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Seventy-Three AIG-ers Got More Than $1 Million Each In Bonuses
We're learning a bit more about the breakdown of those AIG bonuses -- thanks to New York Attorney General Andrew Cuomo.
In a letter sent to House Financial Services chair Barney Frank, Cuomo, who is probing the awards, wrote that seventy-three members of AIG's financial products unit were paid more than $1 million each.
And get this: Though the payments were called "retention" bonuses, 11 of those 73 millionaires, including one who got $4.6 million, are no longer even at AIG.
So if, as AIG has claimed, the bonuses were handed out for the purpose of holding on to talented employees, they often didn't succeed in doing so.
Continuing the breakdown, Cuomo wrote that one lucky employee got more than $6.4 million, seven received more than $4 million each, and the top ten raked in a combined $42 million. None of the recipients were named.
Cuomo, who is also looking into the $3-4 billion paid out by Merill Lynch in bonuses, wrote in the letter:
A.I.G. made more than 73 millionaires in the unit which lost so much money that it brought the firm to its knees forcing a taxpayer bailout. Something is deeply wrong with this outcome.
Josh
Zachary
"None of the recipients were named."
Yet.
March 17, 2009 2:12 PM | Reply | Permalink
Don't hold your breath.
Historically, white collar criminals of this type are protected by other white collar criminals who have yet to be caught.
Even the major stockholders or the members of the Board of Directors of AIG have not been publically identified and they are the people who are benefitting from the other 99.9% of the bailout money being given to AIG.
March 17, 2009 3:01 PM | Reply | Permalink
Well, I suspect there will be leaks and investigations.
I do agree this is basically a cover-up and hush money.
Does anyone really think the top executives and board at companies like AIG didn't know how dangerous and potentially fraudulent sectors of their company were? Such as AIGFG. But if we start asking if they were basically crooks, then next people will ask about executive culpability, and questioning their bonuses. Next, where's oversight from the board? Next, where's oversight from the financial media and regulators? Next would be looking at conflicts of interest between media conglomerates and the financial sector. Or the revolving door between business and government.
Much of the elites were in on it. And they don't want to open that can of worms any more than Ken Lay wanted to bust Skilling or Fastow, or Bush wanted to investigate ENRON, his #1 campaign contributor.
The Bush admin deliberately inflated a bubble to pump their economic numbers. He was happy to have good economic numbers from various schemes. Bush's largest contributor in 2000 was Ken Lay and ENRON for Christ sake. GW Bush spent most of his adult career paid to sit on boards as a pro-management dupe. He made his fortune trading influence to basically rip off taxpayers in his stadium deal.
Bill Clinton was always a "pro-business" Southern Democrat, from WALMART's home state, and Hillary even served on their board. Bill did NAFTA, and helped scuttle Glass-Stegal which was designed in the last Great Depression as a firewall between these kinds of risky derivatives and commercial banking.
March 17, 2009 7:56 PM | Reply | Permalink
So what's the legal impediment to trying to collect back money given as bonuses to AIG employees no longer there? Doesn't seem to be one according to the AIG white paper, nor does there seem to be a legal impediment with regard to crossparty defaults concerning this money. That money comes off the table for future dolings.
March 17, 2009 2:16 PM | Reply | Permalink
Obama needs to match his rhetoric with action. The AIG CEO who allowed this to happen should not even be there anymore. Neither should Geitner. The government owns AIG and that means Obama should be calling all the shots, firing anybody who doesn't fall in line. That's the way a business must be run.
If the government can force GM to renegotiate contracts with their employees - and the government doesn't even own GM - there is no reason whatsoever that the same can't be done at AIG. The public rightly sees this as one set of rules for blue collar workers and another for white collar thieves, and they will rightly hold Obama and the Democrats in charge responsible.
March 17, 2009 2:45 PM | Reply | Permalink
Why aren't these folks in cuffs at this point?
This is nothing other than FRAUD.
Let's get some perp walks going to scare the %*@W$%^ out of these a--holes.
March 17, 2009 3:01 PM | Reply | Permalink
That's the word. And I think there's a very strong case for charging them with fraud and getting a conviction.
