AIG Bonus Mess Getting Bigger

The A.I.G bonus mess is getting bigger by the day.

Mr. Tim Geithner, the Treasury secretary, insisted that he didn’t know about these bonuses until March 10, days before the payments. But New York Times reported today that in a public hearing, on March 3,  he was asked – loud and clear – what he would do about AIG’s upcoming $165 million bonuses. So now his staff are saying that yes, Mr. Geithner did hear about the bonuses, but he didn’t know the “full extent” of the bonus programs back then.

Senator Chris Dodd flip-flopped in a more obvious fashion. After denying having anything to do with the language in the stimulus bill that allowed AIG bonuses to be paid, he is now saying that he was pressured by the administration to add that clause. Just to be fair, though, we should still give him credit for crafting the measure to curb executive pay in the first place.

Senator Charles Grassley suggested on Monday that AIG executives should do one of two things: “resign or go commit suicide,” even though he later backtracked a little from this strong statement.

Mr. Edward Liddy, current CEO of AIG, testified before angry lawmakers on March 18 that he’d ask employees receiving big bonuses to give some back.

Congress, on the other hand, didn’t have that patience and swiftly passed a bill Thursday that would impose a 90 percent tax on bonuses given to employees with family incomes above $250,000 at AIG and other companies that have received at least $5 billion in government bailout money.

New York Attorney General Andrew Cuomo and Connecticut Attorney General Richard Blumenthal have both requested further information from AIG, including employee names, bonus amounts and contract details, and may start formal investigation into potential fraud.

Obviously there will be more to come.

Leave a Reply

Your email address will not be published. Required fields are marked *