The AIG Bonuses Scandal

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Agreed

 

Well, half the bonuses are being payed back, which totals around $80million of the $165million payed out. Which is a good start.

 

If the executives have to pay back their bonuses, don't you think the following politicians should pay back their 2008 campaign contributions?

Name Office Total Contributions
Obama, Barack (D-IL) Senate $104,332
Dodd, Chris (D-CT) Senate $103,900
McCain, John (R-AZ) Senate $59,499
Clinton, Hillary (D-NY) Senate $37,965
Baucus, Max (D-MT) Senate $24,750
Romney, Mitt (R) Pres $20,850
Biden, Joseph R Jr (D-DE) Senate $19,975
Larson, John B (D-CT) House $19,750
Sununu, John E (R-NH) Senate $18,500
Giuliani, Rudolph W (R) Pres $13,200
Kanjorski, Paul E (D-PA) House $12,000
Durbin, Dick (D-IL) Senate $11,000
Perlmutter, Edwin G (D-CO) House $10,500
Rangel, Charles B (D-NY) House $9,000
Edwards, John (D) Pres $7,850
Corker, Bob (R-TN) Senate $7,400
Smith, Chris (R-NJ) House $6,900
Neal, Richard E (D-MA) House $6,500
Rockefeller, Jay (D-WV) Senate $6,500
Reed, Jack (D-RI) Senate $6,000
Udall, Mark (D-CO) House $5,800
Maffei, Dan (D-NY) House $5,000
Nelson, Bill (D-FL) Senate $5,000
Warner, Mark (D-VA) Senate $5,000
Bean, Melissa (D-IL) House $4,750
Shelby, Richard C (R-AL) Senate $4,500
Mahoney, Tim (D-FL) House $4,000
Crowley, Joseph (D-NY) House $3,500
Fimian, Keith S (R-VA) House $3,300
Huckabee, Mike (R) Pres $3,300
Leavitt, David O (R-UT) House $3,000
Murphy, Chris (D-CT) House $2,800
Franken, Al (D-MN) Senate $2,700
Berman, Howard L (D-CA) House $2,500
Dole, Elizabeth (R-NC) Senate $2,500
Garrett, Scott (R-NJ) House $2,500
Cornyn, John (R-TX) Senate $2,300
Culberson, John (R-TX) House $2,300
Goode, Gregory Justin (R-IN) House $2,300
Landrieu, Mary L (D-LA) Senate $2,300
Lummis, Cynthia Marie (R-WY) House $2,300
Shays, Christopher (R-CT) House $2,200
Davis, Tom (R-VA) House $2,000
Hoyer, Steny H (D-MD) House $2,000
Inouye, Daniel K (D-HI) Senate $2,000
Pomeroy, Earl (D-ND) House $2,000
Visclosky, Pete (D-IN) House $2,000
Weiner, Anthony D (D-NY) House $2,000
King, Pete (R-NY) House $1,843
Gillibrand, Kirsten E (D-NY) House $1,500
Shaheen, Jeanne (D-NH) Senate $1,500
Grassley, Chuck (R-IA) Senate $1,250
Nelson, Ben (D-NE) Senate $1,200
Wicker, Roger (R-MS) Senate $1,100
Baker, Richard (R-LA) House $1,000
Barrasso, John A (R-WY) Senate $1,000
Bennett, Robert F (R-UT) Senate $1,000
Brady, Kevin (R-TX) House $1,000
Capps, Lois (D-CA) House $1,000
Coleman, Norm (R-MN) Senate $1,000
Collins, Susan M (R-ME) Senate $1,000
Cooper, Jim (D-TN) House $1,000
Donnelly, Joe (D-IN) House $1,000
Ellsworth, Brad (D-IN) House $1,000
Engel, Eliot L (D-NY) House $1,000
Enzi, Mike (R-WY) Senate $1,000
Gordon, Bart (D-TN) House $1,000
Graham, Lindsey (R-SC) Senate $1,000
Harkin, Tom (D-IA) Senate $1,000
Himes, Jim (D-CT) House $1,000
Jones, Stephanie Tubbs (D-OH) House $1,000
Kind, Ron (D-WI) House $1,000
Kirk, Mark (R-IL) House $1,000
Lautenberg, Frank R (D-NJ) Senate $1,000
Lowey, Nita M (D-NY) House $1,000
Maloney, Carolyn B (D-NY) House $1,000
McMahon, Michael E (D-NY) House $1,000
Olson, Pete (R-TX) House $1,000
Pryor, Mark (D-AR) Senate $1,000
Salazar, Ken (D-CO) Senate $1,000
Tiberi, Patrick J (R-OH) House $1,000
Towns, Edolphus (D-NY) House $1,000
Wilson, Charlie (D-OH) House $1,000
Mielke, Daniel Ernest (R-WI) House $900
Huelskamp, Timothy A (R-KS) House $750
Laesch, John (D-IL) House $750
Tinklenberg, Elwyn (D-MN) House $750
Vilsack, Thomas J (D) Pres $700
Harrison, Stephen A (D-NY) House $604
Brownback, Sam (R-KS) Senate $500
Courtney, Joe (D-CT) House $500
Crapo, Mike (R-ID) Senate $500
Davis, Geoff (R-KY) House $500
Fossella, Vito (R-NY) House $500
Gilchrest, Wayne T (R-MD) House $500
Hastings, Alcee L (D-FL) House $500
Musgrove, Ronnie (D-MS) Senate $500
Myers, Chris (R-NJ) House $500
Pelosi, Nancy (D-CA) House $500
Pierluisi, Pedro (3-PR) $500

 

Ah, now you may be getting it. The amount of the bonuses is an insignificant amount of the total "bailout" money that AIG has received, yet that is all anyone is focusing on. It is all "smoke and mirrors" to distract people from where the money is being spent.

