Wednesday, March 18, 2009

AIG Stands for "ALL I Get"

As if the American public wasn't horrified enough when a huge number of AIG employees jaunted off to a posh California resort on the taxpayer dime the very weekend after they got their hands on TARP funds, they are now more horrified than ever. AIG employees got their mani/pedis and hot rock massages along with fine bottles of wine and cuisine with your dollar. AIG was the same firm that whined it couldn't meet its capitalization and payroll obligations without bailout number two and then most recently bailout number three. It cried that its employees would be on the street in days if it didn't get bailout money. All together, AIG has received a total of $170 Billion in bailout funds from the American taxpayers. I'm even more horrified by the executives dragged before Congress who assured our representative that they weren't using "taxpayer dollars" for those expenses. WHAT??? They wouldn't be in business if it weren't for "taxpayer dollars" and until and unless "taxpayer dollars" are paid back in full, there should not be another boondoggle, perquisite or bonus doled out at any of these firms that these supposed financial gurus have run into the ground. There aren't separate accounts. Are these chief executives truly so stupid or think that the American public and their Congressmen and Senators are so stupid that they are going to buy this line? Yep! After all, Americans never bothered to understand what hedge funds really were, they just trusted these same people to invest them in the ones making money in the boom market. Neither shareholders nor regulators nor Congressmen, nor Senators, nor taxpayers were asking questions in the good times, they took at face value whatever the financial gurus pedaled their way. Those days are over and the executives at AIG and other financial establishments on Wall Street have the dubious distinction of having run some of the oldest and finest financial institutions into the ground because they bilked them as their personal piggy bank for years all the while deceiving regulators, shareholders, and the American public. Congratulations! Now, are you ready to Speak Out and Speak On America?

So, now AIG declares that it has "contractual obligations" in the amount of $165 million to pay out enormous supposed "performance based" bonuses to the very personnel in the firm in the credit-default swaps department who are responsible for its ruination??? When you don't perform well, you don't get paid. What you haven't read is that this is in addition to $121 million in previously scheduled bonuses for the company's senior executives and another 6,400 employees across the organization. What's wrong with this picture? Run a firm into the ground and lose money and there is no way that you should get anything more than your salary. Before AIG employees go to bed each night, they should thank the GOD in whom we trust on our currency that pays them, along with the American taxpayer and ther future generations who provide that paycheck to them. Yet, we still hear from the bastions of AIG, "Is that All I Get?" They are so used to taking whatever they want at the expense of the firm that they just have continued it, even though the American taxpayers had to re-capitalize the firm.

Whether you are Republican or Democrat, you should be echoing the cries of House Financial Services Committee Chairman Barney Frank to put a moratorium on Wall Street bonuses period until taxpayer money is completely paid back and maybe even thereafter. In fact, Senator Christopher Dodd HAD submitted legislation that would have blocked this occurance but it was ignored at the time. Are you kidding me? Contractual obligations? Legalities? Bonuses? There would be no value whatsoever to these supposed bonus contracts with the collapse of the firm without taxpayer bailout money. No taxpayer money, no firm, no bonuses. The other issue here is that it is de riguer for employees of financial services firms to sign "employment at will" paperwork upon employment. While contracts are common in other industries, they are RARE on Wall Street. We can only hope that our representative will be smart enough to truly investigate the validity of these supposed pre-existing contracts. President Obama ordered the Treasury Department to "pursue every single legal avenue to block these bonuses," when he sensed the rage of the American voters. SOMEONE on Capital Hill or in the Treasury Department ought to be smart enough to foresee these types of shenanigans when drawing up paperwork to dispense these bailouts. The only enforcement that we've seen so far is the New York State Attorney General, Andrew Cuomo, who wants to issue subpoenas for AIG employee names, job descriptions and evaluations of employees receiving bonuses. AIG's Mr. Liddy defended these payments as contractual obligations and further added that this is what's needed to have the talented financial employees to run the business. I highly doubt it. I think some of the 10% of unemployed Americans have a whole lot more common and uncommon sense to run a business than the group that is continuing to rape and pillage AIG now. I hope that investigators continue to look at the fraud that was perpetrated on the AIG shareholders, policyholders and the American people and spare these derivative products "gurus" no mercy.

Gee, makes you wonder who controls AIG, especially in light of the fact that the majority shareholder now, with a whopping 80% of outstanding shares, is the U.S. Federal Government -ie the American people. The answer to this hoopla is found in one simple financial equation that I suggest all executives of investment banks use for 2008 year end Wall Street bonuses: nothing form nothing yields nothing...period.

Kimberly Wilcox

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