Complicity in AIG fiasco

[DamnYankee]

Officials Knew of AIG Bonuses Months Before Firestorm
By David Cho and Brady Dennis
Washington Post Staff Writers
Wednesday, May 13, 2009

As American International Group chief executive Edward M. Liddy returns to Washington to face Congress today, new details are emerging about how long federal officials were aware of the company's recent bonus payments to its executives and of how inflammatory the payments could be.

washingtonpost.com


Almost looks as if only those who should have known about it didn't, including us.

 

[RetiredGySgt]

Well this is a non issue. The Company made LEGALLY binding contracts that have to be honored. Which the Government full well knew. Hell they worked to ensure Congress understood the legality of the contracts and did not cause legal problems by refusing to pay them in the bail outs.

The attempt to demonize AIG was nothing short of a tactic by the Current administration to divert attention from the fact BILLIONS were going to Overseas banks. And it worked but it also back fired as now everyone knows the Government knew all along.

Now we just need the Press to be honest and point out the BILLIONS that our Government knowingly agreed to pay foreign Banks.

 

[DamnYankee]

Well this is a non issue. The Company made LEGALLY binding contracts that have to be honored. Which the Government full well knew. Hell they worked to ensure Congress understood the legality of the contracts and did not cause legal problems by refusing to pay them in the bail outs.

The attempt to demonize AIG was nothing short of a tactic by the Current administration to divert attention from the fact BILLIONS were going to Overseas banks. And it worked but it also back fired as now everyone knows the Government knew all along.

Now we just need the Press to be honest and point out the BILLIONS that our Government knowingly agreed to pay foreign Banks.

Well, aside from that, the point was, why go along with those legally binding contracts knowing what they knew? Hmmm....

 

[Zoom-boing]

Unfortunately, despite overwhelming Democratic support for limiting executive compensation, in order to save their public-private partnership bailout plan, the Obama administration worked against these limits:

As word spread Friday about the new and retroactive limit -- inserted by Democratic Sen. Christopher Dodd of Connecticut -- so did consternation on Wall Street and in the Obama administration, which opposed it.(...)

The administration is concerned the rules will prompt a wave of banks to return the government's money and forgo future assistance, undermining the aid program's effectiveness. Both Treasury Secretary Timothy Geithner and Lawrence Summers, who heads the National Economic Council, had called Sen. Dodd and asked him to reconsider, these people said.

Tim Geithner's public private partnership plan caused the AIG bonus scandal. This is because Geithner's plan needs voluntary private participation and, as many of those private investors and institutions have made clear, they won't join in if their compensation packages are threatened:

Officials at the Federal Reserve and the Treasury Department are increasingly worried that the controversy could discourage investors from joining a new government effort to revive consumer lending as well as a separate plan that relies on private money to buy toxic assets from banks, sources familiar with the matter said.(...)

A senior executive at one of the nation's largest banks said he had heard from several hedge funds that they would not partner with the government for fear that lawmakers would impose retroactive conditions on their participation, such as limits on compensation or disclosure requirements.

How Timothy Geithner's Bailout Plan Created the AIG Bonus Scandal | Corporate Accountability and WorkPlace | AlterNet