Who Was It Who, Oops(!), Forgot to Add a Clause to Prevent Humungous Bonuses to AIG Execs?
By SusanUnPC on March 17, 2009 at 10:20 AM in American Consumers, Bamboozling, Bank Bailouts, Economy
Can you name the person in charge — who was “in the room” at every turn — “who put together the original rescue plan for the American International Group”?
Can you guess the identity of that same person who, oops, didn’t bother to add a clause to the rescue plan that would guard taxpayers against being bilked by AIG’s executives who are now — barring a legal miracle — lining up for a pay-out of “hundreds of millions of dollars in bonuses”?
Can you figure out who was in charge of the “Federal Reserve Bank” which — operating entirely on its own on September 16, 2008, outside the purview of other government entities, including Congressional oversight — “created an $85 billion credit facility to enable the company to meet collateral and other cash obligations, at the cost to AIG of the issuance of a stock warrant to the Federal Reserve Bank for 79.9% of the equity of AIG? And, in November 2008, enabled “the U.S. government [to revise] its loan package to the company, increasing the total amount to $152 billion”?
Can you say the name of the person who many Wall Street executives said “deserves retirement, not promotion“?
Stumped? That’s okay. But don’t you think that person should be in the stocks so you can take turns throwing mud pies at his face? And shouldn’t that person be put out to pasture, kicked out on his ear and ridiculed and despised worldwide as much as Bernie Madoff? Well, maybe not, if you knew that the person in the stocks would be:
Timothy Geithner.
So sayeth a late November article in the New York Times’s “DEALBOOK COLUMN; Where Was Geithner In Turmoil?.”
And please keep in mind that it was PRESIDENT BARACK OBAMA who picked Tim Geithner as THE guy to bring in for Secretary of the Treasury. Yes, instead of the “retirement” he deserves, Mr. Geithner got the “promotion.”
Let the liberals blame the Bush administration all they want — well, they did have oversight of Mr. Geithner’s activities in September 2008 — but, why would PBO hire this man? Check this out, from the November 25th article written soon after Mr. Obama’s election;
President-elect Barack Obama unveiled on Monday an economic team with deep experience handling economic crises. But does the man at the center of this star-studded cast, Timothy F. Geithner, the nominee for Treasury secretary, have what is needed to take the nation in a new financial direction?
That is what a number of Wall Street chieftains are quietly asking, even after the stock market surged with relief after his nomination.
One reason Mr. Obama gave for nominating Mr. Geithner was Tim’s ”unparalleled understanding of our current economic crisis, in all of its depth, complexity and urgency.” More important, he suggested, ”Tim will waste no time getting up to speed. He will start his first day on the job with a unique insight into the failures of today’s markets — and a clear vision of the steps we must take to revive them.” [...]
… Mr. Geithner’s involvement in several ultimately ill-fated efforts to buttress the American financial system is the very reason some Wall Street C.E.O.’s — a number of whom spoke on the condition of anonymity for fear of piquing the man who regulates them — question whether he’s up to the challenge.
”We have only two things to say about Tim Geithner, who we do not know: A.I.G. and Lehman Brothers,” said Christopher Whalen of Institutional Risk Analytics. ”Throw in the Bear Stearns/Maiden Lane fiasco for good measure,” he said.
”All of these ‘rescues’ are a disaster for the taxpayer, for the financial markets and also for the Federal Reserve System as an organization. Geithner, in our view, deserves retirement, not promotion.”
Ouch.
”He was in the room at every turn of the crisis,” said another executive who participated in several such confidential meetings with Mr. Geithner. ”You can look at that both ways.”
[...]
Behind the scenes, Mr. Geithner was the point person for weeks of sleep-deprived Bailout Weekends. It was Mr. Geithner, not Mr. Paulson, for example, who put together the original rescue plan for the American International Group.
And, of course, Mr. Geithner also oversaw and regulated an entire industry whose decline has delivered a further blow to an already weakened American economy. Under his watch, some of the biggest institutions that were the responsibility of the New York Fed — Bear Stearns, Lehman Brothers, Merrill Lynch and most recently, Citigroup — faltered. While he was one of the first regulators to smartly articulate the potential for an impending disaster, a number of observers question whether he went far enough to stop the calamity.
