AIG CEO Edward Liddy: We’ll ask the bonus recipients to give half the money back.
It’s hard not to think of the scene from the Alberts Brooks classic “Lost In America” where Brooks asks a casino to give them back the money his wife lost at the tables:
Brooks: As the boldest experiment in advertising history, you give us our money back.
Desert Inn Casino Manager: I beg your pardon?
Brooks: See, you’re the casino that gives. You know, I’m in advertising. These are professional opinions you’re getting.
(And, yes, Joe Cassano should be forced to say “I lost the nest-egg.”)
Frirst Rule of Acquisition: "Once you have their money, you never give it back!"
Kiss my ass, you stupid motherfucker. Give it all back. Dick.
And for Liddy’s next impression, he’s Jessie Owens!
Nope, Doug. Here’s the quote I want to hear him say:
"I’m insane and responsible. This is a potent combination."
Perhaps this should be included with their bonus checks.
I never thought I’d say something like this, but maybe a little waterboarding would change their minds.
Suuure they’ll give it back. Just let them keep it and tax the living sh*t out of them for it.
Who knew that Cheney was simply being prescient when he instituted some of the most barbaric practices known to man as official policy? Well, now that barn door is open and the horses have been caught beating a few dead Muslims, perhaps its time to focus those horses hooves’s on a few Dick Cheney types here on Wall Street and DC before we try corralling them back in the barn. I mean, torture is relative. Right? We. Don’t. Torture. It’s just enhanced interrogation, but without the questions.
Could we televise it like we all saw Saddam’s hanging too, please?
I thought I saw a crawl last night that Geithner was suggesting the Feds would subtract the amount of the bonuses paid from the bailout money (i.e., if they give $100M in bonuses, AIG gets $100M less in bailout money). Does anybody know if this is true? Would it be an acceptable compromise position?
Somebody needs to point out to Liddy that in a sane world, those guys would all be going to jail.
That’s even more insulting than giving the bonuses out in the first place.
Yeah we tried to fuck you, you caught us, so we’ll only half fuck you.
The acceptable compromise position is that the Wall Street assholes all get fired, the firms hire and pay new talent salaries based on standard competition among potential employees (you know, hiring employees who create value for shareholders), and the criminal assholes who created this mess for their own self-interests be disgorged of all ill-gotten gains and wind up begging for change on the streets of Manhattan.
That compromise would be in comparison to those pitchforks held by the hands of Main Street Americans that the so-called liberal Ruth Marcus so sadly tut-tutted about in this morning’s Washington Post.
Pull them over for speeding. Drop a dime bag in the back seat. Seize all of their assets.
Or does that only work on black people?
Other applicable rules of acquisition for the Masters of the Universe:
A man is only worth the sum of his possessions.
A contract is a contract is a contract (but only between Ferengi).
A Ferengi without profit is no Ferengi at all.
Satisfaction is not guaranteed.
Never place friendship above profit.
There’s nothing more dangerous than an honest businessman.
Profit is its own reward.
Expand, or die.
Never ask when you can take.
The riskier the road, the greater the profit.
Enough … is never enough.
Treat people in your debt like family … exploit them.
There’s nothing wrong with charity … as long as it winds up in your pocket.
Not even dishonesty can tarnish the shine of profit.
The justification for profit is profit.
Employees are rungs on the ladder of success. Don’t hesitate to step on them.
Never be afraid to mislabel a product.
More is good … all is better.
Put it on Pay-per-view and it could help fund universal healthcare. Win-win.
Cost of the AIG Bailout per individual in the US: $550
Cost to average US family: $2200
Liddy should be worried, very worried about an uncontrollably large, angry mob spontaneously forming and marching on his doorstep and/or office with torches, feathers, and tar, and a rail to make him ride on all the way to Washington DC.
I am enjoying your evilness and hope that you will soon start a newsletter.
Acceptable in what way? It’s a nonsense position.
If AIG needs X amount of dollars to function as a company, that’s what they need. If we’re giving them more than that to the point that we can hold money back from them, then we’re giving them too much money anyway. If we’re not, and we hold back money, then they flounder and either die despite the bailout or they come back and ask for more money yet again.
It’s complete nonsense for Geithner to be floating that idea at all. All signs are beginning to point to "Geithner and Summers don’t know what the fuck they’re doing", and this is just another nail in the coffin. If he thinks its a good idea, he’s an idiot. And if he knows its a bad idea and he’s doing it as a stunt to try to assuage populist anger, he’s a charlatan (because it just means that in the next handout, AIG gets a little bit more to cover what we held back this time). Either way, even though I haven’t been in the camp that has been screaming for Geithner’s head, that stupid idea combined with the utter amount of bungling over these bonuses (and the attempt to blame it all on Chris Dodd) has really started to push me into the camp that says he needs to be fired. And hopefully replaced with someone with fewer personal ties to Wall Street.