It's clear that the word "retention" was used to make these look like something other than what they were: bonuses. If those employees weren't retained, no check should have been subsequently issued.
March 17, 2009 3:50 PM | Reply | Permalink
Hush money.
This is just too obvious. If these guys aren't in shackles within the next few weeks, one can only conclude that elected representatives and government officials have colluded with the criminals.
If the Obama administration does not act to enforce law, it will destroy the Democratic Party just as the Republican Party has already been destroyed. What we're seeing is akin to the looting kleptocracy that stole Russia blind shortly after the fall of the Soviet Union. One might even suspect the same US players from world investment houses responsible.
Considering the astonishing lack of public transparency in these proceedings, conspiracy theory is all we have left. This is how a republic dies.
March 17, 2009 3:16 PM | Reply | Permalink
The USSR collapsed under its own weight when politicians and the rich robbed them blind. No one wants to believe it, but the US could fall apart as well.
At least I live in Great Plainsistan (Flyoveristan? DesMoinesistan?) We grow our own food and have trees to burn and guns to defend ourselves so we'll survive. Maybe we can trade our corn and bacon for some oil or a few lumps of coal.
March 17, 2009 3:43 PM | Reply | Permalink
We have coal, gas and water to trade here in WV, at least until the water gets sold to Wall St.
We also grow lots of good cash crops too.
We won't talk abou the guns.
March 17, 2009 3:59 PM | Reply | Permalink
I live close to Humboldt County, CA. (2 hours' drive, a lot longer if you have to use other modes of transport because there's no gasoline left.) They grow quite a cash crop there, as well.
March 18, 2009 3:24 AM | Reply | Permalink
I was just going to write the about the "hush money" concept. Thank you! Perhaps I've lived in Chicago too long, but all of this strikes me as very, very corrupt. To make matters worse, these bonuses have already been paid and are undoubtedly sitting ins bank account in The Caymans. Who knows where the recipients may have traveled, and it seems too late to revoke their passports.
There are credible financial institutions out there that have not made the front pages with negative news recently. Not everyone in the financial industry is living lavishly. AIG, however, has had a reputation for "excesses" for some time.
March 17, 2009 4:07 PM | Reply | Permalink
Wait a second, if these guys and gals left prior to fulfillment of their obligations under the retention contract, there would obviously be a breach of contract claim. Apparently, these folks fulfilled whatever obligations they had under the contracts or the money would not have been paid. While one can certainly criticize "management" and Treasury for negotiating and agreeing to these deals, I'm sorry, I just don't see how the employee is the "boogey man" in this story.
March 17, 2009 3:32 PM | Reply | Permalink
The employees are the boogey men because they're the ones who f'd things up. Take the money and run - isn't that what all thieves do?
March 17, 2009 3:45 PM | Reply | Permalink
If that's true, why are these guys just sitting around waiting for a bonus? Because they aren't the real criminals.
The real culprits are LONG GONE to Europe. They left the plebes and underlings to take the heat and provide a distraction. Now everyone is all about this $165 million; they aren't even thinking about the BILLIONS that have already disappeared into some deep-dark pockets.
I don't want the staff! $6.4 million?!?!?! ARE YOU FUCKING KIDDING ME????? Cassano rolled out with over $280 million in '08 compensation alone - not mentioning the consulting and bonuses he also received.
Wake me when you are actually serious about going after the criminals who engineered this.
March 17, 2009 4:26 PM | Reply | Permalink
Anyone who's worth a million bucks plus should've been smart enough to recognize there was a problem and had enough intergrity to report it.
By the way, at what point did I say we shouldn't go after Cassano?
March 17, 2009 4:59 PM | Reply | Permalink
Are you really so naive as to believe that they 'fulfilled whatever obligations they had . . . or the money would not have been paid."
Have you ever worked in corporate America? Believe me, the boys in the board rooms and corner offices live to take care of each other. They are all so totally incompetent that the only way they stay in power is to keep their little club going.