Perhaps what has most people on Wall Street stirring is Mr. Geithner’s role in the fall of Lehman. At the time of its bankruptcy, he, along with Mr. Paulson, appeared to be the most vocal in supporting the government’s refusal to bail out the firm, according to people involved in various meetings. With hindsight, many in the financial industry blame a deepening of the global financial crisis on the government’s decision to let Lehman crumble.
Perhaps not surprisingly, there have been moves afoot in recent weeks by some in the New York Fed and Obama team to put distance between Mr. Paulson and Mr. Geithner, whose salary was $398,200 last year and who will take a pay cut to $191,300 in his new role.
These include the suggestion that Mr. Geithner was not in league with Mr. Paulson over Lehman; that Mr. Geithner pressed to save the firm from bankruptcy; that he was a lone voice on the subject and was overruled by Mr. Paulson and Ben S. Bernanke, the Fed chairman, on this issue.
The validity of this new claim is hard to verify. The New York Fed declined to comment.
Many executives suggest it may be a bit of revisionist history. ”If that’s true, he did a good job of hiding it,” said one executive who spent the weekend at the New York Federal Reserve the weekend of Lehman’s fall. …
Perhaps Mr. Geithner best skill is his ability to skate along side the media, as they join the highly popular rage at the AIG bonuses, while daintily side-stepping Mr. Geithner’s direct role in writing the deal that allowed those AIG executives to collect those big bonuses.
(Release: November 13)
on sale for only $16.95.
has a spatula.)
And check out these: 
("This crazy redhead is on to something. Her pink Rambler story alone is worth the price of the book," writes 
- “Richard Sale’s reportage on Washington, the CIA, the American armed forces, and foreign intrigue has created a perfect background for this account of the steady growth of President Clinton as a master of the game of nations.”--W. Patrick Lang, former head of Middle East Operations, DIA
"Anne C. Heller's stunning biography of Ayn Rand" uses a "plethora of newly unearthed research and fresh insight."
FOR IMMEDIATE RELEASE:
Is “Barack Obama’s America” a “pitiful, helpless giant?”
“More mush from the wimp? Been there, done that,” says Andy Martin
(NEW YORK)(March 17, 2009) Barack Obama is talking tough again. Reach for your wallets. Obama has directed his hopeless and helpless Treasury Secretary, Tim Geithner, to “pursue every single legal avenue” to recover the bogus bonuses of AIG. Yah, sure. Why would Obama call on a “banker,” not a lawyer to take legal action? Read on.
The Treasury Department and Federal Reserve have done nothing for months. These sclerotic bureaucracies are not going to change direction after they previously approved the obscene bonus payments to AIG. When will someone stand and fight against the AIG kleptocracy?
(snip)
Obama can’t deny he is acting like a “pitiful, helpless giant.” He is one. The latest disgrace over Geithner comes with the excuse that TG did not become “personally” aware of the AIG robbery until last week. “Personally” is another weasel word. What is happening at the Treasury Department when the man-in-charge knows nothing about the looting of AIG? Doesn’t TG read the newspapers? Why do people in charge accept the ridiculous claim that if we don’t pay extortion to AIG fixers, the crooks will abandon ship and leave us stranded?
During the campaign Obama falsely portrayed himself as a “law professor” (his title was actually “lecturer”) and boasted fraudulently about “litigating civil rights cases,” all of which was a pathetic distortion. Obama was at best attorneys’ arm candy, an African-American ornament that was used by real lawyers to make their case in court. Obama never tried a lawsuit in any court and, so far a I am aware, never even served as “second chair” trial counsel either. (Hint: all of this is in my book.) Obama’s legal career reflects great intelligence but a total absence of professional accomplishment.
With the AIG looting we confront a real legal problem in the real world: a claim that a “contract” gives a band of AIG’s Barbary Pirates the right to extort the people of the United States. Would a real lawyer show up and tell the public he was exploring “legal avenues” when he should have already directed the Attorney General to file suit? Capitulation and surrender, anyone?
