Page 2 of 2 FirstFirst 12
Results 16 to 22 of 22

Thread: Prepare for populist backlash: AIG hands out millions in bonuses to epic fail bosses

  1. #16
    Elite Member
    Join Date
    Apr 2008
    Posts
    2,540

    Default

    There are two young girls (12 and 14) who ride at my barn. 2 years ago their father, who was a big muckety muck at AIG, got passed over for promotion. He left and cashed out his golden handcuffs and stock options. $650Million. I kid you not. AIG has been throwing around these big numbers forever. It's like they think they havey a dollar printing press in the basement.

    Needless to say, each of those girls has several horses, each of them a minimum of $500,000.

  2. #17
    Elite Member B.C.'s Avatar
    Join Date
    Oct 2005
    Location
    Motor City
    Posts
    2,275

    Default

    Quote Originally Posted by Fluffy View Post
    Monday March 16, 2009 08:59 EDT
    The sanctity of AIG's contracts






    Larry Summers, Sunday, on AIG’s payment of executive bonuses:
    We are a country of law. There are contracts. The government cannot just abrogate contracts. Every legal step possible to limit those bonuses is being taken by Secretary Geithner and by the Federal Reserve system.

    Associated Press, February 18, 2009:
    The United Auto Workers’ deal with Detroit’s three automakers limits overtime, changes work rules, cuts lump-sum cash bonuses and gets rid of cost-of-living pay raises to help reduce the companies’ labor costs, people briefed on the agreement said today.
    The UAW announced Tuesday that it reached the tentative agreement with General Motors Corp., Chrysler LLC and Ford Motor Co. over contract concessions, as GM and Chrysler sent plans to the Treasury Department asking for a total of $39 billion in government financing to help them survive.
    Concessions with the union are a condition of the $17.4 billion in government loans that the automakers have received so far.
    Apparently, the supreme sanctity of employment contracts applies only to some types of employees but not others. Either way, the Obama administration’s claim that nothing could be done about the AIG bonuses because AIG has solid, sacred contractual commitments to pay them is, for so many reasons, absurd on its face.

    As any lawyer knows, there are few things more common – or easier -- than finding legal arguments that call into question the meaning and validity of contracts. Every day, commercial courts are filled with litigations between parties to seemingly clear-cut agreements. Particularly in circumstances as extreme as these, there are a litany of arguments and legal strategies that any lawyer would immediately recognize to bestow AIG with leverage either to be able to avoid these sleazy payments or force substantial concessions.

    Since the contracts are secret and we’re apparently just supposed to rely on the claims of AIG and Treasury Department lawyers, it’s impossible to identify these arguments specifically. But there are almost certainly viable claims to be asserted that the contracts were induced via fraud or that the bonus-demanding executives themselves violated their contracts. Independently, it’s inconceivable that there aren’t substantial counterclaims that AIG could assert against any executives suing to obtain these bonuses, a threat which, by itself, provides substantial leverage to compel meaningful concessions. Many of these executives were, after all, the very ones responsible for the cataclysmic losses.

    The only way a company like AIG throws up its hands from the start and announces that there is simply nothing to be done is if they are eager to make these payments. One might expect AIG to do so -- they haven't exactly proven themselves to be paragons of business ethics -- but the fact that Obama officials are also insisting that nothing can be done (even while symbolically and pointlessly pretending to join in the populist outrage over these publicly-funded "retention payments") is what is most notable here.

    Legal strategies aside, just as a business matter, one of the first steps taken by every company in severe distress is go to its creditors, explain that it cannot make the required payments, and force re-negotiations of the terms. That’s as basic as it gets. To see how that works, just look at what GM and other automakers did with their union contracts – what they were forced by the Government to do as a condition for their bailout. Obviously, if a company goes into bankruptcy, then contracts to pay executive bonuses are immediately nullified, but the threat of bankruptcy or serious financial distress is, for obvious reasons, very compelling leverage to force substantial concessions. And the idea that, in this economy, AIG executives (of all people) will be able simply to leave and go seek employment elsewhere unless they receive their "retention bonuses" (even assuming that’s an undesirable outcome) is nothing short of ludicrous.