I worked in insurance and banking for 20 years from just out of college until I walked away 15 years ago, it was clear to me that competence was far less valued than following the club rules and pretending to be masters of the universe. I always said that the only reason business didn't collapse was because the US held an advantage over other countries, and that if that ever disappeared we'd be in a world of hurt. I'd say, "I told you so," except I'm as screwed as everybody else.
Makes me even prouder that as a young woman of 25 I started a probe into the small bank where I worked that found illegal behavior and got rid of the corrupt men who ran it. I was never as successful again.
March 17, 2009 3:46 PM | Reply | Permalink
No, I'm not naive and have for the past 25 years worked in the Financial Industry. . .my point is that usually, Retention Bonus contracts provide that if you work for a certain period of time and perform the duties you are asked to perform, you will get paid X. If any of these folks didn't perform the work they were supposed to, then by all means go after them and get the money. I'm just a little tied of folks on this and other liberal sites I read get all "No Quarter'd" and start assuming that anyone who makes over a certain amount must by definition be corrupt.
Seriously, congrats to you for "whistle blowing" on corrupt individuals, but not everyone who works in the business a lazy, corrupt sob. For some balance on the AIG payout issue, please see the follwoing article in today's NY Times:
http://www.nytimes.com/2009/03/17/business/17sorkin.html?ref=business
March 17, 2009 3:57 PM | Reply | Permalink
Anyone who runs a company and a nation's economy into the ground and takes money for it is corrupt.
No one here is saying that everyone in the business is lazy and corrupt. But anyone who worked at AIG and didn't blow the whistle on what was happening is either corrupt or had his head up his ass.
March 17, 2009 4:04 PM | Reply | Permalink
Of course not everyone is corrupt - I can recall a few good people from those years. But overall I have to say I saw more incompetence than competence.
A few examples:
At one insurance company there was a manager who used to leave for 'meetings.' He was slipping out to the nudie bar down the street. Several of his peers knew this, but he did more damage inside the office than out, so they didn't do anything. It wasn't until the boyfriend of the stripper he'd been stalking showed up in the office with a gun that anyone spoke to him. But they didn't fire him.
I did a report that was signed off on by 3 officers before it went to the client. In two years I made one mistake. That report was signed off on by all 3 officers, but I was the only one with a note in my file.
There was a rule that employees could have one mortgage at a discount rate. I was doing due diligence on mortgage files and found an agent who had two. I was told to ignore it; I documented everything I was told. I listed it in my due diligence report; it wouldn't have be diligent to ignore it. I was told by the head of the division that I could forget ever getting a promotion - I obviously wasn't a team player. (As if the boys ever invited the girls to play on the team1)
Another company was brought down by one division (sounds familar, no). Before the examiners came in a bunch of the boys held a midnight shredding party. One of the night cleaners saw them and when he was questioned by the examiners told the truth. The boys savaged him and fired him. Eventually the truth came out, but by then the company was bankrupt and the poor guy never saw a penny.
And that doesn't even begin to cover who was sleeping with whom and who got promoted or fired because of THAT.
All of this and more happened at only four companies. I can't believe that I worked at the only four bad ones in the country. So I maintain that most of the corporate businessmen in American were just damn lucky for the past 60 years and when the crunch came, they just weren't up to the job.
March 17, 2009 4:46 PM | Reply | Permalink
See this is exactly the problem, from within the financial services industry, all this is pretty much legal. You guys are sharks who fleeced the suckers and the rules were set up to allow you to do that (as an industry I mean).
From outside the industry, sharks aren't so popular and saying "but we made the rules so sheep get fleeced and sharks get fed" isn't really an argument for anything except a new set of rules. Rules that are, perhaps, as ugly to sharks as the old ones were to sheep.
It may have been legalized, but the whole industry turned itself into a vehicle for fraud.
March 17, 2009 4:54 PM | Reply | Permalink
Unless you're one of the guys at AIGFG getting a bonus in the millions, you're not even in the same league. And to them you're just as much a chump as "Grandma Millie" the ENRON traders were gleefully ripping off.
Though I have to say, I'm a bit sick of basically honest people in various industries enabling this sort of rampant fraud by convincing themselves everything is OK because they're just following the rules. They tend to be the same sort of people who continually spout laissez faire gibberish, and then act utterly surprised when these sorts of scandals erupt, claiming it's an oddity.