Any chance that B-B-B-arneys Fwank’s favorite corporation Freddie Mac will join in this experiment?
Hilarious comparison! "Lost in America" is one of my favorite comedies of all time.
Nor is Cassano allowed to use either the word "nest" or the word "egg" anywhere, anytime or in any context.
The Moar You Know
I think it’s becoming very apparent that Geithner is not willing to take the steps that are needed against his old Wall Street buddies. "Business as usual" in this country is no longer acceptable to the public. All of his former cronies are going to be taking a massive salary cut and by any reasonable standard most of them ought to be in prison.
He needs to get with the program RIGHT FUCKING NOW or get tossed. It really is that simple.
Well, I’m fine with that as long as Sallie Mae, the Shrub’s personal favorite banking corporation does, too.
And the over/under on even one recipient doing so?
Just before their bankruptcy petition, Enron paid a group of energy traders and execs $100 million in retention bonuses. No doubt just as swell and fine a group of people as AIG’s derivative traders anticipating payment of their “well-earned” bonuses.
Anyway, they were asked to return those bonuses. None did. A creditor’s group then sued the Enron traders. Most settled, but about 40 told them to piss off they’d go to trial. They lost. Under the new bankruptcy laws it’s much easier for a bankruptcy court to void retention bonuses or demand a return of those already paid pre-petition.
AIG needs to be put into Chapter 11. Not just because of the bonuses and spa retreats which is small money. Their executive leadership just doesn’t seem to have a grasp on reality. Billions we’re putting into AIG is like money being poured into a colander. It’s going out a hundred different holes almost as fast as it’s being poured in. And no one in AIG seems to want to plug any of those holes or at least slow the outflow. They need serious oversight a bankruptcy judge could provide.
Agreed. I haven’t been too mad about this so far. I agree with the anger, but it’s not like it effects me, rationally the bonuses are a drop in the bucket, etc. But this is ridiculous.
"OK, you’re right, the bonuses are bad. So tell you what, we’ll ask the people who got the bonuses to be generous and give half back. Don’t you feel better now? Surely you can concede that they deserve half of $165 million. And yes, we’ll only ask, it would be rude to try to force them to give it back."
Where’s the nearest wall we can get these mindless jerks up against?
The Moar You Know
@Paul L.: I think you can count on it. They are looking at huge bonuses for having lost 100 billion dollars, and I don’t think anyone, regardless of political persuasion (save for Rush Limbaugh, who seems to think AIG deserves all their bonus money) is willing to let that happen.
Only if you’re intrigued and thus wish to subscribe.
If the bonuses must be paid then simply pay them with sacks of pennies. Make it a condition that they get to keep all that they can carry.
Paul, damn near every company in trouble has a retention plan, even small ones. Quit trying to blame everything on Democrats in Congress, it just shows you’re an idiot.
"AIG has heart… AIG has heart…"
I really hope the GOP keeps running with the "hand over all your cash to your betters" idea. It’s a real winner for them! From TPM:
I’ve only had time to read the summary over at Atrios, but if that’s accurate then Holy Shit:
This is going to go beyond bonuses – if they’ve been cooking the books on the "healthy" side of AIG this whole company might be worth less than my 401K right now.
During Liddy’s testimony today, he stated that the majority of the retention bonus contracts were written in 2007. Now, refresh my aged memory: who was president then and thus in charge of the regulatory and enforcement structures for Wall Street?
Let me guess – you’re one of the elite commandos at HA that whines incessantly about Allahpundit being a RINO.
That was President Obama. Are you daft or something? Bush helped bring about wonder decade of growth during the 1990s, he balanced the budget, and single-handedly ended the AIDS epidemic by converting every fag to Christianity. He also ended the disgusting practice of oral sex throughout our God Given land.
Then the DemoRATS stole the election in 2000, declared martial law, ripped the constitution asunder with secret torture and surveillance policies directed at US citizens, and then never gave up office at election time. Traitors.
Where have you been all these years?
Excellent news! It looks like a get to expand my practice into New York Insurance Company liquidation law!
The Federal Reserve and Ben Bernanke knew about the bonuses last fall. Geithner says he found out last week and Liddy thought that he found out the week before. This is not an endorsement of Geithner but the repubs should be calling for Bernanke’s head over this, not Geithner’s.
