March 16th, 2009
04:05 PM ET
5 years ago

Congress looking for ways to recoup AIG bonuses

The House Financial Services Committee, chaired by Rep. Barney Frank, is taking a look at the bonuses being paid to AIG employees.
The House Financial Services Committee, chaired by Rep. Barney Frank, is taking a look at the bonuses being paid to AIG employees.

WASHINGTON (CNN) - Outraged House Democrats are scrambling to figure out what, if anything, they can do to recoup the $165 million in bonuses AIG awarded to employees after the company received $170 billion in federal bailout funds.

A House Democratic leadership aide and a House financial services committee aide said Congress is trying to shame AIG executives and employees into forgoing the bonuses while investigating possible legal avenues that can be used to force AIG to return the money used for bonuses.

The House financial services committee is trying to determine if Congress can force AIG to renegotiate the bonuses the company says it is legally required to give employees as dictated by contracts negotiated before it received its first infusion of bailout dollars in September, according to the committee aide.

Both aides said it is unclear what authority Congress has to force AIG to take back the bonuses. Complicating the issue is the fact that the first infusion of cash to AIG was authorized by the Federal Reserve before Congress passed the $700 billion Trouble Asset Relief Program, which included some restrictions on executive pay.

AIG CEO Edward Liddy will face intense questioning about the bonuses when he testifies Wednesday before the House Financial Services subcommittee on capital markets.


Filed under: AIG • Congress
soundoff (131 Responses)
  1. WhoCares?

    "What does "Queen Nancy" spend yearly on "her" planes ??"

    You mean the one she has to have because Bush signed it into law?

    Can I ask you a serious question?

    Do you honestly enjoy being ignorant and having no idea what you are talking about? Does it somehow make you feel better?

    March 16, 2009 05:21 pm at 5:21 pm |
  2. Sniffit

    @ Gerald, who said "Stock was up 66% today , this tells me the average American is being played like the coward fools we are."

    Hint: even the most ardent, fanatical, half-educated GOPer knows enough not to take such a ridiculous position that is so far the opposite of what he claimed the previous week. You don't get to say we're being played after saying the market falling was all Obama's fault. You can eat your crow, but you can't have it too.

    March 16, 2009 05:21 pm at 5:21 pm |
  3. no more bailouts

    when you don't have any money, HOW CAN YOU GIVE BONUSES?? they don't have any money, they have the TAXPAYERS MONEY.

    March 16, 2009 05:22 pm at 5:22 pm |
  4. Sniffit

    Public canings maybe?

    March 16, 2009 05:22 pm at 5:22 pm |
  5. Machiavelli, Baton Rouge, LA

    Many people may not like Barney Franks, but one has to admire his determination to root out graft and insatiable greed on Wall Street. No other politician, in modern times, has gone after these baffoons with the tenacity of Barney Franks; however, Franks is very ecentric and talks a mile a minute, but the man know what he is talking about.

    March 16, 2009 05:24 pm at 5:24 pm |
  6. GEITHNER

    Geithner should be partly resposible since he was president of the New York Federal Reserve when all of this mess happened. He helped set up the conditions (or lack thereof) with Paulson. He should be held accountable for his part.

    March 16, 2009 05:24 pm at 5:24 pm |
  7. greg

    As always the uneducated liberal's are talking out of the hole that is way south of the brian. have you idiot's ever heard of contract law. quite listen to gibbs carveil and all of the other idiot and understand this the liberal stimlus plan will do more harm than good please get an education.

    March 16, 2009 05:27 pm at 5:27 pm |
  8. b

    Kshama,

    First, I would say you have to learn how to read the plans that they put forth. To say that they don’t have a plan is overly caricaturing and simplifying matters. In all fairness, they have an idea and are working out the details. I don’t think it is to be expected that you would have a detailed plan within weeks without knowing to a certain extent how it affect other areas. Everyone has an idea of what it would take to fix the economy. Even Welch would admit that when he took over GE it took 2 years to get things moving in the right direction. If you read the how Welch turned around the company, many were questioning him also. I don’t believe people were asleep, maybe you were but during the campaign most of the things he talked about made sense. I’m sure you would admit that no one knows how to get us out of this mess. Not in the US and the rest of the countries, otherwise we would be doing it already. It’s easy for us to criticize but the fact is even economist cannot agree on what to do. We all have our opinions…. For the record Warren Buffet and Jack Welch have been critical of the lack of details not the plan in itself.

    March 16, 2009 05:28 pm at 5:28 pm |
  9. Sue

    HOW ABOUT JUST SAY NO"and then if AIG chooses – - let them sue!!!! After all , mR. oBAMA, JACKAL THAT HE WAS, DIDN'T EVEN READ aig'S CONTRACTS TO NEGATE THE SO CALLED "BONUSES" So, LET mR. oBAMA PAY FOR NOT DOING HIS HOMEWORK!!!! Bring on the AIG lawsuits!!!

