March 16th, 2009
10:12 AM ET
5 years ago

Congress to grill AIG executive

Liddy will be in the  hot seat on Capitol Hill later this week.
Liddy will be in the hot seat on Capitol Hill later this week.

WASHINGTON (CNNMoney.com) – Lawmakers outraged about the bailout of American International Group will get another forum Wednesday, when the company's CEO is set to go before a House panel probing the government's involvement in the embattled insurer.

Edward Liddy, the AIG chief executive, is sure to be grilled about $160 million in bonuses paid to senior employees last week.

AIG has received three bailout packages, totaling more than $170 billion, in large part because it had issued risky credit default swaps - a kind of insurance for bad loans made by banks and investment companies.

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Filed under: AIG • Congress
soundoff (100 Responses)
  1. ran

    If AIG continues with this bonus plan then nationalize AIG; then fire all involved and bring in people who want a job and will not seek a bonus until the company show improvement. Also, why was bailout money given to banks overseas?

    March 16, 2009 11:56 am at 11:56 am |
  2. fearful for my country

    Well, I can attest to the fact that they haven't been paying their claims. If you have AIG, you need to change ins companies.

    March 16, 2009 12:03 pm at 12:03 pm |
  3. Joann

    I thought you got a bonus for doing a good job and its taken from the profits of the company. How can anybody get a bonus when the company is failing and in need of a bailout????

    March 16, 2009 12:10 pm at 12:10 pm |
  4. Chas in Iowa

    I feel the excuse that to keep valuable employees the bonuses are necessary.
    In my book if your company is bleeding value profusely you are not doing a very good job and deserve no bonus.
    If you don't like it go loose money for a different company.

    March 16, 2009 12:11 pm at 12:11 pm |
  5. just today

    the taxpayers own 80% of aig, its time for our voice to be counted, no more bailouts for these companies that could care less for the American taxpayer.

    March 16, 2009 12:17 pm at 12:17 pm |
  6. Thomas, Missoula, MT

    Let them crash and burn! Let the auto makers go down the tubes also. The leadership of both has demonstrated no concern for the average person. They are so far out of touch with our reality that the only way they'll ever get it is when they're standing in the unemployment line with the rest of us. I'm no financial genius, can someone tell me why it's ok that AIG gave part of their bailout to foreign banks (Societe Generale and Deutsche Bank, which received $4.1 billion and $2.6 billion, respectively [http://www.cnn.com/2009/US/03/15/AIG.banks.list/index.html])?

    March 16, 2009 12:17 pm at 12:17 pm |
  7. Scott

    If AIG and it's executives had any common sense and backbones they would turndown the bonuses. Now the Feds have the opportunity to rewrite the employment contracts since the Feds (and we taxpayers) are the bosses at AIG.

    March 16, 2009 12:18 pm at 12:18 pm |
  8. Ron

    The sad thing is in a month or two when AIG comes begging Congress for more of the tax payer dollars, Congress will hand it over to them, no questions asked.

    March 16, 2009 12:19 pm at 12:19 pm |
  9. Lilarose in Oregon

    Please remember that this is a democracy with LAWS.

    I hope to heck we the people can recoup all of this bonus money, but we have to do it legally. Let the legality work itself out, even if it is frustrating.

    Obama and his team can't just say "return the money." Just doesn't work that way.

    They are furious about this also.

    What irritates me the most is that when the monies were given to AIG, that scenarios such as this were not ruled out at the time. No elimination of bonuses, no money.

    March 16, 2009 12:19 pm at 12:19 pm |
  10. Ariel

    It is MY money as a tax payer and I want it BACK.

    March 16, 2009 12:20 pm at 12:20 pm |
  11. no more bailouts

    most of these people need to be fired, the rest need to take a cut in their salaries, NONE of them deserve a bonus, the taxpayers own 80% of aig, its time they listen to what the people want, no more bonuses, no more bailouts.

    March 16, 2009 12:25 pm at 12:25 pm |
  12. Jim B

    Although I disagree with AIG paying bonuses, the bigger issues here are the credit default swaps. There are trillions of dollars tied up in these things. That's right TRILLIONS AND TRILLIONS!!!!

    Credit default swaps are comlex, and due to the complexity have been kept from the general public – I believe. I would invite CNN to run a story defining a credit default swap. I think you'd be amazed and outraged at the risk and the amount of money we're talking about.

    Bonuses are pocket change compared to these things.

    March 16, 2009 12:30 pm at 12:30 pm |
  13. eds

    Time to renegotiate the contracts! If they don't like it, let them leave, they have hardly done a brilliant job running the company! Ridiculous is an understatement.
    The CEO was saying he was afraid to lose the best and most brilliant minds?!?!? What brilliance does it take to make HORRIBLE, frankly fraudulent choices? He'd be better off starting from scratch from the unemployment roles and letting some smart, honest people have a crack at running the company right.
    NO MORE BONUSES! I want my tax dollars BACK! I am honest and smart, work for a company who is not on a bailout track, and wouldn't expect a bonus in these times!!!
    If these people were really OK, they'd either refuse the bonuses or give them 100% to charity.

