Obama Knew About AIG Bonuses

But Is That The Biggest Story?

by Phil Staudt
blog.philstaudt.org
March 18, 2009

If I were to watch CNN for the next 24 hours, most of the news will be about AIG bonuses, which accounts for 1/1000th of taxpayer money given to AIG. What happened to the rest of the money from taxpayers? Isn't it more important that tens of billions of taxpayer dollars given to AIG is going to banks in Europe and outside the United States? Isn't it more important that Obama and Geithner and Chris Dodd and Barney Frank all put on an act that they are surprised and angry at AIG when they all knew about it? They are just angry that the public found out about it and turned it into a big story.

The reason Obama got rid of using the term "enemy combatants" for captured terrorists is because it is more appropriate to save that term for our politicians in Washington.

This AIG bonus coverage by every news program is gross overkill. It is just business as usual, but they are talking about this almost as much as they covered Paris Hilton in jail. It is just one more way for them to entertain us and make us take our eye off the ball so they can sneak around and put some more dough in their pockets.

All CNN and CNBC and MSNBC is talking about this week is $165 million in bonuses, but that is just a diversion from the disclosure that a large portion of the $170b handed out to AIG to save our country is going outside the United States. Repeat: OVER $60 BILLION OF TAXPAYER MONEY GIVEN TO AIG IS GOING OVERSEAS! That is a more important story than what Madoff stole from investors in his ponzi scheme, and the taxpayers are not on the hook to pay for the Madoff money and taxpayers are not going to pay billions of dollars of interest to China and Russia and Saudi Arabia for Madoffs mess like we will for all of this spending. But the major networks and newspapers and bloggers are only focusing on bonuses and Madoff instead of the biggest story. CNN and all the major news networks should immediately stop their commercials and suspend their regular programming and exclusively cover the "We Are So Far In Debt That We Can't See Daylight" story. They should be telling viewers that our government is going "all in" by gambling hundreds of billions of dollars a spin on the Wall Street corporate roulette table. When hard working Americans come home from work and plop down on the couch and grab the remote, the only thing that should be on the air is accurate honest information telling them that America is going to hell in a hand basket right now at this moment, and the country is broke and if this continues that we will all be living in Chinese compounds working 16 hours a day for a cup of soup.

Any time a story takes front stage and dominates all news articles and reports, you can be assured that something else is taking place that they don't want us to know, so I bet CNN and NBC and all the news networks are covering something else up, and we may never know. The fuss being made about $165 million in bonuses being paid to AIG executives during the past four days is a fancy trick on the corner of the stage so the magicians in power can work behind the curtain to set up their next assault on the United States of America and pick your pocket and steal your furniture while you are sleeping tonight. Obama says he is angry about these AIG bonuses, but the amount of interest being paid by the American taxpayers every single day as a result of his economic recovery spending spree and his new budget and the money thrown away by the Bush and Paulson TARP, makes these AIG bonuses look like a speck of sand on the beach. That is what taxpayers should be mad about and that is the real story that the media and bloggers and networks should be talking about.

Obama and Bush and all successful politicians know that the news is only going to show their answers and not the questions they were asked. That is why when you watch live question and answer sessions that the media is allowed to have with the President, the answers that are given have nothing to do with the questions that are asked. They schedule these questions to be asked at times when most people are busy working or in school. Later on in the day the networks run their favorite clips with no regard of what they were being asked. Today when Obama was asked about the $100,000 he received in campaign contributions from AIG, he went into a dissertation about the drafting of the Constitution by Hamilton and the founding fathers and that we need to stop bad things from happening in the future. When Obama was asked if he knew ahead of time that AIG was going to pay these bonuses because they told Bloomberg and CNN and Associated Press about it on January 28, 2009, Obama did his regular "Well, look.." thing and said that he was not the one that drafted the contracts and he was not in charge of running AIG when the contracts were written to pay these bonuses. Obama should have known about it when he rushed to Washington on his jet (just like the auto executives) to vote for the TARP that benefited his contributors. They could have insisted BEFORE AIG got taxpayer money that AIG suspend all bonuses until taxpayers got paid back. But he was in on it and it was an inside job and the American taxpayers got robbed, which is what I said in September before AIG got any money.

AIG told Bloomberg and Associated Press on January 28 that they were planning to pay $450 million in bonuses because of legally binding contractual agreements. CNN did a piece on it on January 28. This is not new news. Newspapers across America printed the AP article and many of the articles are still online. (See links listed under my article.) Obama and Geithner and Barney Frank and Dodd and Bush and Paulson and Max Baucus all knew about these bonuses. Maybe Obama and Giethner and all the people working for them missed all the news reports from AP and Bloomberg and CNN on January 28 about AIG planning on paying these bonuses. Either Obama and Geithner and Dodd and Barney Frank are very uninformed and grossly incompetent or they are crooked liars. Most likely both. Geithner lied about his own taxes and it was fine with Obama, and now they are both lying about this. Obama and Dodd each received campaign contributions of over $100,000 from AIG. If giving money to AIG had to be done regardless, then so be it, but tell taxpayers the truth instead of pointing the finger at AIG and saying you did not know. Don't be mad at AIG. Be angry at the politicians for allowing this to happen. 

