Thursday, March 19, 2009

Legislation to Return Excessive Bonuses Passed In House

Bonus Recoupment

As a result of extraordinary abuses of the public trust by companies rewarding employees with excessive compensation while receiving billions in taxpayer assistance, today the House passed legislation (HR 1586) to hold companies, including American International Group (AIG), accountable for the bonuses that were paid to their executives. After receiving more than $170 billion in taxpayer funds, AIG paid $165 million in retention payments to executives – most of whom have mismanaged their company into near bankruptcy. The top recipient received more than $6.4 million and more than 73 of these executives were paid over $1 million in retention bonuses. After receiving their retention bonuses, at least eleven recipients left the company.
Edward Liddy is the GOP Hypocrite of the Week for killing bonuses at Allstate but not at AIG
Boy, when it comes to the Wall Street Bailout/AIG scandal, just point a finger and find a hypocrite. What about all the Republican senators who were opposed to restricting bonuses and now are outraged -- we tell you -- just outraged! [...]

But the hypocrisy for Liddy, as we pointed out in a BuzzFlash Editor's Blog on March 19 is that he knew he could hold the AIG execs who helped destroy our financial system accountable -- and deny their bonuses -- without legal repercussions because he did it at Allstate, according to the Chicago Tribune.
...The agents sued. The Equal Employment Opportunity Commission sued -- twice. Liddy fought those lawsuits, and Allstate has won at every stage.

And none of the Allstate agents helped crater an economy by selling snake oil default swops and derivatives beyond what AIG could cover so that it would increase their bonuses.

Moral Decay Swirls Around Banking Bailout: Time for a Criminal Investigation
Those who stole billions in 401(k)s of innocent victims were rewarded handsomely, rarely needing to break the laws their lobbyists purchased. [...]

Instead of taking bonuses, the culprits should be taking perp walks.

I'm not just referring to the swindlers in the Financial Products Subsidiary of AIG who devised and sold those insurance policies on derivatives that brought the world economy to its knees. They do seem deserving of a special place in hell, and presumably the same divine power that according to Scripture labeled usury a high moral crime and threw the money-changers out of the temple will consider that outcome.

However, the enablers are the AIG leaders who, as New York Attorney General Andrew Cuomo revealed Tuesday, signed those bonus contracts a year ago to reward the very people "principally responsible for the firm's meltdown." That's a cool $44 million divided among the top 10 shysters, even though the depth of their chicanery was well known to top management.

As Cuomo noted in a letter to Rep. Barney Frank: "The contracts shockingly contain a provision that required most individuals' bonuses to be 100% of their 2007 bonuses. Thus, in the spring of last year, AIG chose to lock in bonuses for 2008 at 2007 levels despite obvious signs that 2008 performance would be disastrous in comparison to the year before."

The lame argument that those bonus-baby employees needed to be retained in order to sort out the mess they had created was also shot down by Cuomo, who revealed after his office's initial investigation had pierced AIG's veil of secrecy that "[e]leven of the individuals who received 'retention' bonuses of $1 million or more are no longer working at AIG, including one who received $4.6 million."

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