AIG, Part Deux ... the Government Knew All Along

The President passed the buck to Dodd who now passes it to Bernanke.

How about SECTREAS Geithner’s claim he is going to make AIG pay back the bonuses to the government—not the bonus recipients? AIG is 80% owned by the government, which will be paying itself. A total joke.

What about the foreign recipients of this money? AIG does have foreign interests, or should i say the US government has foreign interests (partners/banks/employees) with an 80% stake in the company.

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Big AIG bonuses got nod from Fed
DC Examiner  |http://www.dcexaminer.com/politics/41439607.html

March 19, 2009 | Susan Ferrechio


American International Group’s unpaid CEO Edward Liddy said the company’s board has been in close consultation with the Federal Reserve since November about whether to hand out the $165 million in bonuses it issued to its top employees last week.

The disclosure took Capital Markets subcommittee chairman, Rep. Paul Kanjorski, D-Pa., by surprise and he asked Liddy to clarify his statement.

Since the bonuses were disclosed last week, the Obama administration has said they found out about the payments just before they were handed out by AIG, which is the recipient of $170 billion in government funds and is slated to receive $30 billion more soon.

“Am I to understand you’re saying that Chairman Bernanke or his designated person at the Federal Reserve was informed that you were going to make these payments and acquiesced in that decision?” A puzzled-looking Kanjorski said.

“Yes,” Liddy assured him. “Everything we do, we do in the partnership with the Federal Reserve. The Federal Reserve is at our board meetings, at our compensation committee meetings, at our various meetings on strategy. And they have the ability to weigh in either yea or nay on anything that we decide.”

Liddy told a panel of angry House lawmakers that the AIG board agonized over the bonuses and with the help of the Fed, came to the conclusion that they should pay the money rather than risk losing employees who are managing complicated portfolios that could implode if they quit.

“There was great angst over the payments of these bonuses on all of our part and the judgment we made was that the risk was too great that we would lose all the progress that we made if we didn’t pay these bonuses,” Liddy said.

Rep. Mike Castle, R-Del., who has been critical of Geithner’s involvement in the bonus controversy, asked Liddy to submit in writing a list of the meetings about the bonuses and who was present.

The company works with the Federal Reserve Bank of New York, which was headed by Geithner before he took the helm at Treasury in January.

Liddy said he did not know if Geithner was involved in any of the meetings about the bonuses.

“We do not know a single thing of strategic importance without talking to the Federal Reserve,” Liddy said. “What we have assumed is that our discussions with the Federal Reserve were being properly communicated with others.”

Liddy also disclosed that the company has asked the recipients of the bonuses greater than $100,000 to return half the money and said some employees have already agreed to hand back all of it.

“We’ve heard the American people loudly and clearly these past few days,” Liddy said. “Accordingly, this morning, I've asked the employees of AIG Financial Products to step up and do the right thing.”

President Barack Obama was asked Wednesday morning whether he wished he knew about the bonuses earlier.

“Rather than going into the details finding out, ultimately I'm responsible, I’m president of the United States,” Obama said.

Obama said the more important issue how the government can install “regulatory mechanisms” to ensure the government does not have to bail out companies in the future.

“That requires some regulatory framework,” he said. “All we are trying to say is, you have to be accountable to somebody.”

Josie06 Josie06
56-60, F
17 Responses Mar 19, 2009

THANK YOU!!!!!!! Never know, maybe God will pull me out of this house and take me to Heaven, LOL, thats my ultimate home screw this GOVERNMENT BULL$HIT!!!

Neveah, i'll keep you and your family in my prayers. i realize that doesn't help your immediate situation though.

YEP, we were told they have to go by the OLD LAWS.<br />
Because we had applied ten times over and approved.<br />
BUT, they had a big meeting and decide NOPE, we go by NEW LAWS ONLY even though there is a clause that says they have to go by old laws.<br />
HMMMMMMMMMMMMMMMMM<br />
Sucks to be an American Citizen livin on the streets with 4 kids......<br />
Well lets hope not, anyway.

There is no BAILOUT for the American Citizen. <br />
<br />
Only political friends.

Ex Post Facto (retroactive laws) is illegal ... but no one is calling them on it.

singer1960 ... they all 'cook the books'.<br />
<br />
Even your beloved Congress!

BTW, there is well over $100,000 invested already. <br />
Facing losing it all. And I hear about this AIG bailout crap.

But how can they change these laws in the middle of a gov. home loan, build a house............<br />
go to close and say SORRY YOUR LOAN IS NO GOOD.<br />
????????????????????????????????????????????<br />
This is rediculous, because we were told we would close within two weeks then all the sudden "laws changed".<br />
THIS IS NOT FAIR.

But do you really that in 2008 they earned the money?????? I mean it did not just happen over night.....They were cookinbg the books for a long time......Get real...>They did not earn the money.......Whet is that they do to earn multi-million bonuses.....Get with the real picture here....

