N.Y. AG Wants Answers On AIG Bonuses

(CBS/AP)  New York state's attorney general joined the growing list of those angered by news of American International Group's bonuses, and wants to have details on his desk this afternoon about who is getting it rewarded.

Attorney General Andrew Cuomo says his office will investigate whether recipients of the payments were involved in the insurance giant's decline and whether the payments are fraudulent under state law.

In a letter to CEO Edward Liddy, Cuomo said he's been investigating AIG compensation arrangements since last fall and would issue subpoenas at 4 p.m. EST Monday if he didn't get the names of employees scheduled for bonuses plus information about their work and contracts.

"Covering up the details of these payments breeds further cynicism and distrust on our already shaken financial system," he wrote.

"Taxpayers of this country are now supporting AIG, and they deserve at the very least to know how their money is being spent. And we owe it to the taxpayers to take every possible action to stop unwarranted bonus payments to those who caused the AIG meltdown in the first place."

Earlier Monday, President Barack Obama said he's asked Treasury Secretary Tim Geithner to pursue "every single legal avenue" to block the payouts.

"Under these circumstances, it's hard to understand how derivative traders at AIG warranted any bonuses, much less $165 million in extra pay," the president said. "How do they justify this outrage to the taxpayers who are keeping the company afloat?"

The Obama administration is looking for ways to recoup at least some of the money reports CBS News correspondent Peter Maer.

The White House continues to negotiate with AIG to bring any payments in line with the government's priorities, an administration official told CBS News.

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

"This isn't just a matter of dollars and cents. It's about our fundamental values," Mr. Obama said at the beginning of a speech at the White House on lending to small business owners.

Maer reports that the White House is seeking what are described as "mechanisms" to recover money spent on bonuses, but the company insists some of the bonuses are part of legally binding contracts signed before the government's bailout.

The administration is concerned that public reaction to the bonuses could affect the president's overall economic agenda, reports Maer.

"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," the official told CBS News.

Meanwhile, AIG disclosed Sunday that it used more than $90 billion in federal aid to pay out foreign and domestic banks, some of whom had received their own multibillion-dollar U.S. government bailouts.

Some of the biggest recipients of the AIG money were Goldman Sachs at $12.9 billion, and three European banks - France's Societe Generale at $11.9 billion, Germany's Deutsche Bank at $11.8 billion, and Britain's Barclays PLC at $8.5 billion. Merrill Lynch, which also is undergoing federal scrutiny of its bonus plans, received $6.8 billion as of Dec. 31.

Lawrence Summers, Director of the White House National Economic Council, said on CBS' Face The Nation on Sunday that the AIG bonuses were "outrageous… The whole situation at AIG is outrageous. What taxpayers are being forced to do is outrageous."

The company, now about 80 percent owned by U.S. taxpayers, has received roughly $170 billion from the government, which feared that its collapse could cause widespread damage to banks and consumers around the globe.

In an exclusive interview aired Sunday on 60 Minutes, Federal Reserve Chairman Ben Bernanke spoke with unusual candor of the frustration he felt in bailing out AIG.

"Of all the events and all of the things we've done in the last 18 months, the single one that makes me the angriest, that gives me the most angst, is the intervention with AIG," Bernanke told 60 Minutes correspondent Scott Pelley.

"Here was a company that made all kinds of unconscionable bets. Then, when those bets went wrong, we had a situation where the failure of that company would have brought down the financial system," Bernanke said.

"It makes me angry. I slammed the phone more than a few times on discussing AIG. I understand why the American people are angry. It's absolutely unfair that taxpayer dollars are going to prop up a company that made these terrible bets, that was operating out of the sight of regulators, but which we have no choice but to stabilize, or else risk enormous impact, not just in the financial system, but on the whole U.S. economy," he told Pelley.

The $90 billion chunk of the bailout money went to banks to cover AIG's losses on complex mortgage investments, as well as for collateral needed for other transactions.

Other banks receiving between $1 billion and $3 billion from AIG's securities lending unit include Citigroup Inc., Switzerland's UBS AG and Morgan Stanley.

Municipalities in certain states, including California, Virginia and Hawaii, received a total of $12.1 billion under guaranteed investment agreements.

More AIG Related Coverage:

Poll: Frustration Growing Over Bailouts

Can AIG Get The Bonus Money Back?

Are We Taxpayers - Or Suckers?

Will AIG Flap Lead To Obama Backlash?

Obama Rips AIG Bonuses

White House Seeks "Mechanisms" To Recoup AIG Bonuses

[____One_American___]

While the Democrats pretend to be outraged by the AIG bonuses - we find that the Democrat Chris Dodd was responsible for AIG bonuses protected under a very recent law that the Democrats just passed:

******
Senator Chris Dodd (D-Conn.) on Monday night floated the idea of taxing American International Group (AIG: 0.95, 0.1699, 21.78%) bonus recipients so the government could recoup some or all of the $450 million the company is paying to employees in its financial products unit. Within hours, the idea spread to both houses of Congress, with lawmakers proposing an AIG bonus tax.

The move represents somewhat of an about-face for the senator.

While the Senate was constructing the $787 billion stimulus last month, Dodd added an executive-compensation restriction to the bill. That amendment provides an "exception for contractually obligated bonuses agreed on before Feb. 11, 2009" -- which exempts the very AIG bonuses Dodd and others are now seeking to tax.

The amendment made it into the final version of the bill, and is law.

Separately, Sen. Dodd was AIG's largest single recipient of campaign donations during the 2008 election cycle with $103,100, according to opensecrets.org.

A spokesperson for Senator Dodd said the senator "was completely unaware of these AIG bonuses until he learned of them in the past few days; to suggest that the bonuses affecting AIG had any effect on Senator Dodd's action is categorically false."