I blame it on my free-lance pharmaceutical testing during the Sixties.
@Ninerdave: Yeah baby, just the tip, I swear.
Three decades of Conservatives*spit* being nominated and elected to various benches has absolutely gutted statutory/regulatory enforcement.
Getting judges to smack large institutions for inappropriate actions has been mind-bogglingly difficult.
Complain about the "standing" issue on a foreclosure? Most judges will just yell at your client and say it doesn’t matter unless I can show that payments were made.
Complain about "bad faith"? Judges jack you around and come up with excuses to defend the internal practices of the insurer.
Complain about lending practices at a bank, or their internal processes? Judges act terrified of moving a case in a direction toward a Plaintiff’s judgment.
Complain as a minority shareholder about the direction the Board is taking things? The Judge joins in a "Shut up, little man" smackdown.
The Moar You Know
trying to blame everything on Democrats in Congressposting, it just shows you’re an idiot.
@justinb: Fixt for great justice.
Sister Machine Gun of Mild Harmony
Congress asked for the names of the execs who are getting the bonuses. Liddy refused, stating they have been getting death threats as it is. All I can say to that is… good. More please. Let’s encourage them to give back ALL of their bonuses. As it seems a number of those bonuses are going to the London branch, those threats may have to be exported.
The Moar You Know
@Dennis-SGMM: Christ, old man, it was obviously Clinton.
Bush was the one with the flight deck and codpiece and the Star-Spangled Banner and the nuking of France. I think there were some fireworks and Toby Keith did some song that had me driving my jacked-up truck around for three weeks with an America flag tied to the roll bar yelling at brown people. Or maybe I saw that on TV. I’m not real good with facts. But if there was a fuckup with the money, it was Clinton’s fault.
I have no idea why Liddy agreed to help with AIG, and there were times to day I felt honestly bad for the guy. He is getting nothing out of this but shit on, and he is trying to explain how hard it is to unwind these accounts without losing all the people running them, but to no avail. And frankly, I think he is right to feel a little creeped out by all the calls for lists of his employees. Given the public mood, he would be charged as an accomplice once all the grandstanding pols release the names and addresses and these people are lynched.
Meanwhile, Treasury is trying to stick it to Dodd.
I’m seriously to the point where it might be best if the entire system burns down. Just let them all fail. Screw it.
"The Desert Inn has heart! The Desert Inn has heart!"
The repeated threats against AIG executives really are disturbing. It suggests a total lack of organization and planning by that mob. Please stop calling in threats, folks. It only interferes with a proper lynching down the road.
The Moar You Know
@John Cole: It would be one thing if he’d been in charge while all this was going down, but…he wasn’t.
Pillorying Libby for AIGs problems is like blaming Obama for Bush’s fuckups, perhaps even a little more unfair. Obama at least got to vote on Bush’s fuckups while he was in the Senate.
Were I Libby, I would have told Congress to fuck themselves, walked out and let somebody else clean up the mess after the bashing he got today.
So, all this stuff aside, what happens next?
Can we sell off the good parts and prosecute the people in the AIG FP section for fraud?
And seriously, can we stop with all the mega companies? Too big to fail, should be too big to exist.
W explains to the Canadians that "risk takers" will save us from the recession and gov’t is just a boat anchor.
Could we close the border and leave him up there?
If he were more in the "kick ass and take names" mode rather in the "there’s nothing we can do" hand wringing mode, he’d have carried the day. The bonuses did not have to be paid out in such a rush. The crooks and liars just wanted to grab their ill-gotten gains and get the hell out of Dodge. He could have blocked it for the time being.
They’re worse than doctors when it comes to covering each others’ asses.
Crack me up Dennis. Got a good mental picture of them wearing 3-piece pinstriped suits, high hats, spats and monocles, sweating buckshot as they haul their coins out to their black, shiny cars…in front of a jeering crowd of onlookers.
Bunch of crooks and liars all.
Thanks for that.
@Joshua Norton: What I got out of the testimony from Liddy is that EmptyWheel is right. Liddy is dealing with a bunch of folks wearing semtex vests, and he has a chance to wind these accounts down slowly at a loss or the option for all these pricks to walk away and have the accounts blow up.
Liddy seems just like the wrong guy to be picking on.
Yeah, but it would be kind of icky having to rely on a shadowy black market for my complex derivatives.