    March 16, 2009 12:42 pm at 12:42 pm |
  14. eds

    Where did my comment go CNN??
    Time to renegotiate the contracts! If they don't like it, let them leave, they have hardly done a brilliant job running the company! Ridiculous is an understatement.
    The CEO was saying he was afraid to lose the best and most brilliant minds?!?!? What brilliance does it take to make HORRIBLE, frankly fraudulent choices? He'd be better off starting from scratch from the unemployment roles and letting some smart, honest people have a crack at running the company right.
    NO MORE BONUSES! I want my tax dollars BACK! I am honest and smart, work for a company who is not on a bailout track, and wouldn't expect a bonus in these times!!!
    If these people were really OK, they'd either refuse the bonuses or give them 100% to charity.

    March 16, 2009 12:43 pm at 12:43 pm |
  15. SHARON

    They are trying to say that they are contractually obligated to pay these bonuses. What sane company would write a contract that would guarantee bonuses regardless of performance? If the board and upper management is that stupid they all need to be fired. Secondly, if it is for retention purposes, why would you want to retain the very employees that helped get AIG in this mess and further, they won't leave, there is no where to go. This is just another Wall Street firm that thinks all America is stupid.

    March 16, 2009 12:50 pm at 12:50 pm |
  16. ANGIE

    forget about grilling, just fry their evil, greedy a$$es. they talk about paying out these bonuses to keep the best and brightest. if the best and brightest are what they have had for the last several years, they don't even deserve a pay check. they should be fired along with the ones giving the bonuses. they are all crooks!!!!!!

    March 16, 2009 12:50 pm at 12:50 pm |
  17. trying to be reasonable in WV

    How much is ENOUGH for these people? I understand that bonuses are a way of life on Wall Street. If only they were directly tied to REAL performance!!! Since getting a bonus seems to have little to do with having MESSED UP ROYALLY, maybe it's time (probably PAST time, I'd say) for the "Wall Street way of life" to come to an end.

    I don't know if there's any legal recourse in this situation, but there had better be some real changing of the rules for the future, or watch out for the backlash!

    March 16, 2009 12:54 pm at 12:54 pm |
  18. Pam

    These execs failed to perform their jobs.
    Do their contracts not include any stipulations about performance?
    Bailout aside – how can AIG give bonuses for work not performed?

    March 16, 2009 12:55 pm at 12:55 pm |
  19. J.P.

    A contract is a contract.

    If the bonuses were promised in a contract, then they must be paid.

    March 16, 2009 12:57 pm at 12:57 pm |
  20. Ex-Republican

    These execs aren't worth a crap. They caused the systematic failure of AIG. So why reward failure? Who is the head idiot that is allowing people to be rewarded for failing? It's this new CEO, that's who. I will take into consideration that he is working for $1 a year, and is the NEW ceo, not the one that was in charge during this ramp to obliteration. But that does not make it 'ok' to pay the previous failures a bonus. His executive order needs to be to get people that don't fail, let those that DO and DID fail see the door. Not reward the ones that did fail.

    March 16, 2009 12:57 pm at 12:57 pm |
  21. David in Dallas

    ...$160 million in bonuses paid to senior employees last week.

    AIG has received three bailout packages, totaling more than $170 billion....

    You know, it galls me that millions are paid to execs who fail.

    But really, we're talking about less than 1/1000 of the bailout money. Congress should spend 10 minutes berating them about the bonuses and then move on to what was done with the other 999/1000 of the money.

    March 16, 2009 12:58 pm at 12:58 pm |
  22. mw

    NO. DO NOT REWARD FAILURES. THESE OVERPAID JERKS ARE FAILURES.

    March 16, 2009 01:01 pm at 1:01 pm |
  23. Marc in Kansas City

    Yes, yes. Terrible actions by AIG. Our "outraged" lawmakers are nothing more than simpletons with a soap box. Where is the outrage at the billions of waste THEY are in charge of? Wouldn't want to shine a spotlight on that would you? No simpler to demonize someone else.

    March 16, 2009 01:04 pm at 1:04 pm |
  24. Barb

    Just who gets a contract that give someone a bonus for not doing a good job??? If the American people are paying these bonuses, we have the right to see those "contracts" that award a bonus for non-performance. And then we have the right to fire there . . . for wasting our money. Lay them off, tell them their position has been eliminated just like they do the "little guys everyday" and then create a new position with a new title and hire someone who can put company before personal wealth.

    March 16, 2009 01:13 pm at 1:13 pm |
  25. liz

    Will it be a gas grill or charcoal or will they roast them over a burning pile of 100 dollar bills?? Can we watch it live on the internets?

    March 16, 2009 01:13 pm at 1:13 pm |
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