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SMALL BUSINESS
AIG Planning New Round of Bonuses
AP
posted: 138 DAYS 6 HOURS AGO
filed under: Financial Crisis
After its bonus payments ignited a firestorm of criticism
earlier this year, American International Group Inc. is asking the
federal government to weigh in on the insurer's plan to resume
paying millions in promised retention incentives next week,
according to media reports.
AIG, once the world's largest insurer, has asked the Obama
administration's compensation czar, Kenneth R. Feinberg, to approve
the payments in order to head off any public outrage, The
Washington Post reported Thursday evening.
While the company isn't required to get the government's
blessing because the payments are actually for 2008 employment
contracts, the newspaper said executives are reluctant to move
forward with installments coming due next week without official
approval.
Feinberg has the power to reject pay plans he deems excessive at
companies which benefited from large infusions from the
government's $700 billion bank bailout fund. Feinberg also has
authority to review compensation for the top 100 salaried employees
at those firms. AIG is among the companies whose pay practices the
government now oversees.
New York-based AIG remains the focus of intense scrutiny, after
becoming one in a string of corporate calamities and a touchstone
for public fury. The huge volume of credit default swaps - a form
of insurance against bond defaults - sold by AIG, coupled with
rising levels of defaulted mortgage and other debt, threatened the
company's existence and prompted the government to step in.
Government aid to AIG totals about $180 billion.
The $450 million in bonuses that AIG allocated in 2008 for
employees, including to traders in the financial products unit that
brought it to the brink of collapse, fueled public and
congressional outrage. The first installment of those payments
earlier this year sparked legislation in Congress to slap punishing
taxes on big bonuses at AIG and other companies bailed out by
taxpayers, though the Senate didn't act on that plan.
Copyright 2009 The Associated Press. The information contained in the AP news report may not be published, broadcast, rewritten or otherwise distributed without the prior written authority of The Associated Press. Active hyperlinks have been inserted by AOL.
2009-07-10 06:26:48
COMMENTS ( 44 )
THURSDAY APRIL 30, 2009 05:35 EDT
Top Senate Democrat: bankers...... "own"....... the U.S. Congress.
Sen. Dick Durbin, on a local Chicago radio station this week, blurted
out an obvious truth about Congress that, despite being blindingly
obvious, is rarely spoken:
"And the banks -- hard to believe in a time when we're facing a
banking crisis that many of the banks created -- are still the most
powerful lobby on Capitol Hill. And they frankly own the place."
The blunt acknowledgment that the same banks that caused the
financial crisis "own" the U.S. Congress -- according to one of that
institution's most powerful members -- demonstrates just how extreme
this institutional corruption is.
The ownership of the federal government by banks and other large
corporations is effectuated in literally countless ways, none more
effective than the endless and increasingly sleazy overlap between
government and corporate officials.
Here is just one random item this week announcing a couple of
standard personnel moves:
Former Barney Frank staffer now top Goldman Sachs lobbyist
Goldman Sachs' new top lobbyist was recently the top staffer to Rep.
Barney Frank, D-Mass., on the House Financial Services Committee
chaired by Frank. Michael Paese, a registered lobbyist for the
Securities Industries and Financial Markets Association since he left
Frank's committee in September, will join Goldman as director of
government affairs, a role held last year by former Tom Daschle
intimate, Mark Patterson, now the chief of staff at the Treasury
Department. This is not Paese's first swing through the Wall
Street-Congress revolving door: he previously worked at JP Morgan and
Mercantile Bankshares, and in between served as senior minority
counsel at the Financial Services Committee.
So: Paese went from Chairman Frank's office to be the top lobbyist at
Goldman, and shortly before that, Goldman dispatched Paese's
predecessor, close Tom Daschle associate Mark Patterson, to be Chief
of Staff to Treasury Secretary Tim Geithner, himself a protege of
former Goldman CEO Robert Rubin and a virtually wholly owned
subsidiary of the banking industry. That's all part of what Desmond
Lachman -- American Enterprise Institute fellow, former chief
emerging market strategist at Salomon Smith Barney and top IMF
official (no socialist he) -- recently described as "Goldman Sachs's
seeming lock on high-level U.S. Treasury jobs."