(snip)
So when Obama starts with the weasel words, such as “legal avenue,” it looks to me like a form of capitulation in progress. His words have “meaning.” Eventually someone will say there was “no legal avenue,” and that will be that. Especially when Geithner only “personally” learned of the asportation just hours before the checks were in the mail.
What’s going on here? In the short run, nothing more than classic “Barry O” damage control. In the long run, the American people are being drawn and quartered by Obama’s Wall Street campaign contributors while the Obamas dance and feast at the public trough with $100 a pound steak and other high-life accouterments in the White House. The capitulation-in-progress to AIG looks like another installment of the “earmarks” surrender, where Obama was against earmarks during the campaign, before he approved them as president.
(snip)
If Obama wanted action, he should have had Attorney General Eric Holder standing next to him, not the goofy Treasury Secretary. On the contrary, Obama should have fired Geithner on Monday; he had the perfect opportunity to unload TG. The AG should have said “we are filing suit to recover the money,” and that would have been that.
———————————————————————-
———————
“The most potent weapon in the hands of the oppressor is the mind of the
oppressed.” –Steve Biko
Time magazine has an interesting article this morning.
http://www.time.com/time/politics/article/0,8599,1885668,00.html?xid=rss-topstories-cnnpartner
The title is “Obama’s AIG Outrage: All Talk, No Action”
That’s “wet rock”, not pet rock. Time is calling him out on his lack of a plan and his cavalier attitude towards the losses of the average American in the stock market. About friggin’ time, I think, don’t you?
Too bad they didn’t do this before the election, when it would’ve done some good…
Great find FLDemFem.
Jim Cramer brought up Geithner’s role after Obama picked him for Treasury but no one else in the media even bothered to talk about it. When someone had the temerity to address the Geithner issue they were summarily silenced with “Give Obama a chance to field his team” or “This it will be different because O is in charge.” I believe this type of examination is exactly what Stewart said the media didn’t do enough of, but neither he nor anyone else in the MSM examined O’s picks with an honest impartial eye; except in this particular case Cramer did.
This is not a defense of Jim Cramer and anyone who took his advice as the sole instrument for divining their personal investing strategy got what they deserved. Advice for a screaming lunatic on a show appropriately named “Mad Money” because only the insane would follow the advice given.
This is not a defense of Jim Cramer and anyone who took his advice as the sole instrument for divining their personal investing strategy got what they deserved. Advice for a screaming lunatic on a show appropriately named “Mad Money” because only the insane would follow the advice given.
I don’t think that Cramer considers himself my investment adviser. And I certainly don’t think of him as mine. Anyone who does is a fool. Most people invest with someone who knows their financial situation, plans, etc.
Now, the guy who is playing president? He sold lots of people lots of stories. When do we start holding him to the same level of standards we are holding Jim Cramer to?
I completely agree! On the same note I tell anyone who was outraged by Michael Phelps smoking a bong why they didn’t think it was a big deal that Obama said he did when he was young? They always say it is different and Phelps is a role model. I just walk away laughing realizing that they have suspended all reason in order to maintain their sanity.
You are so right! You think Kelloggs would consign boxes with 0mama to the soup kitches in this country? Right. Sure. Nothing to see here ….
The sad part is that you have the Resident of the US in his own voice reading those words for profit on his book on tape … I guess no one wants to call him out on it?
I’ll not defend Cramer one way or another about anything but I’ll say this, he raises a VERY provocative and interesting idea the post I’ve linked below. AIG holds somewhere north of 70% of all CDS obligations. We own AIG. If we open AIG’s CDS book, we’ll know exactly where the remaining systemic risk lies. Uncertainty OVER.
http://www.bloggingstocks.com/2009/03/17/cramer-on-bloggingstocks-aigs-the-ultimate-gamblers-guide/
Are you sure? Or did Wall Street dictate who Obama picked, perhaps?
Now we know why the primaries and the election campaing were run so viciously:
there was a lot at stake for the “Street”.
Are you sure? Or did Wall Street dictate who Obama picked, perhaps?