The government giving money to either auto companies or AIG is bad, and neither auto companies or AIG should be giving bonuses or paying executives or employees as if everything is going fine under these circumstances. AIG should have been required to tear up contracts or defer bonus payments and reduce executive pay before AIG got a dime of taxpayer money. But the government screwed up by giving money to AIG and then trying to make up some rules and hope that AIG goes along. They could have insisted that bonus contracts be null and void BEFORE the deal, and the recipients would have had to agree. Instead, they are trying to collect a new cover charge from the patrons who have already been in the bar and drinking for hours. It is not AIG's fault, but politicians knew what they were doing, and took care of their buddies with our money, and that is why AIG is legally obligated. The laws and Constitution should not be ignored, even for a good cause. That kind of thinking brought us The Patriot Act.

It is scary that the rule of law and The Constitution does not matter to people. Obama and Geithner and Barney Frank all say they are "shocked that gambling is going on here". These contracts were in place before Liddy was the CEO of AIG, and AIG is obligated to pay what they agreed to, whether the people are shmucks or swindlers or bums. This situation should have been addressed by Bush and Paulson and Barney Frank before the taxpayers were on the hook for anything, and this should have been addressed by Senator Obama and Senator McCain and Senator Clinton when they voted in favor of the package that made it possible for their buddies to take care of each other. But the politicians were taking care of their own and they know it. Do not blame AIG for fulfilling its legally binding promises. Blame the people who gave taxpayer money to AIG knowing good and well that they were legally obligated to pay these ridiculous scandalous bonuses. Blame whoever authorized the money going to a company with these stupid deals. If giving money to AIG had to be done regardless, then so be it. Tell taxpayers the truth instead of pointing the finger at AIG. And no, The President of The United States and Congress do not, and should not, have the authority to mandate that these companies not be legally obligated to follow the law just because they got some taxpayer money. As taxpayers we should spend more time scrutinizing money being spent by our elected officials and blame them. Be angry at the politicians for allowing this to happen.

Meanwhile, Obama and Democrats are coming up with a new plan every day to spend another trillion dollars and hope it helps, and people making millions of dollars a year like Rush Limbaugh only care about their personal tax rates and will say anything to keep their taxes low and are in denial that the tax cuts by Reagan and Bushes at the same time that Republicans were spending money on programs to benefit the wealthiest people and most profitable corporations have put this country in very sad shape.

