Last Friday, AIG paid out about $165 million in bonus checks to employees who worked in the troubled AIG Financial Products unit. The bonuses were part of a larger package, some $450 million due to these employees in 2008-2009.
New York state Attorney General Andrew Cuomo on Tuesday said that 73 employees got more than $1 million each, including 11 people who don't even work for AIG anymore.President Obama says he wants to try to get the bonus money back. Turns out, it can't be done so easily.
Treasury chief Tim Geithner says he found out about the bonuses last week, although AIG revealed in regulatory filings last year that it was giving such bonuses. The contracts had been set up months before the government became a nearly 80%owner in the company. Treasury's lawyers said it would be legally difficult to block the bonuses.
The best Treasury said it could do right now is to ensure that the public coffers get reimbursed for all the bonuses on top of all the other money AIG owes. Treasury says it will add a reimbursement provision to latest deal to pump another $30 billion into AIG.
In the meantime, Congress is itching to get involved. Senate Democrats are talking about legislation to tax the heck out of the bonuses. Two key senators on Tuesday said they would try to impose a big tax on retention bonuses paid to executives of companies that received bailout money or in which the United States has an equity interest.
read the CNN article
My thoughts: The entire system and idea of bailouts in corrupt. Instead of focusing the wisdom and constitutionality of government interventionism, the media is focused a tiny group of people. The AIG bonuses are less than 1% of the money given to AIG. The money given to AIG is less than 1% of the bailout costs. So a victory may be achieved in a minor battle, while the war is being totally lost.
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