Wednesday, March 18, 2009

More Due Diligence...AIG Bonuses

Even a dog knows better than to bite the hand that feeds him. But I guess that does not apply to congressional leaders that received donations in 2008 from their arch-enemy, the "greedy American International Group- AIG."

Heading the list was none other than the Senate Banking Committee Chairman Chris Dodd and then Senator and presidential campaigner Barack Obama. But then this is Washington politics. Here is a short list of some of the recipients of AIG political contributions:

  1. Chris Dodd $103,100
  2. Barack Obama $101,332
  3. John McCain $59,499
  4. Hillary Clinton $35,965
  5. Max Baucus $24,750
  6. Mitt Romney* $20,850
  7. Joe Biden $19,975
  8. John Larson $19,750
  9. Rudy Giuliani* $13,200
  10. Dick Durbin $11,000
*presidential campaign contribution

During this 2008 cycle 55 House members and 33 Senators received these payouts. I don't hear any of them rushing to give the donations back. Democrats were the chief recipients with $442,996 while Republicans received $142,792. So where is the American public outrage. I'll wait....

The "Blame Somebody" Obama Administration claims that Senator Dodd included in the $787B stimulus bill an amendment that provided exemption for contractually obligated bonuses agreed on or before February 11, 2009 which exempted these AIG bonuses paid this week. Dodd has denied inserting the "Dodd Amendment". He claims that he did not include those dates and that when the legislation left the Senate it did not contain that language but when it returned those dates were inserted. Fine Mr. Dodd but congressional record shows that you still voted in favor of the bill. If you were so outraged by the amendment then why the yea vote? I'll wait....

Now Dodd seeks to tax the bonus recipients so that the government can recoup some of the $165M that AIG is paying out. So the politicians seek to specifically craft a bill to only tax AIG managers and executives that received these bonus payouts. This is ludicrous since the bill would only be targeted at a handfull of individuals! So you know that the actual language of the bill will target all bonuses paid to managers and executives of any company in the United States. And if any of you have ever received a management bonus then you would know that it has almost 40% Federal withholding taken out prior to you getting your money. Yet these same congress members and president signed a omnibus spending bill that had over $8 billion of earmarks ala pork and that's o.k.? On a percentage basis this is more than the 1/10th of 1% that the AIG bonuses represent.

What is not being told is that some of these financial service executives agreed to take $1 salaries for 2009 in exchange for receiving their retention bonuses. These were deals that were struck with "Turbo Tax" Timothy Geithner when he was the head of the New York Federal Reserve and arranging for the AIG bailout. So he knew that they were in there. These retention payments range from $1,000 to $6.5 Million. So the worker getting $1,000 would be ostracized by American society for receiving such a pittance of a bonus.

America please wake up before it is too late. I'll wait....

That's my word! Please post yours!


The Pondering Catholic said...

Again, I gasp and I sigh! I can not believe the ignorance that is out there about this stuff. Thank goodness you are out here teaching it! I go crazy!

Ron B said...

Thanks for your comments. We need more people to stop jumping on sound bites but start doing their own digging to learn! Information is available you just have to get it.

The Pondering Catholic said...

Amen Ron, Amen!! I guess they love them all being ignorant though. Cuz they can control them better then!

Ms.Green said...

Excellent commentary. The underlying message has nothing to do with mis-spent bail-out money and everything to do with promoting class envy. I had an argument with a co-worker who was saying "no one deserves to make that much money", to which I pointed out that some people would say that SHE makes too much money, and did she want the government to decide how much money SHE should make, how much Christmas bonus SHE should make, or to make HER pay extra taxes above everyone else?

Obviously, she had no answer. I told her to seriously consider the ramifications of her support of what the government was doing to these employees whose bonuses were contractual, and the government was already aware of.

Ron B said...

@Ms. Green
Excellent point. The government has long since placed a minimum wage in which companies had to comply with in stead of allowing market forces and competition to prevail for workers and their salaries. Along comes a crisis and government leaders think its o.k. to set a federally mandated maximum wage which I have blogged about before. Thanks for your post.