Yes Neveah, the fix is in. Congress and apparently the Administration though it wouldn't come up.

I'm PO'D everytime I think about it.<br />
Here we just built a house, and CAN'T CLOSE ON OUR LOAN..........<br />
Hope all at AIG are enjoying their bonuses while we will be living on the street.<br />
O ya, not to mention my $40,000 in cash invested.<br />
Its ok, as long as AIG get their bonuses.

This outrage appears to be a little late. And especially so since the original bill appears to have a clause to authorize the bonuses.<br />
<br />
Additional to outlaw them after the fact, to me, violates the US Constitution.<br />
<br />
Congress: try reading the Constitution, sometime:<br />
<br />
Article 1 Section 9: No Bill of Attainder or ex post facto Law shall be passed.<br />
<br />
Article 1 Section 10: No State shall enter into any Treaty, Alliance, or Confederation; grant Letters of Marque and Reprisal; coin Money; emit Bills of Credit; make any Thing but gold and silver Coin a Tender in Payment of Debts; pass any Bill of Attainder, ex post facto Law, or Law impairing the Obligation of Contracts, or grant any Title of Nobility.<br />
<br />
Clear enough? The contracts were there, and the pay was based on 2008 performance. <br />
<br />
~~~~~~~~~~~~~~~~~<br />
So where is the outrage:<br />
<br />
The $5 Billion “bonus” to ACORN ... that was OK<br />
<br />
The bonuses paid to Fannie/Freddie execs ... that was OK.<br />
<br />
<br />
Congress is not acting in the best interest of the citizens!

GOP amnesia? Everyone in DC get amnesia, Republican and Democrat alike. Politicians have this gene em<x>bedded in them in an effort to confuse their constituency and get reelected!<br />
<br />
Barney Frank is not a source to quote on anything. His boyfriend ran a prostitution ring out of their DC home. His former boyfriend made millions in pay and bonuses from Fannie Mae. He himself said in 2005, when Republicans warned of this very problem, that all was okay (online.wsj.com/article/SB122091796187012529.html).<br />
<br />
Barney Frank is not a good source to quote on any subject. H*ll, most Senators and Representatives and Administration personnel are not good sources to quote. <br />
<br />
By the way, Dodd and Frank are Dems.

I find the GOP tendency to amnesia a little disturbing.. <br />
But I'll let Barney Frank tell it like it is<br />
<br />
<br />
Barney Frank...<br />
<br />
Memory eventually fails us all, but apparently the decline strikes one party far more than the other.<br />
<br />
In recent weeks, my friends across the aisle have expended a lot of breath proclaiming that the Democrats caused the present financial crisis by failing to pass legislation to regulate financial services companies in the years 1995 through 2006.<br />
<br />
There is only small one problem with this story -- throughout this entire period the Republicans were in complete charge of the House and for the most critical years they controlled the House, the Senate, and the Presidency.<br />
<br />
In the House of Representatives, the majority party has almost unlimited power over the minority party. The majority party owns the committee chairmanships; it controls what bills come to a vote; and it is under no obligation to consider the ideas of the beleaguered minority. When the Republicans were in the majority they ruled with an iron first; it is no accident that Tom DeLay was known as "The Hammer."<br />
<br />
That is why I find it particularly flattering the Republicans now claim that in the years 1995 to 2006 I personally possessed supernatural powers which enabled me to force mighty Republican leaders to do my bidding. Choose your comic book hero -- I was all of them.<br />
<br />
I wish I had the power to force the Republican leadership to do my bidding! If I had had that power, I would have used it to block the impeachment of Bill Clinton, to stop the war in Iraq, to prevent large tax cuts for the extremely wealthy, and to stop government intervention into the private life of Terri Schiavo. Yet that power eluded me, and I was unable to stop those things.<br />
<br />
According to the Republicans' misty memories of the period before 2007, I allegedly singlehandedly blocked their determined efforts to regulate Fannie Mae and Freddie Mac, and my supposed intransigence literally caused the worldwide financial crisis.<br />
<br />
Fortunately, we have tools to aid memory -- pencil and paper, word processing, transcripts, newspapers, and the Congressional record. And as described in the most reputable published sources, in 2005 I in fact worked together with my Republican colleague Michael Oxley, then Chairman of the Financial Services Committee, to write a bill to increase regulation of Fannie Mae and Freddie Mac. We passed the bill out of committee with an overwhelming majority -- every Democrat voted in favor of the legislation. However, on the House floor the Republican leadership added a poison pill amendment, which would have prevented non-profit institutions with religious affiliations from receiving funds. I voted against the legislation in protest, though I continued to work with Mr. Oxley to encourage the Senate to pass a good bill. But these efforts were defeated because President Bush blocked further consideration of the legislation. In the words of Mr. Oxley, no flaming liberal, the Bush administration gave his efforts 'the one-finger salute.'<br />
<br />