Now we know why the primaries and the election campaign were run so viciously:
there was a lot at stake for the “Street”.
1. Why weren’t these rules written into the AIG contract in the first place? Geithner is in charge of that department, both as Treasury Secretary now and as the backer of the original AIG bailout when he was head of the New York Federal Reserve. Given that he was in charge of both AIG bailouts, why isn’t he taking a lot more of the blame for this? More than anyone else in the government, Geithner could have prevented these bonuses. He failed.
2. Further, given that we were promised improvements in TARP under the Obama administration, why did it take a public outcry to actually improve these contracts? Larry Summers sent a letter that dissuaded Senator Chris Dodd from passing legislation to legally mandate improvements TARP. Given the promises that were made, why aren’t there guarantees against this sort of excess in all TARP contracts written by the Obama administration? Larry Summers promised us there would be. He failed. Maybe its time for the “very severe hostility” Chris Dodd had threatened?
3. Why isn’t everyone at AIG involved in the scandal about to be fired? We own 80% of the company, so we should be able to hire and fire people, right? And even if we can’t just hire and fire people, we can apparently still change the contract. As such, why can’t we make firing people involved in the scandal conditions in the contract? Everyone involved in this should be fired. They took $170 billion in government money than used it to line the wallets of already wealthy employees. Fire them now.
4. Finally, there is a fairly obvious legislative solution that will allow us to get the money back: just pass a law requiring a 100% tax on bonuses paid to employees at companies that have received bailout funds. In fact, Representative Carolyn Maloney is about to introduce a version of said legislation. In the current political environment, where only 14% of the country opposes giving back these bonuses, it probably has about a 99% chance of passing. As such, why do Summers and Geithner keep saying there is no way to get the money back? Clearly, there is a way. Are they lacking in imagination, or are they protecting the executives?
http://www.openleft.com/showDiary.do?diaryId=12256
The AIG executives have taken the bonuses and then left the company. At least that is what the breaking news says..
http://www.cnn.com/2009/POLITICS/03/17/aig.bonuses/index.html
That sort of blows this out of the water, don’t you think?
Sen. Grassley seems to have the right idea.
I have a set of very sharp kitchen knives I am willing to donate to AIG in the event they decide to follow Grassley’s advice. Heh.
They KNEW ABOUT AIGs BONUSES LAST FALL. What a bunch of LIARS this administration is….
Article from NYTimes….
http://www.nytimes.com/2009/03/17/business/17bailout.html?ref=business
I read that Bloomberg did some fine reporting on this story.
Absolutely, they knew! They just gave AIG another 30 billion two weeks ago knowing about these bonuses. If it takes the payment of these bonuses to expose this incompetent and corrupt administration and dems in congress and slows down this freight train toward socialism, I say that is money well spent.
One hint on why Obummer isn’t being as tough on bankers as he should be can be gleaned from his campaign contributor list.
Here is the list of all his bundlers. As you will see, many of the top bundlers work for banks and the industries that are getting bail-outs from the government. It’s my guess he is making sure they are in a position to contribute in his next campaign, should there be one.
http://www.opensecrets.org/pres08/bundlers.php?id=N00009638
This doesn’t even cover the contributions under $200 made with prepaid Visa cards. I’ve read that over 200 million was donated, in this fashion over the internet. The campaign also paid its volunteers(oxymoron) with prepaid Visa cards supplied by Soros. I wonder if their is a connection here that Jon Stewart might want to follow.
Jon Stewart is a coward. He plays to his little in studio audience who cheers and applauds. The last thing his “intellectual honesty” sic would permit is any research into any area that might (dare we utter it outloud?) be critical of The 0ne?
auh contraire. Forgot….or didn’t ya’ mean REFUSED.
How many times do they need this to hit them. Scream and politicize with “bad bad”, faux outrage, go down the list.
But when it comes to doing something instead of giving empty words, Weary Barry is a miserable failure.
This all started way back when McCain was trying to put this in the TARP bailout bill and Pelosi and Reid and Obama cried foul and accused him of politicizing and {raising awwareness) and risking non passage. OH GEEZ!
