Speaker of the House Rep. Nancy Pelosi announced that she has asked the Chairman of the House Financial Services Committee, Rep. Barney Frank to explore the legal possibilities for taking AIG’s $170 billion in federal bailout money back, after the company announced that they will be handing out $165 million in executive bonuses.
“While American workers see their wages decline and face record job losses, it is unconscionable that AIG, which is receiving more than $170 billion in government assistance, would permit such extravagant executive compensation practices without any accountability to the taxpayer. I have asked Chairman Barney Frank of the House Financial Services Committee to examine options that are legally available to recover taxpayer funds of companies that abuse the privilege of taxpayer assistance,” Pelosi said.
She also urged AIG to change their minds and not hand out the bonuses, “I call upon the executives at AIG to right the wrong they have done to American taxpayers, who are footing the bill for the most expensive government rescue in history. They should renounce the bonuses and refuse the excessive retention pay they previously agreed to.”
Everybody start the countdown until AIG puts out a statement saying that they will not take the bonuses. Since they were stupid enough to try and take the bonuses in the first place, it is possible that they will wait to see what the House does to take the taxpayers money back before they change their minds. A smart organization would have already put out a statement announcing that they will reverse course on the bonuses, an even smarter organization would have never tried to take the bonuses and retention pay in the first place.
The greed of these guys never stops. Any executive at a company that almost goes broke and requires the government to bail them out is not worthy of a bonus. I would not retain any of the people who almost ran the company into the group, so they should forget about the retention pay too. The legislation for the TARP was so rushed, and poorly written by the White House that I don’t know if the government has a mechanism to legally recover the taxpayer’s money. I suspect that the mountain of bad PR has just begun for AIG, and if nothing else, no one should be surprised if the government considers suing AIG on behalf of the taxpayers for recovery of their funds.