 

I don't think that the ones who came to AIG after the massive amount of fraud that went on in that company should be singled out for ridicule by the public. However, those who ran AIG and were a part of the fraud that brought the company down should get an extra bonus -- more jail time added to their prison sentences.

 

You lost me on that one. What fraud? Correct me if I'm wrong, but all AIG did was take sub-prime mortgages (which were perfectly legal and encouraged by Fannie and Freddie) and roll them into investment vehicles which were then sold to investors. Didn't AIG meet all of the reporting requirements as set forth by the SEC relating to these investment vehicles? I believe the answer is a resounding "YES". Then to the 20/20 hindsight surprise of no one the sub-prime borrowers weren't able to make their payments and the investments that the investors invested in became worthless (that was a hell of a sentence). When the investments lost their value, AIG was holding all sorts of them as assets and when they properly had to be "marked to market" it caused masses losses in AIG and they were no longer able to maintain the asset ratios that insurance companies are required to do so. Where is the fraud? There was clearly stupidity and foolishness, but since when have those been illegal or fraudlent. I may be wrong, but that was my understanding .

 

You are misinformed. They insured a lot of those investments that went bad. So if a customer takes out insurance on an item and pays you for it, but you never set aside the funds to pay for claims -- that's really fraud. A lot of those international banks are holding policies that AIG could not pay on.

TGS - Just type AIG and Fraud into google and see all the varied fraud investigations, including the FBI, that are active against the company.

 

That's very true. They are too big to fail. That is why the regulation is needed to prevent companies from becoming so big that they threaten the security of the nation as a whole. That regulation used to be there but was removed - with the best intention - but it turned out to be a costly mistake.

 

I will, I just don't have the time right now. I'm still not convinced as they had more than enough assets to cover the policies. The problem started when the assets they had became worthless and therefore they couldn't pay. Now, I will admit that "Cash" is a better asset to have when you are in insurance, but it is the insurance regulators who determine what your "reserve" has to be and what makes it up. You have to remember that some of these investments had very high ratings with Standard and Poors, and/or Moodys.

 

There are so many links on AIG fraud that I don't have time to go through them. But this is from its general history on Wiki:

 

You don't need to use the "would" qualifier. The first AIG bailouts were done under the Bush administration last fall. In fact, the first two of the four bailouts AIG has received since the fall of last year were under the Bush administration. I'm not sure of the exact dollar amounts (in regards to how much of the originally authorized $700 billion that AIG received), but both administrations have been very generous.

 

I wanted to bring up the forced resignation of Rick Wagoner, CEO of GM, but wasn't sure if it warrented its own thread, since this is more or less the same topic. Thoughts anyone? (Feel free to start one, guys.)

 

The guy's an idiot. He should have been fired by the board a long time ago. Wagoner is one of the 'good old boy' examples of why there should be some controls over who sits on corporate boards. Idiots choose other idiots to sit on the board with them (and get rewarded by sitting on another idiot's board) -- these morons then protect each other by hiring from the tainted gene pool and giving ridiculous golden parachutes.

But what do I know? I'm a chemist, I don't have an MBA.

 

I agree with both of you. I especially admire the Obama administration for making his immediate dismissal a condition of further government aide. I just wish they'd done that with some of the bankers, but this is certainly the kind of tough love I want to see more of.

Part of me thinks it's a little scary for the government to involve itself in business decisions like this, and I don't know enough about GM's inner workings to know if getting rid of Wagoner at this time will help or hurt (considering it's been him at the helm these last 10 years, I say its the former). But at the same time, this isn't some otherwise healthy company the government is butting in on - this is a drowning company asking for a handout from the taxpayers to stay afloat. Tough conditions can and should be set, and they should never be painless.

 

I'm glad you made that comment on the AIG thread, where we were wondering why the guys there got millions in bonuses. Talk about "pain-free" conditions.

I don't admire Obama for this at all. I agree with your comments about the CEO, but it seems that there are two standards at work here. He's asking the average blue-collar worker for conditions, but what conditions did he ask of AIG? I reminded of Martaug's comment about Obama being just another "Washington politician." He sure looks like one in this instance.

 

I don't see it that way. I see the administration doing to GM what should have been done to AIG but they (admittedly) screwed up. They're just getting it right this time. I see the AIG situation as the Obama folks dropping the ball, not favoritism. I think if they had it to do over again they would have handled AIG very differently than they did. In fact, the bad blood between the two parties seems very palpable to me.

 

I agree 100% with this. The fact that the ball was dropped with AIG doesn't mean that they should do the same thing going forward. At least they're learning from the previous mistake.