The Democrats, use faux outrage for political gain. Never action on what they claim. How many times have they had an opportunity to fix this?
RIGHT!
Really, it depends on what you mean by “miserable failure”. I think he is doing just fine by the people who bankrolled his campaign and “arranged” his nomination. They are
smiling/grinning/laughing all the way to the bank?What would I do without NQ Posters and Commenters? Deepest thanks.
If noone bothered to make sure that AIG would use the money that the tax payers gave to them wisely why should we blame them lets look at all the people that are supposed to be taking care of us.The president put someone in charge that couldn’t even manage his own taxes and I’m sick of congress questioning all the big wigs and then doing nothing. They should all look at themselves and we should vote all of them out and start with all new people.(MAYBE THATS NOT A GOOD IDEA BECAUSE WHO THE HELL PUT OB IN THERE THE GUY THAT SAID HE WAS GOING TO CHANGE THE WAY WASHINGTON DID THINGS)
This is a great post. Even without cross-checking the information contained herein, certainly, if any monies received by AIG - income? - must go to pay employee bonuses as a fulfillment of previously negotiated contractual obligations, certainly, whoever fashioned and approved - read, signed - the public bailout (2nd) of AIG should have restricted receipt of these funds to only those firms who promised to use the funds to shore up shortfalls in existing indemnity accounts and not to pay out these pre-negotiated bonuses. There should have been a corresponding provision that should any public funds received by AIG be paid out in bonuses in violation of this provision; this constitutes a criminal offense.
Who could imagine that after all the money we pay to our federal officials, we would still be left holding the bag to micromanage our government?
Dodd added it in that they get the bonuses
Chris Dodd has some Spainin To Do.
While the Senate constructed the $787 billion stimulus last month, Dodd unexpectedly 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 seeking to tax. The amendment is in the final version and is law.
Also, Sen. Dodd was AIG’s largest single recipient of campaign donations during the 2008 election cycle with $103,100, according to opensecrets.org.
check out this post and forward it on, this is a great idea!
http://www.bloggingstocks.com/2009/03/17/cramer-on-bloggingstocks-aigs-the-ultimate-gamblers-guide/
I’m wondering if this AIG “outrage” is the start of an excuse for Obama to dump Geithner and make him the scapegoat.
Don’t kid yourselves. Geithner knew that the big bonuses where necessary. With them the big guys at AIG who know what exactly the ‘legacy assets’ are all about (formerly called toxic assests) can buy them for 5 pennies on the dollar - MAX - and rescue the entire economy of the 20 big banks and investment funds. Yeah. And once they are completely fed and filled with them, then they may tell some of their colleagues in Wall Street which ones to buy and which ones to let the Federal Reserve to purchase.
Geithner, the darling of the AIG big ones.
At 5 cents max on the dollar, 165 million can buy 3.3 billion in toxic assets and make this people abundantly rich forever.
ALBANY, N.Y. – Troubled insurance giant American International Group paid bonuses of $1 million or more to 73 employees, including 11 who no longer work for the company, New York Attorney General Andrew Cuomo said Tuesday.
http://news.yahoo.com/s/ap/aig_cuomo
http://www.foxbusiness.com/story/markets/industries/finance/dodd-cracks-aig—time/
Amid AIG Furor, Dodd Tries to Undo Bonus Protections He Put In
Senator Chris Dodd (D-Conn.) on Monday night floated the idea of taxing American International Group (AIG: 0.9268, 0.1467, 18.81%) 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.
Dodd’s office did not immediately return a request for comment.
One of AIG Financial Products’ largest offices is based in Connecticut
…….at link
I’m surprised that we taxpayers even know where the bailout money to AIG is going. Have these AIG bonus payouts been made public, or are we hearing about these bonuses through leaks?
or are these bonus leaks a well-planned Obama leak?
Maybe Dodd is a target!
Has he done something the one didn’t like lately?
Dodd is expendable … I hope Barney Frank isn’t counting on his next two terms…
Most likely Geithner will be out soon, too.
hmmmmmm, who might have Obama really wanted when he appointed Geithner (knowing he would set him up for a fall)…
obama also received big bucks from AIG, did he not? rotten. to. the core.
