March 18th, 2009
02:54 PM ET
13 years ago

Cafferty: Washington to blame for AIG bonus scandal?

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As outrage over AIG bonuses reaches a fever pitch, many are now wondering why our leaders in Washington didn’t do more to prevent the situation in the first place. The Obama administration says that it didn’t know until a couple of weeks ago that AIG executives were set to receive $165 million in bonuses.

They say that Treasury Secretary Tim Geithner found out last Tuesday; and the president learned of all this on Thursday, just a day before the controversial retention payments went through. But Geithner was running the New York Federal Reserve Bank last fall when AIG got a high-interest loan of 85 billion dollars to help prevent collapse — along with its first installment of federal bailout money.

And none of these folks must watch CNN because in late January, Mary Snow did a story on this very program about the insurance giant paying hundreds of millions of dollars in bonuses to its financial products unit.

To read more and contribute to the Cafferty File discussion click here.


Filed under: Cafferty File
soundoff (83 Responses)
  1. jeff

    Jack to stop the corruption ALL people running for office should have a term limit like the president. 2 terms of 4 years.
    and that is it.

    March 18, 2009 04:05 pm at 4:05 pm |
  2. Barbara NY

    I remember hearing about bonuses several months ago. It is obvious that Washington knew about these bonuses. The "outrage" shown by Congress is disingenuos. I don't think that the CURRENT CEO of AIG is responsible for this mess. At the very least, Congress needs to be held responsible for not making sure that bonuses weren't paid from the TARP money. As for AIG, the successful parts of this company should be retained and the rest should be allowed to die.

    March 18, 2009 04:07 pm at 4:07 pm |
  3. Flex

    $165,000,000=9.7% of $170,000,000,000

    Is this legal?

    March 18, 2009 04:07 pm at 4:07 pm |
  4. FreeNLovingIt

    Washington is 10% and the private sectors are 90% responsible for this turnout. It's time to make new laws letting private companies know that if you accept bailouts, these are the rules you are going to adhere to. 90% greed is still out there and they all still have their jobs. If not jobs, they still have their bonuses. The golden parachutes have got to be BURNED when you're landing on a pile of quicksand.

    March 18, 2009 04:07 pm at 4:07 pm |
  5. Independent Mike

    This is a bunch of bull. Obama may not have been president when this went through, but he was a senator that should of know what was in the bill he voted for. And every other congressman that voted for it would of known it too if they were doing the work of the AMERICAN PEOPLE. Enough is enough, vote 'em all out in 2010.

    March 18, 2009 04:08 pm at 4:08 pm |
  6. Pepou

    I don't trust Geithner a bit ...

    March 18, 2009 04:09 pm at 4:09 pm |
  7. andre

    160 comments on Obama's basketball picks. 160 more on Bush's comments. Not a single one on this. That's why the country is in a mess. That's why Obama is president.

    March 18, 2009 04:11 pm at 4:11 pm |
  8. spring

    The only thing that makes any sense is to let AIG go, let them bankrupt or go crawl under one of their wool rugs, THEY NEED TO BE SHUT DOWN.

    March 18, 2009 04:14 pm at 4:14 pm |
  9. Brian, California

    Why did we bail these guys out at all. They have bad bad bad business practices and

    either fire all their execs and then bail them out or simply dont bail them out.

    March 18, 2009 04:14 pm at 4:14 pm |
  10. tony

    Who is complaining about giving AIG execs a bonus....what was it $175 million of taxpayers dollars? What is the number in taxpayer dollars that we are GIVING ....."read nothing in return" to people on welfare? I would be willing to bet that number is higher than $175 million...but who is complaining! I have a better idea...why don't we....or better yet the Chinese gov't, since they financed the majority of our debt, ask congress and the senate for their pay back because they have not done their job. We are asking AIG execs to give their pay...bonus back because the gov't loaned AIG money..... I bet the Chinese want the money they loaned the US also

    March 18, 2009 04:14 pm at 4:14 pm |
  11. Neil Staff

    JACK,

    It's one thing to go after AIG and to be upset about the bonuses and all that, but since he's the one who caused all of this mess in the first place why hasn't Barney Frank been arrested and thrown into jail?

    It was his near single-handed pressure on the Clinton Administration and his bills in the legislature of your country that created the sub prime mortgage system and subsequent collapse wasn't it? And this has lead to the AIG failure and the near collapse of the American economy didn't it?

    Isn't this treason? Isn't this criminality of the highest order?

    Seriously, why has Barney Frank not been arrested yet?

    Regards,
    Neil Staff
    Canada

    March 18, 2009 04:16 pm at 4:16 pm |
  12. FreeNLovingIt

    You know we cant be babysitting everybody. They have to know what is right and what is wrong and what is fair. We just need more honest people to lead companies. Often times, it's the guy who can golf, not the one that knows how to do the job and do it right with honor and integrity.

    March 18, 2009 04:18 pm at 4:18 pm |
  13. Concerned in CA

    Absolutely congress is to blame for this – all of congress...republicans, democrats, independents...every single congressman and senator. Had the government put some actual restraint/oversight on the bailout funds starting from dollar one on day one...including putting the cabash on any and all bonuses (it's not like it was a secret that Wall Street likes bonuses!) perhaps there wouldn't be so much finger pointing. I appreciate the President saying the "buck stops with him," but the truth is years of deregulation and businesses operating out of pure greed has lead to this. I very sick of hearing democrats blame republicans and republicans blame democrats. Face it, you ALL dropped the ball on this while watching your investments (and campaign funds) grow. Now the public has to pay for your choice to turn a blind eye and benefit from the greed. You all danced...now it's time to pay the piper and you're asking us to pay for it. Shame on you all...stop placing blame and start doing your jobs – while you're at it, how about taking a significant pay cut?