For example, anyone living through this era of rampant financial fraud, who continues quoting Milton Friedman and claiming it's really the public secotr bureaucracy suffering from conflicts of interest and widespread corruption, while the markets are self correcting due to the virtues of self interest, well, that person deserves to be repeatedly projectile vomited upon in a public square. Just to return the favor.
March 17, 2009 8:07 PM | Reply | Permalink
Can you spell bamboozle??
March 17, 2009 4:00 PM | Reply | Permalink
I believe it's A-I-G-F-P. Although the last 2 letters should be F-U.
March 17, 2009 4:14 PM | Reply | Permalink
TAXES. Let's all stop paying our taxes until we get this thing cleared up. In the meantime, let's protest this thing everyday. I'm so pissed!!
http://takebacktheeconomy.org/
http://www.bailoutpeople.org/
March 17, 2009 4:06 PM | Reply | Permalink
Somebody needs to be going to jail.
No, I take it back... a whole lot of somebody's need to be going to jail.
March 17, 2009 5:13 PM | Reply | Permalink
"Only under the bizarre system of incestuous relationships that dominates Washington would the people's representatives be debating whether or not to pay those responsible for this debacle according to their contracts, rather than whether or not to send them to jail."
I do not recall who said this but it fits here.
March 17, 2009 5:25 PM | Reply | Permalink
They galted while the galting was good.
March 17, 2009 7:46 PM | Reply | Permalink
lol. I've been saying for over a decade all these a-holes basically want to live Ayn Rand's novels which they revere. It still boggles my mind Alan Greenspan was a great admirer of Ayn Rand. That would be like finding out the head of NASA is a serious fan of alchemy and black magic, and looks for unicorns on his weekends.
But never in my wildest imagination did I expect to see FAUX News actually openly admitting that people should "go Galt."
I propose we also start openly admitting we'd like very much for them to "Go Galt" even at gunpoint if need be. Only I think considering what ingenuity and self reliance these people have, they shouldn't need much else, which is why they should be stripped of all assets before being deposited on remote desert islands to build their uber civilization.
They won't need engineers or scientists, nor manufacturing nor agriculture, nor medicine or community. They can levitate around on the power of motivational speak and accounting tricks. They can literally eat their words for breakfast lunch and dinner. If injured, no worries, they can just externalize the cost of healing broken limbs and disease onto others.
March 17, 2009 8:33 PM | Reply | Permalink
I'm so mad my head hurts. But I don't see the outrage CNN is spreading. I don't see people running around with guns shooting up Wall Street bystanders. I don't see lynchings in public squares of random execs. I see frustrated and tired citizens really trying to hold onto some hope.
What pains me more is that Obama isn't doing anything but making stupid and worthless tirades. Right now he's acting like a wimp by not forcing AIG to give up the bonuses.
Thank God American's haven't resorted to violence for retribution, but if Obama doesn't start acting like a President who will do more than give speeches, I don't know how much longer people will hold on.
March 17, 2009 9:45 PM | Reply | Permalink
I don't see what shooting innocent bystanders would accomplish. I do see the utility of some show trials and public humiliation though.
Just brainstorming here...
There must be a humane way to reinstate some equivilent of pelting crooks with rotten tomatoes. Maybe when someone who has been so powerful and wealthy does such enormous harm to society they should be given the lowest job in that society. So for example, these guys could spend the rest of their lives cleaning toilets in prison. Or perhaps furloughed around the country, as a traveling toilet cleaning service, exclusively catering to the janitors of the companies they flushed down the toilet.
It could be a real reality show.
I also see enormous value in embargoing and seizing assets and global havens for criminals. Why invade some third world country for resources you then have to extract while militarizing the local populace against you?
Seems it would be far more sensible, and rewarding, sending the Marines into the Cayman Islands.
March 17, 2009 10:35 PM | Reply | Permalink
"Let Granny freeze!" -- no wait, that was Enron, Bush's top backer "Kenny boy".
The word for AIGFP is .... looting.
March 18, 2009 1:04 AM | Reply | Permalink