As Outrage Grows, Demands in Congress Call for Full Refund of AIG Bonuses
NY AIG
WENY-TV
Lindsay Perna
Boston University Washington News Service
March 18, 2009
WASHINGTON – As public outrage grew this week, congressional leaders and government officials made demands for a refund of executive bonuses from the insurance giant American International Group Inc.
Trying to calm the quake on Capitol Hill, Treasury Secretary Timothy Geithner said on Tuesday that he plans to subtract the $165 million of executive bonus money from the final installment of $30 billion to AIG.
Edward Liddy, the chief executive of AIG, testified before a House subcommittee Wednesday telling the angry representatives that the executives have been asked to return the bonuses at least by half.
Rep. Glenn Thompson (R-Pa.), a defender of the federal piggy bank since he voted against the first bailout, said his fears came true when news broke about the bonuses.
Sen. Christopher J. Dodd (D-Conn.) removed an amendment from the stimulus bill when it went through the Senate that would have prevented the bonus debacle, according to Patrick Creighton, a spokesman for Thompson.
“They got money they shouldn’t have—they need to give it up,” Thompson said in a phone interview Tuesday.
Geithner’s punishment is nothing more than a slap on the wrist and an easy way out, said Creighton.
“I think this is sort of a warning sound,” Thompson said. “If you are going to come to the public trough for bailout we expect and we demand that if it is approved …that you better be prepared to be very transparent with how you are using this money.”
With his fellow freshmen Republicans in the House, Thompson co-sponsored legislation on Tuesday that would require the Department of the Treasury to get a full refund of AIG bonus money within the next two weeks and to approve any future bonus payments or contractual obligations.
Though Thompson’s proposal was not allowed to be introduced on the House floor, he said he is opposed to taxing the bonuses.
Some House members want to reach directly into the wallets of these executives and do just that.
Rep. Eric J.J. Massa (D-N.Y.), was one of 94 House members who co-sponsored a bill Monday that would recoup government money by taxing executive bonuses of more than $100,000 from companies that received TARP funds at a rate of 100 percent.
“I stand firm with the leaders in the House who want to see these bonuses recouped,” he said in a phone interview Wednesday, unsatisfied with the proposal by the secretary of the treasury to regain the cash in the next AIG installment.
“We should not be abandoning the goal of integrity,” Massa said. “We’ve been burned more times than we can remember—I can’t believe we want to go back to the well again.”
Massa said he appreciated Liddy’s request of the executives to return their million-dollar bonuses, but the congressman does not think the company will go through with a substantial return.
“No more money for Wall Street banks period,” Massa said.
Sen. Charles E. Schumer (D-N.Y.) played the blame game on the Senate floor Tuesday when he said President Obama and Geithner failed American taxpayers.
“What is particularly troubling is that AIG’s intention to pay these bonuses had been no secret, and the administration was completely aware of these payments,” he said.
Schumer co-sponsored with Dodd a bill Tuesday that would identify and mend failing banks and return them to the private sector.
“Let’s use the expertise and clean up rather than flooding these zombies with more dollars,” Schumer said.
The situation boggles his mind, he said.
“Well, Mr. Liddy, I urge you to fix this mess because, let me tell you something: We are all fed up,” Schumer said on the Senate floor. “If you don’t fix it, we will.”
“For those of you getting these bonuses, be forewarned: You will not be getting to keep them,” he said.
#####