    March 18, 2009 04:18 pm at 4:18 pm |
  14. Jan

    Washington is not completely blame free, but I think these companies deserve most of the blame. They are clearly taking advantage of the situation, using it to fill their already-fat pockets. I'm sure they believe they deserve their bonuses - but first of all, no one is so amazing that they deserve such an exorbitant sum in addition to their salary. Secondly, if they were so amazing at their jobs that they deserve millions of dollars, their companies wouldn't be failing and the economy might not be in the mess that it's in.

    Their disregard for the tax payers and for ethics is very disappointing and disgusting.

    The government should take back the money and let these crooks fail. Tax payer money should be put to a worthier cause.

    March 18, 2009 04:19 pm at 4:19 pm |
  15. R. McNeal, Sr.

    Can't believe the lawyers missed nullifying the retention bonuses with a normal financing syndrome for sick companies. In a workout (financing of sick companies), risk capital is the last in, first out. All other financing are nullified until the last in investor is fully paid.

    March 18, 2009 04:19 pm at 4:19 pm |
  16. deb0155

    If the American public believes that Washington knew nothing of this – then we ALL deserve what we're getting! How can any of us trust the American government anymore?

    When are WE the American People, going to stand up and fight! We are like lambs going to the slaugher!

    March 18, 2009 04:19 pm at 4:19 pm |
  17. Chris

    The biggest problem of all for Congress is how they are going to continue to do the rope-a-dope around who's to blame for what part of this economy! For the last two years, at least, Democrats have ruled the roost (both houses) yet the economy was tanking, now here's a brand new President and we're still not adding any jobs in the private sector. Yet Congress hasn't faced one layoff yet, not one tiny little first year Congressperson has been laid off. Even though they work less, make more, get more expense money, than almost anyone else around they are still the most secure jobs in America! Vote them out? No way can it be done. Hmmm, how else can we take back our country? How else can we take back a budget that's got so much Pig in it that it smells like some of these Pig farms around here.

    March 18, 2009 04:20 pm at 4:20 pm |
  18. Steve

    Who is the "Secretary" who must approve the bonuses? The Conference Committee amendment permitting these transfers as read by Rick Sanchez, required the approval of the “Secrtetary.” If it is Secretary of the Treasury Geitner, the transfers were void without his approval.

    March 18, 2009 04:20 pm at 4:20 pm |
  19. gerry

    It's hilarious watching the repubs blame Geitner for AIG, when 160 billion dollars was given to AIG before Obama was even elected.

    Looking to blame someone, blame Paulson-he's the one who wrote the check-5 months before Geitner became Treasury Secretary.

    March 18, 2009 04:21 pm at 4:21 pm |
  20. Darryl Miller, Arlington Texas

    Time in position of power breeds corruption. We need the"Transparency Now!!" Man, could some one tell me how AIG will payback this money. They will not pay it back when they are spending more than the are bring in to the company they will likely in two week file bankruptcy and we again are holding bad paper. The money is spent.

    March 18, 2009 04:22 pm at 4:22 pm |
  21. u2canfail

    NBC is running a little thing about good deeds in America every night. Things real people are doing to help others right now. I know that no person at AIG knows what that means, Congress (politicians) have a hard time with it, by definition. So let's put them and the bankers, all in 1 room and show the clips 24/7. UNTIL.... the dawn of a clue!

    It is just an idea. Most of these guys do not know what it means to need help or to help from the heart ..... without a tax deduction.

    March 18, 2009 04:23 pm at 4:23 pm |
  22. Bert

    jack, listen to the facts before you pick up the pitchfork and join the uninformed crowd. the bonus contract was signed in 07. it was a retention bonus designed to retain key people capable of unwinding large failing positions to avoid collapse of AIG. the bonuses were paid to those who were successful and, therefore, helpful to saving AIG. They delivered and were paid per the contract. Upon learning about the contracts last year, Liddy had them reviewed by attorneys, who advised him AIG had to pay, or would suffer financial consequenses that would exceed the contract values. The contracts were signed before Liddy, and before Obama, and are not legally or practically reversable. Please get the facts right. We cant afford to throw the baby out with the bathwater to satisfy the ignorant.

    March 18, 2009 04:23 pm at 4:23 pm |
  23. Powder

    Turbo tax Tim, Barney Fife and Chuck Dodd all need to be thrown out immediately. If not, then the whole obama administration should resign. They are playing with OUR money and this just does not fly.
    We were not born yesterday.

    March 18, 2009 04:24 pm at 4:24 pm |
  24. Peter N(MN)

    Washington took bribe from A.I.G. Cafferty , American taxpayers are victim of dysfunctional Washington and A.I.G 419ers. We need to withdraw all members of the congress. This government is ours(the American people), not for greedy AIG executives and weak congress.

    March 18, 2009 04:24 pm at 4:24 pm |
  25. cnnnewser

    I hope somebody fesses up soon.
    BUT, I think the Bush treasury secretary, Paulson, and several other leading republicans were the ones that didn't want the bonuses removed.
    It'll be interesting who the fall guy is.

    March 18, 2009 04:25 pm at 4:25 pm |
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