety per cent of your pay and the pay of your colleges on both sides of the aisle. You have failed us again.
    Reply to this comment
    by impeachbhb March 23, 2009 10:36 AM EDT
    Way to go Barney!!!!

    Keep diverting attention away from yourself and all of the Democrats and Republicans who pushed for this sub prime mortgage mess.

    You and all of the others should immediately resign and be placed in prison with George B and Bill C who also contributed to this mess.

    We should send Barney to a female prison. Putting him in a male institution would not be punishment.
    Reply to this comment
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