The Republicans can claim some supposed successes despite my awesome power. In 1999 they passed the Gramm-Leach-Bliley Act, which overturned a Depression-era law preventing commercial banks from acting like investment banks. In 2000, they passed another bill which loosened regulation of derivative markets. I voted against these bills -- but to no avail.<br />
<br />
Under Republican President George W. Bush, many federal agencies turned a blind eye to activities which would later precipitate the global financial meltdown. The Securities and Exchange Commission decided to allow the nation's largest financial institutions to "self-regulate;" the Federal Reserve under Alan Greenspan declined to use its power to regulate subprime mortgages; the Comptroller of the Currency decided to preempt state consumer laws on subprime mortgages.<br />
<br />
Meanwhile, President Bush himself demanded that Fannie and Freddie increase the percentage of subprime loans they purchased, supposedly because of his belief in an "ownership society." Incidentally, increased lending to subprime borrowers would also fuel astronomical profits by the financial services industry. I publicly opposed giving mortgages to unqualified borrowers because I believed that some families are better off renting.<br />
<br />
Yet somehow none of this was recorded in the Republican collective memory.<br />
<br />
Forgotten too is the significant progress that was made after the 2006 elections, when the Republicans in Congress were repudiated by American voters.<br />
<br />
Ironically, this is the period in which I and my Democratic colleagues actually did possess the magical power needed to make real change in Washington -- we became the majority party. In March 2007, just two months after I became the Chairman of the Financial Services Committee for the first time, I moved quickly to forge a bill which would regulate Fannie Mae and Freddie Mac. The bill passed the House in May, with all 223 Democrats voting for it, and 103 Republicans voting against it. President Bush later signed that legislation into law.<br />
<br />
Later in 2007, I introduced legislation to restrict subprime mortgages. The bill passed the Financial Services Committee and the House, but it did not pass the Senate, where because of the filibuster rule, the Republican minority actually does have the power to hobble the majority. The bill passed the full House with all 227 Democrats and 64 Republicans voting for it, and 127 Republicans voting against.<br />
<br />
Ironically, those Republicans who now attack me most viciously and whose memories are the most impaired were among those who voted against both bills.<br />
<br />
Republicans also forget -- or do not understand -- that the present financial crisis has many fathers. The failure to pass any meaningful legislation before 2007 allowed unscrupulous actors to gorge themselves at the public's expense. Unregulated mortgage brokers sold subprime loans including the now infamous NINA (No Income No Assets). Major financial institutions packaged bad mortgages into securities and sold them as low-risk investments. Rating agencies gave stellar grades to toxic assets while being paid by the companies who stood to benefit from their actions. Insurance companies like AIG issued Credit Default Swaps which magically turned toxic assets into gold.<br />
<br />
The executives of some of those institutions now seek bonuses for their fine work. Perhaps my Republican colleagues should ask for bonuses too.<br />
<br />
The true tragedy is that this is more than a game. Millions of Americans are now unemployed and millions of others have lost their homes. Well-run businesses have been shaken to their foundations, and the stock market has taken a plunge not seen since the Great Depression. Many people facing retirement have found their savings have been cut in half.<br />
<br />
They say that those who forget history are doomed to repeat it. But the collective amnesia of the Republican Party will not only hurt its members -- it threatens to hurt all of us. Is there a cure for amnesia? We can only hope.

Is it the cover-up or the facts coming out now?

How AIG Became Too Big to Fail<br />
Time | 3/19/09 | BILL SAPORITO<br />
<br />
Posted on Thursday, March 19, 2009 <br />
<br />
Treasury Secretary Tim Geithner had every reason to think he had seen all of AIG's dirty laundry. The government owned 80% of the company, and Geithner had just orchestrated AIG's most recent handout-its fourth, if you are keeping score, for $30 billion on March 2-to prevent the teetering insurance giant from going over the cliff and taking the rest of the global financial system with it. AIG had already cost the taxpayers some $170 billion, mostly to repair the damage done by one of its units, AIG Financial Products (AIG FP), which last year alone piled up $40 billion in losses related to its dealings in complex mortgage bond derivatives.<br />
<br />
(Excerpt) Read more at time.com ... http://www.time.com/time/business/article/0,8599,1886275,00.html

Dodd: Administration pushed for language protecting bonuses <br><br />
<br><br />
CNN at http://www.cnn.com/2009/POLITICS/03/18/aig.bonuses.congress/index.html?eref=rss_politics&iref=polticker<br><br />
<br><br />
3-18-09 | Ed Hornick Kristi Keck <br><br />
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How about the billions of taxpayer money that went to English, German, and French banks?<br><br />
<br><br />
<br><br />
Somewhere it was missed. So much for the promises of transparency and accountability.