    March 16, 2009 05:29 pm at 5:29 pm |
  10. Jesse, TX

    If they hadn't given the thieves the money in the first place, they wouldn't have to recoup anything. What morons. Surprise, surprise AIG stole the money.

    March 16, 2009 05:30 pm at 5:30 pm |
  11. toni

    Im sorry what is bonus?

    March 16, 2009 05:30 pm at 5:30 pm |
  12. Jesse, TX

    Hey, you're the government, tax the hell out of the AIG thieves. Raise their taxes 510%. We'll get our money back in no time.

    March 16, 2009 05:31 pm at 5:31 pm |
  13. Jeanne

    This is a distraction. Follow the $170 billion! How many billions (more than 1/2) went to foreign entities? They obviously didn't vet AIG properly or they would have known this. Another example of government incompetance.

    March 16, 2009 05:33 pm at 5:33 pm |
  14. strong

    Who the he// cares anymore?!

    Everything is out of control, the decadence is beyond belief. What can the average citizen do about any of this? Nothing!

    March 16, 2009 05:33 pm at 5:33 pm |
  15. Sue

    SOCK IT TO THEM!!!! and then, punish Mr. Obama for committing this crime of NOT EVEN KNOWING what he did while not even reading AIGS's contracts with their gifting processes!!!!!

    March 16, 2009 05:33 pm at 5:33 pm |
  16. Pat F

    Hey Barney – How about getting Franklin Raines' bonuses back? He, with your able help, actually destroyed the economy!

    March 16, 2009 05:34 pm at 5:34 pm |
  17. tennisguypitt

    I can't believe I'm saying this...

    let them fail. They're not getting this.

    March 16, 2009 05:36 pm at 5:36 pm |
  18. Dutch/Bad Newz, VA

    80% of the company is ours. Take the money back and tell them to kiss the taxpayer's butt. These AIG guys are taking the people's kindness for weakness. If AIG weren't so vital to the financial system, I will let them fall lat on their faces.

    March 16, 2009 05:36 pm at 5:36 pm |
  19. Tom Fleming

    Let me get this straight. Everyone at GM was forced to take a haircut but everyone at AIG was forced to take a bonus. Its a wonderful life.

    March 16, 2009 05:38 pm at 5:38 pm |
  20. Jetjocky

    Contracts: At least 3 times during my career the company I worked for suffered economic trouble teetering on bankruptcy. As responsible employees, we voted to take pay concessions to shore up the company. It worked and we were rewarded with company stock.

    When I retired, my "contract" with the company specified paid medical coverage until I was 65y/o However, they had to file bankruptcy causing retirees to absorb 50% responsibility of this medical insurance...I had no vote on this decision!

    AIG's employees should be offered a vote on opportunity to do the "right thing" and failing to see the significance of their decision the contract should be abrogated! The people of the US cannot allow this kind of reward for mismanagement!

    They won't leave their jobs! Where in this economy will a foolish money manager find a new job?

    March 16, 2009 05:38 pm at 5:38 pm |
  21. Jackie in Dallas

    Did you notice in the previous story posted on this topic that a lot of the people awarded these bonuses were contractors? I thought that particularly low.

    A contract is a contract, some would say - and I'd agree to a point. A contract usually has a clause about non-performance, though, or failure to meet expectations or stated goals. I think driving your company to the verge of bankruptcy and making billions of dollars in bad decisions would definitely fall under non-performance!

    I've been a contractor for nearly 15 years until just recently, and EVERY contract I've signed has such a clause. If AIG didn't have it in their contracts, then they need to sue their legal representation for malfeasance!

    March 16, 2009 05:38 pm at 5:38 pm |
  22. KATHLEEN

    C-Span program with Senator Bill Nelson-Florida said today
    that AIG sent or transferred the rest of the BILLIONS of Dollars
    Overseas!!!!

    Then, just what part of AIG does America or the American taxpayers
    own? Would it be the building with the mortgage on it!!!!!!!!!!!!! That
    equals nothing! Zero! We have been dupped!

    March 16, 2009 05:38 pm at 5:38 pm |
  23. KATHLEEN

    To anthony s.

    The money is gone. all of it. It is a "pipedream" of Americans to think
    it will be ever "recovered." It Will not!

    March 16, 2009 05:42 pm at 5:42 pm |
  24. Jim

    When you have the likes of Barney and Chris doing the looking, you are in for a big disappointment. These two are as crooked as the AIG heads.

    March 16, 2009 05:44 pm at 5:44 pm |
  25. Clark L

    AIG rewards failure, with taxpayers money. We as taxpayer need to continue this public outrage, or else GM and the rest who got bail out money will do the same.

    March 16, 2009 05:45 pm at 5:45 pm |
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