Dear bots,
It’s fabulous that black guys are so cool, isn’t it? How do you like the historic POTUS now?
Oh, that’s right, bots don’t read this site (bots can’t read-much like congress)!
It is Obama’s fought that the distribution of the money is not being regulated—- Any third year law student could have drawn up an agreement restricting the use of the money because the companies were excepting the money from the Federal Government
I just want to give a shout-out to my Senator, Ron Wyden, for being one of two senators (along with Snowe, (R) Maine) who pushed for explicit language that would have required the AIG bonuses to be reviewed and approved.
TPM actually noticed:
http://tpmdc.talkingpointsmemo.com/2009/03/senators-to-geithner-you-could-have-backed-our-bonus-reforms.php
Please listen and sent it out. The people of America MUST KNOW THIS!!
This just in -
http://www.worldviewradio.com/play.php?EpisodeID=11125
OBAMA’S DOCUMENTED TIES
TO COERCIONIST
ORGANIZATIONS & INDIVIDUALS
From New Zealand -
Mr. Trevor Loudon, a gentleman in New Zealand, has extensively referenced and documented Obama’s ties to coercionist organizations. As Mr. Loudon explains in a recent radio interview (see link below), he is concerned about America because ultimately New Zealand’s freedom depends upon America’s freedom.
The original message describing Mr. Loudon’s sixty-nine documents regarding Obama was sent by Mr. Richard O’Leary in the following message:
A dear friend of mine in Austrailia sent me this link to a radio broadcast
about Barack Obama’s past. We need to distribute this material to every
person we know. As you will soon learn, Obama is A VERY DANGEROUS
MAN! More dangerous than anyone knows, except a few select individuals.
http://www.worldviewradio.com:80/play.php?EpisodeID=11125
It is unbelievable that Obama was able to supress this information, but he
did, with the assistance of the American press. I’ve known Obama was a
hard core coercionist, but I had no idea that he was this evil. I take almost
everything I hear about anyone with a grain of salt, but the evidence in this
matter is irrefutable.
Please listen and sent it out. The people of America MUST KNOW THIS!!
OBAMA’S DOCUMENTED TIES
TO COERCIONIST
ORGANIZATIONS & INDIVIDUALS
From New Zealand -
Mr. Trevor Loudon, a gentleman in New Zealand, has extensively referenced and documented Obama’s ties to coercionist organizations. As Mr. Loudon explains in a recent radio interview (see link below), he is concerned about America because ultimately New Zealand’s freedom depends upon America’s freedom.
The original message describing Mr. Loudon’s sixty-nine documents regarding Obama was sent by Mr. Richard O’Leary in the following message:
A dear friend of mine in Austrailia sent me this link to a radio broadcast
about Barack Obama’s past. We need to distribute this material to every
person we know. As you will soon learn, Obama is A VERY DANGEROUS
MAN! More dangerous than anyone knows, except a few select individuals.
http://www.worldviewradio.com:80/play.php?EpisodeID=11125
It is unbelievable that Obama was able to supress this information, but he
did, with the assistance of the American press. I’ve known Obama was a
hard core coercionist, but I had no idea that he was this evil. I take almost
everything I hear about anyone with a grain of salt, but the evidence in this
matter is irrefutable.
Please listen and sent it out. The people of America MUST KNOW THIS!!
Maybe even send it to senator-congress- anyone-
Rush Limbaugh defends the AIG bonuses. He doesn’t see a damn thing wrong with them. Nope. It’s just Obama and the media, stirring up the peasants. (That would be you.) Making them angry. Using AIG and its execs as a scapegoat.
Transcript:
http://mediamatters.org/items/200903180001
Online аукцион – это вид internet аукциона, при котором товар или услуга выставляется на продажу по минимальной стоимости. Участники аукционных торгов делают ставки с фиксированным шагом. Победителем интернет аукциона считается участник, сделавший последнюю ставку. Регистрация на интернет аукционе бесплатна + 500 рублей на счет!