by Phil Staudt
blog.philstaudt.org
March 18, 2009

http://www.salon.com/opinion/greenwald/2009/03/17/dodd...
Glenn Greenwald
Tuesday March 17, 2009 17:59 EDT
The dishonest "Blame Dodd" scheme from Treasury officials
...But now that a political scandal has erupted over these payments, the White House is trying to deflect blame from itself and heap it all on Chris Dodd by claiming that it was Dodd who was responsible for that exemption...
http://www.cbsnews.com/blogs/2009/03/18/politics/politicalhotsheet...
CBS News March 18, 2009 11:28 PM
Dodd: Treasury Insisted On Grandfathering Bonuses
Posted by Ken Millstone
...As CBS News and others have documented, that outrage is disingenuous coming from lawmakers who have known about the pending bonuses for months.
In particular, it's disingenuous coming from anyone who voted for the American Recovery and Reinvestment Act of 2009 (a.k.a. the Obama stimulus package). The stimulus bill included provisions to limit executive compensation at companies receiving federal bailout money. But it also stated explicitly that the limits would not apply to bonuses agreed to prior to Feb. 11, 2009... 
http://www.bloomberg.com/apps/news?pid=20601087...
AIG’s Liddy Takes ‘Offense’ at Congress Bonus Blame 
By Erik Holm March 19 (Bloomberg)
...Liddy told the hearing that he had asked employees paid bonuses exceeding $100,000 to repay half...
http://www.washingtonpost.com/wp-dyn/content/article/2009/03/18/...
What to Do About AIG?
Thursday, March 19, 2009
A former AIG executive and others suggest better ways to aid ailing businesses.
MAURICE R. "HANK" GREENBERG
Chief executive of AIG from 1967 to 2005
CEO Edward Liddy believes that dismantling AIG, once the world's largest and most successful insurance company, is the only way to repay the taxpayer money...
http://www.forbes.com/fdc/welcome_mjx.shtml
The Way We'll Be
AIG Bonuses Are Costly For Obama
John Zogby, 03.19.09, 12:00 AM EDT
Sure, they're legal, but they're also wrong.
Outrage about the $165 million in bonuses paid to executives at AIG may represent a tipping point in public attitudes...
"He is making all the right moves in terms of playing a bad hand," the president said. Mr. Obama took ultimate responsibility for the bonus flap, saying "the buck stops with me."
http://hillbuzz.wordpress.com/2009/03/17/this-is-a-damn-lie-obama-claims-he-didnt-know...
This is a damn lie: Obama claims he didn’t know about AIG bonuses until this month
March 17, 2009 Posted by hillbuzz
http://online.wsj.com/article/SB123721970101743003.html?mod=rss_whats_news_us
MARCH 17, 2009
Political Heat Sears AIG
Obama Vows to Block Bonuses, but It May Be Too Late; Firm Pressured to Repay U.S.
By JONATHAN WEISMAN, SUDEEP REDDY and LIAM PLEVEN
http://finance.yahoo.com/news/Frank-assails-bonuses-paid-to-apf-14646988.html
http://www.nytimes.com/2009/03/16/business/16aig.html?_r=1
http://www.cnbc.com/id/29717766
http://www.usatoday.com/money/industries/insurance/2009-03-15-summers-aig_N.htm
http://tbm.thebigmoney.com/features/todays-business-press/2009/03/17/lives-danger-aig
"Lives in Danger" at AIG
By Bernhard Warner and Matthew Yeomans Posted Tuesday, March 17, 2009 - 4:56am 
...The epicenter of the outrage Monday was Washington. Even though Treasury officials knew of the planned payout for months, they only voiced their indignation just as the checks were being cut over the past few days. President Obama added his outrage to the AIG bonus furor, vowing to "pursue every single legal avenue to block" the payouts. But, the Wall Street Journal reports, "hours later, administration officials said the payouts made Friday couldn't be extracted from their recipients without a legal fight that would cost the taxpayers even more." Shortly afterward, in stepped New York Attorney General Andrew Cuomo, who said "he would subpoena A.I.G. for the names, job descriptions and performance evaluations of the employees receiving the bonuses," the New York Times reports. The AIG bonus fiasco appears as if it will devolve into a matter of who knew what when.
http://www.prisonplanet.com/aig-payments-to-banks-stoke-bailout-rage.html
http://www.businessethics.ca/blog/2009/03/aig-bonuses-ethics-and-rule-of-law.html
http://boortz.com/nealz_nuze/2009/03/the-aig-bonuses.html
http://prontherun.wordpress.com/2009/03/16/aig-and-obama-duped-again/
http://lolfed.com/2009/03/16/not-expecting-this/
http://racinenews.org/?p=25894&cpage=1#comment-3175
http://jdeanicite.typepad.com/i_cite/2009/03/the-aig-bonuses-furor-the-class-issues.html

JANUARY 28, 2009 ARTICLES:

http://www.bloomberg.com/apps/news?...
Jan. 28 (Bloomberg)
AIG Said to Offer $1 Billion in Retention to Workers (Update1) 
Jan. 28 (Bloomberg) — American International Group Inc., the insurer saved from collapse last year by government money, may have committed more than $1 billion to employees to keep them from leaving the company. About 400 workers at New York-based AIG’s financial products unit may get $450 million in two installments...AIG is trying to hold onto employees while it sells businesses to repay a government loan...AIG said the program was disclosed before the government rescue, which is now valued at $150 billion..."
http://www.theithacajournal.com/article/20090128/NEWS01/90128013/1002
www.huffingtonpost.com/huff-wires/20090127/aig-bonuses/
AIG will still pay swaps team retention bonuses
MADLEN READ | January 27, 2009 05:28 PM EST
Associated Press
NEW YORK — American International Group Inc. said it is paying retention bonuses as planned to employees in the unit that sold credit default swaps...$450 million is being offered to a group of about 400 employees...We adopted and disclosed this contractual retention program months before the government provided support to AIG. We did so because it was clear, given the market environment, that we would need to retain employees...But the bonus system is still firmly in place on Wall Street..."
http://berniehund.com/2009/01/28/aig-to-give-out-bonuses-tarp-money-gone-wild/
AIG to Give Out Bonuses, TARP Money Gone Wild?
By sinde on January 28th, 2009 
According to Bloomberg news, AIG, the insurance giant too big to fail is going ahead with plans to give out bonuses to to some 400 Wall Street employees to the tune of $450,000,000...
http://hawtaction.com/2009/01/jlf-bailout-disaster-how-aigs-spending-your-money.html
JLF: Bailout Disaster - How A.I.G.'s Spending Your Money
By Johnny Lead Foot on January 27, 2009 8:30 PM
http://briefingroom.thehill.com/2009/01/28/kanjorski-calls-bonuses-for-aig-executives-outrageous/
January 28, 2009
Kanjorski: Bonuses for AIG Executives 'Outrageous'
@ 3:45 pm by Hill Staff 
Kanjorski, a member of the House Financial Services Committee, slammed ailing insurance firm American International Group (AIG) for paying some $450 million in retention bonuses
http://www3.signonsandiego.com/stories/2009/jan/27/aig-bonuses-012709/?zIndex=43844
http://www.rickroot.com/blog/1/2009/01/AIG-to-pay-450-million-in-bonuses—using-Taxpayer-money.cfm