    There may be other reasons why the Treasury Department decided it wanted AIG to pay these bonuses (Marcy Wheeler considers some of those reasons here), but this claim from Larry Summers that the sanctity of contracts precludes any alternatives is not just false, but insultingly so. It's difficult to recall anything quite so vile as watching hundreds of millions of dollars in taxpayer money flow to AIG executives. One would expect the Obama administration to do everything possible to prevent that from happening. Instead, they seem to be doing the opposite.

    The sanctity of AIG's contracts - Glenn Greenwald - Salon.com
    First thing I thought Fluffy, the UAW and the concessions that were demanded of them and ratified by the membership.
    Last edited by B.C.; March 20th, 2009 at 02:12 AM.

  3. #18
    Elite Member Penny Lane's Avatar
    Join Date
    Nov 2005
    Location
    Over the hills and far away
    Posts
    21,646

    Default

    [youtube]http://www.youtube.com/watch?v=o8DKfQME2o0[/youtube]

  4. #19
    Elite Member Grimmlok's Avatar
    Join Date
    Oct 2005
    Location
    In WhoreLand fucking your MOM
    Posts
    55,359

    Default

    if he was angry enough he'd fire the shit out of Geitner and Dodd.. Geitner will fall on his sword by the end of this and tender his resignation, just watch.

    He already admitted to giving Dodd an ammendment to the bill which would allow the bonuses to be protected.

    He apparently accepts full responsibility.

    He'll be spending more time with his family soon. Not even 2 months in and the first scandal.

    Failbama.
    I am from the American CIA and I have a radio in my head. I am going to kill you.

  5. #20
    Elite Member Fluffy's Avatar
    Join Date
    Nov 2007
    Posts
    5,600

    Default

    He doesn't have the authority to fire Dodd.

  6. #21
    Elite Member Grimmlok's Avatar
    Join Date
    Oct 2005
    Location
    In WhoreLand fucking your MOM
    Posts
    55,359

    Default

    i'll settle for geitner
    I am from the American CIA and I have a radio in my head. I am going to kill you.

  7. #22
    Elite Member suede's Avatar
    Join Date
    Oct 2005
    Posts
    4,580

    Default

    Quote Originally Posted by betagrl View Post
    I was wondering the same thing. Of course the Republicans whine about unions all the time, yet they could care less if a bunch of overpaid paper-pushers make obscene amounts of money on the taxpayers dime??

    BTW, I think the AIG plan was crafted under Paulson/Bush. What a shock, huh?!
    AIG executives gave more than $630,000 during the 2008 political cycle even as the company was falling apart
    According to the Center for Responsive Politics, which tracks campaign finance reports, more than $120,000 of that money was donated after AIG received its first $85 billion in federal bailout funds in September. The company has since received a total of $170 billion in taxpayer cash to prevent its collapse.
    Their generosity included more than $23,000 to Obama's campaign.

    ABC News: Will Obama, McCain, Dodd Return Contributions From AIG Employees?

    Life sure is twisted.
    He who knows does not speak.
    He who speaks does not know.
    Lao-tzu

Page 2 of 2 FirstFirst 12

Thread Information

Users Browsing this Thread

There are currently 1 users browsing this thread. (0 members and 1 guests)

Similar Threads

  1. John Thain subpoenaed over Merrill Lynch bonuses
    By WhoAmI in forum U.S. Politics and Issues
    Replies: 2
    Last Post: January 27th, 2009, 10:30 PM
  2. Goldman Sachs using taxpayer money to fund bonuses
    By celeb_2006 in forum U.S. Politics and Issues
    Replies: 0
    Last Post: December 18th, 2008, 12:46 PM
  3. Replies: 0
    Last Post: December 3rd, 2008, 03:13 PM
  4. Replies: 6
    Last Post: December 1st, 2008, 12:29 PM
  5. Replies: 2
    Last Post: November 17th, 2008, 07:46 PM

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •