Summers: AIG Bonus Bombshell 'Outrageous'

[cal04]

http://blogs.abcnews.com/george/2009/03/summers-on-aig.html


President Barack Obama's top economics adviser Lawrence Summers said that insurance giant American International Group's plan to award senior executives hundreds of millions of dollars in bonuses and retention pay is "outrageous."

"There are a lot of terrible things that have happened in the last 18 months, but what's happened at AIG is the most outrageous," said Summers, chairman of the White House National Economic Council, during an appearance on "This Week" on Sunday.

"What that company did, the way it was not regulated, the way no one was watching, what's proved necessary, it is outrageous," Summers said.

(snip)
Summers argued today that the Obama administration has sought to limit the AIG 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," Summers said.

"What the Obama administration has done, based on the advice of attorneys, is done everything that it can to, within the law and within the tradition of upholding law that we have in this country, to limit these bonuses. And they have as a result of Secretary Geithner's efforts been scaled back," he said.

[wroberts189]

1. Just pull a bushie and ignore the law ..worked for him. nt.

[wroberts189]

2. "The government cannot just abrogate contracts"..

This smells of cow poo... any lawyers out there?

[HysteryDiagnosis]

5. No lawyer but just who in the hell sets the limits on bonus packages

for these clowns? I mean, are there any standards or do they just throw a dart at a board with some rather large numbers on it???

[wroberts189]

9. imho I would guess the biggest ars kissers. nt

[no_hypocrisy]

12. A contract can be breached if there is "frustration of purpose".

In other words, it was impossible to carry out the provisions as originally agreed upon. In this case, there weren't enough assets for AIG to survive. In that case, the bonuses would fail accordingly as the money would have to go to the corporation itself first before it went to the executives. The US Government supplied assets to the corporation, not to the executives and the money should not be applied to bonuses as it was intended for that one purpose: to save AIG. The bonuses failed long before the bailout.

[IDemo]

13. Thanks

I didn't know the legal term, but I knew contracts aren't necessarily carved in granite. Why hasn't anyone mentioned this in the media?

If the check hasn't already been given to the pirates at AIG, I would deduct the bonus amount if I were Geitner.

[no_hypocrisy]

14. More specifically:

http://en.wikipedia.org/wiki/Frustration_of_purpose

[spooky3]

20. this should be a thread of its own so we can recommend it!

[cali]

17. not a lawyer but what I've heard is that those with contracts

could and likely would sue for breach of contract. I'd actually like to see that happen.

[Amonester]

3. How many congress critters received(s) some (or a lot) of cash...

in exchange for their *crickets* sounds...

[wroberts189]

4. Whatever happened to the unitary executive theory?

Or the do whatever the fuck you want theory.


just for pubs only?

Hey ..restore the rule of law , the constitution, and the bill of rights ....and then I will believe your hands are tied.

[wroberts189]

6. Rec this for all the old people you see working min. wage jobs. nt

[exboyfil]

7. Bankruptcy voids all contracts

then judges and statutes take over. Also I got to think every contract has a malfeasance/lack of fiduciary duty clause. Killing a company seems to qualify for me. What jury is going to say differently.

[wroberts189]

10. good info ..too bad they got that "too big to fail" extortion racket going. nt

[Celebration]

29. Exactly, let's put 'em in receivership

All these zombie entities are just nuts. Put them under a government umbrella slowwwww receivership type thing just to keep the markets pretty even. You can bet these contracts would not be such a problem under that scenario.

This is all just total BS.

We have it coming to us by not insisting on this to begin with. AIG has no right to exist independently, but they are acting as if they do. Our fault!

[tularetom]

8. Nobody would mind if they just threw their asses in jail

In fact a lot of us would cheer if they lined 'em up against a wall and shot them.

[wroberts189]

11. Going by what I hear at the local shops you are spot on. nt

[NoPasaran]

21. They could raffle off places in the firing squad

Probably help the budget deficit.

[KittyWampus]

15. How is it corporations are able to break contracts with unions regarding things like pensions?

[Warren Stupidity]

23. Because the gummint demanded concessions

and the union, as they want to retain as many jobs for their members as they can, conceded. Or, alternatively, because the company went bankrupt and the courts ripped up the contracts and rewrote them.

[KittyWampus]

25. So this would reinforce the position that AIG and banks should be forced into bankruptcy

and restructured (nationalized).

[Warren Stupidity]

27. Or that the administration should demand concessions.

I'm fine with either one. And if the bonus-receiving employees of AIG choose to not make concessions, then indeed AIG should be forced into bankruptcy. That was the deal offered to UAW workers, that is the deal that should be offered to the AIG bonus takers.

[JBoy]

16. Pay the bonuses into a trust.

Once these executives return AIG to a position of profitability, with the massive government bailout repaid (with interest), then the bonuses are paid out.

Work hard, execs.

[lumberjack_jeff]

18. "Sought"? I thought we own those fuckers.

Last I heard, a 79.9% stake allows you to fire the fuckups and hire people who will dance to your tune.

[DemReadingDU]

19. Summers: We are a country of law

If that were true, we wouldn't be in this mess today.

[Warren Stupidity]

22. Oddly enough, when it comes to labor contracts for union workers

it is always possible to renegotiate, always possible to make federal loans, bailouts, whatever, conditional on union concessions, but when it comes to executive bonuses, oh fuck no, those contracts can't be touched. Actually there is nothing odd about this at all.

It's the kleptocracy, stupid.

[MrPerson]

24. File an involuntary bankruptcy

[Imagevision]

26. 'Outrageous' is the best Larry Summers can come with - that's weak!

[KittyWampus]

28. Maybe he or Geithner will pen an angry letter to the Times.

[Threedifferentones]

30. The government can't break laws

But it can pass them.

Many people say the definition of crazy is doing the same thing again and again hoping for a different result. Croks like these AIG execs have been running our country for a loooong time...and the government really expected them to act honorably? That is crazy. If those assholes cared about us or what we think of them we would not be in this mess.

Nationalize the fuckers already. Tell them that any institution which is critical for the operation of our nation's economy must act with the people's interest in mind. AIG clearly cannot, so the government must. Pass a law telling AIG to fuck off. The government is footing the bill anyway, why should AIG execs get anything?

Nationalizing should really be just a first step. After that, these greedy fuckers should be tried for treason. Perhaps not convicted, but maybe that would scare them into submission.