One of AIG Financial Products' largest offices is based in Connecticut.
*****

Do you have any doubts now about just how slimy the Obama administration and the Democrats are?

[aziridine]

The bonuses will most likely remain in force. AIG folks were big contributors to Obama, he owes them. It's sad to see our President bought and paid for, beholden to financial interests, but that's what just over half of America wanted. Obama is a lawyer, first and foremost. A member of the most corrupt profession in the world.

Madoff was big contributor to Democrats, as well. As a result, there will be no recovery of assets and Bernie will never go to anything but a country club. Remember you heard it ere, first!

[billmorris01]

why is Cuomo involved in this? i don't think NYS should have to police national/international companies for the country. this is a job for Holder. Cuomo is just grandstanding in the hopes of getting elected to a higher office, perhaps becoming governer. lets cut the budget for the NYS AG's office to the bone that should save us all a few dollars.

[optimystic]

This is a tough issue. We think of AIG as this giant evil empire (for good reason), but most people working there were/are not decision makers. They were/are employees. Some of them were paid using a calculated bonus as part of compensation. It was agreed to up front. So in a lot of cases, not giving bonuses would be tantamount to not making payroll. Discretionary bonuses for execs wouold be another matter entirely, but most people seem to think that is what this is.

[Rickp400]

it is not just incompetent folks but corporate executive schemes
they are taking a big millions dollar paycheck which I can not
simply understand why any normal hard working people needs
millions a year paychecks it is a desire for us to have a few
millions to provide for the rest of our life but no we are not
allowed that except for the elite folks whom scams us
for their fat paycheck and given themselves the raise first
and leave us for the least amount of raise if we get any

so many of the corporate executives wants the millions
dollar paycheck and many of them do while we are the
lower middle class are breaking our backs and getting more
regulations imposed on us with less pay and or no pay raise
we are being so cheated out of just about every thing you can
think of

hey wait a minute who else is cheating us beside corporates
executives -- well you name it? The government is doing that
too which the corporate and government each other right hand
let us put that in perspective while we are the lower middle class
is making at Minimum Wage and or not much above is cheaper
for corporates and government well it is true
we know why corporates likes to pay us low wage but
how is the government is involved well let us look at
social security and medical care while we make
low wage income our SS and MC is not much either
when we do retire is also cheaper for the govt
while those high income earnings folks such as
corporate executives will be getting as good sizable
sum for their retirement with SS & MC and 401K and
pension plan and where do with fit in all this
we are their provider paying taxes and products
that we purchase which is taking account from raw
to the end is you the customer and tax payer


so in overall we the low income folks are paying them
their lifestyle and fat paycheck and their taxes too
and also their personal expenses as well is the burden
of the low income to provide

[cccbaxter]

...wagging the dawg...

[gmw7777]

Many politicians/Madoffs think the public is stupid because we are busy working and we assume (hoping against hope, as it were), that they are too. They're working alright:: solely for themselves and their family/friends. It's too bad that they don't seem to understand that they could accomplish both public service AND self-service, as we all do in one way or another and then everybody wins.

For any Obama, or Clinton bashers or (even) Bush bashers: The fault for this economic meltdown rests squarely on the shoulders of none other than RONALD REAGAN and a compliant Congress from 1981-89. "Mr. Popularity" was fond of destroying all government "interference" in the name of a "free market." He accomplished this (with the help of Congress) by tearing down or severely weakening the impact of (almost) all regulations: SEC, telephone companies, banks, etc. He tried to dismantle Medicare/Medicaid as well but that was too much even for him! And don't forget his "brilliant" concept of the "Trickle Down Theory": that the subsequent riches proceeding from this deregulation of almost all government oversight, would eventually trickle down to the "deserving" poor. Utter and complete nonsense and complete selfishness! This is when Madoff really started to defraud people as well (no government oversight or "interference.")

"The government has stepped in four times to help AIG through $170 billion in bailout packages, in large part because it had issued risky credit default swaps -- a kind of insurance for bad loans made by banks and investment companies." This is a direct quote from today's news on the MSNBC website. The government now owns 80% of AIG.
ABSOLUTELY NO BAILOUTS IF BONUSES ARE GIVEN AND RECOVER ALL PREVIOUS BAILOUT MONEY.

Finally, NO TAX COLLECTIONS until the government is truly responsive to "We the people..." Then watch how fast the government will act! (Sorry, Mr. Obama, but if something definitive isn't done soon, we could very well have another revolution like that of France in the 18th century). The people have had enough. Does money grow on trees in Washington, D.C.? .

[bajajohn1]

Fire all the bums at AIG. All of the incompetent people in America should not be clustered in one building.

[mcv57]

Well, there you go folks. Once a corporate thief; alway a corporate thief ... did you really expect anything different - remember Katrina.

[walt1944]

Everyone is so upset with AIG heaping rewards in the form of bonuses and perks on people who brought about the failure of the company in the first place.

Unfortunately, this is absolutely NOTHING NEW. It happens in EVERY major corporation in America, with corporate executives who don't know their "arse" from a hole in the ground, getting tons on money and perks for making bad business decisions and when things get worse because of those decisions, they making even more bad ones by firing workers, cutting back on the "benes" of those who survived, and gouging the customer.

Naturally, these corporate executives won't give up any of their perks, won't take a paycut, or give up THEIR lifestyles, but they are perfectly happy that YOU GIVE UP YOURS!!!!!

It's called "business", American style and has been going on since the days of Richard "the Trickster" Nixon.

I say, let them ALL fail, the big banks, AIG, Wall Street, everyone. I would hate to see all the average workers suffer, but if it means that the rotten apples suffer too, then maybe its worth it!!!

HAIL OBAMA!!!!