@John Cole: Good comment. Liddy did a good job explaining how he was winding down the business and he has already rid the company of more than a trillion in debt. Although the bonuses are egregious, Liddy seems like the right person for the job.
Shawn in ShowMe
The same could be said for Geithner and his alleged "complicity" in Wall Street machinations as head of the New York Fed. That’s like blaming the head of New York office of the EPA for our national policy.
What the fuck is this? The government has — still has — the power to eavesdrop on every person in this country without cause or warrant, and to imprison and torture even citizens at will indefinitely and without due process or charges. And yet somehow the government now can’t say no to AIG assholes demanding bonuses?
And the fucking dirtbag goopers who pretended the Constitution was magically suspended and the systematic breaking of laws they engaged in to carry out that spying and torture and secret imprisonment now bitch and moan about the sanctity of fucking contractual law?
What. The. Fuck.
Trying to keep all of the bonus money at least makes for a consistent position ("you gave us the money, it’s ours now to do as we please, screw you"). Admitting that they don’t deserve half the money is absurd — if we take what they deserve into account then it’s obvious that they deserve none.
@25 – Tsulagi for the win! So there’s precedent for recovering the money that execs such as these have, ahem, acquired.
By the way, ain’t this what RICO is for?
Fraud is what this whole thing was about. This piece in the Village Voice (via Digby) explains what AIG’s credit derivatives were really about:
Hell yes the books are gonna be cooked at AIG. It was a 600 trillion dollar scam, one big enough to break the whole world’s economy.
Taxpayers’ money is now paying off these counterparties, who were very likely part of the scam. In other words, the bailout is actually completing the scam for them.
After watching him testify to the house committee today, I have to agree with you John.
But I would like to add that they changed horses in the middle of the stream expressly so that Liddy would at least be able to have the "hapless" defense, the "don’t look at me, I just got here" defense. A strategy to provide him with a sorta ‘plausible deniability’ for occasions such as this.
Because god knows that these moneychangers are giving us the royal shaft with pretty much total immunity (legally with an assist from law makers).
#57 – binzinerator, we want to restore the rule of law, not perpetuate lawlessness.
Surely the laws already on the books are written broadly enough that we can describe their actions in terms of which laws they’ve broken. A motivated prosecutor could make charges stick. (why hasn’t someone tried? the first prosecutor to do it would someday be President of the United States. where’s their sense of self interested ambition?)
Prison time and bankruptcy after a fair trial, not kidnapping and thumbscrews.
We don’t even have to assume that. I’ve heard people say in passing that the worst thieves in AIG left with their gains long ago. Even if they hire entirely new people to unwind the derivatives, they’re going to attract competent people. How eager would you be to go to work at AIGFP just now?
I would feel more sorry for Liddy if he hadn’t publicly announced in November that AIG was cutting back on bonuses.
That’s part of the anger here — it’s not the first time that AIG has been caught playing games with taxpayer money and people are a little dumbfounded that they’d do it again and expect to get away with it.
Andrew Cuomo is working on it. Hopefully he’s smart enough not to rail against prostitution while he’s secretly patronizing them on a regular basis like another Wall Street-busting DA I can think of.
Edit above ". . .they’re going to *need to* attract competent people. .. ."
The edit function doesn’t work for me. I edit the entry under the time limit, and it tells me I don’t have permission to modify the entry.
Yeah, I agree. I just thought his suggestion was funny.
The Wikipedia entry for Joe Cassano shows a successful but technically thin resume:
I don’t mean to be dismissive of him in a classist manner, but wtf? No quantitative education, no undergraduate financial education, not even a freakin’ dime-a-dozen MBA. This master of the universe may never have been more than a bagman.
I haven’t seen anyone comment on AIG’s brilliant tax angle on "ask[ing] the bonus recipients to give half the money back."
Unless disallowed as unreasonable compensation, AIG gets to deduct the full amount of the bonuses– not half, the whole enchilada. The employees have taxable income to the full extent of the bonus as well, and usually the U.S. Treasury is not treated as a charitable organization so as to get you a deduction for giving more than you have to. [Similar pain happens for personal-injury litigants who have to pay full tax on their attorneys’ contingent fees as their own personal income, and then face limited deductibility for these fees.] These buggers just don’t know how to do a square deal, do they?
You are absolutely right Ian. I sometimes fantasize about Tenguphule’ing these bastards, but ultimately I nevertheless would rather see due process done.
But when friends and family I know who had so little, so modest a claim to a piece of the American Dream, and who now have even so much less because of these arrogant bastards, yes I fantasize.
But you are right Ian. I don’t want vengeance. I want justice.