(emphasis mine) [my comment]

AIG plans bonuses to financial-products employees
Payments go to staff at unit that sent insurer to brink of collapse
By MarketWatch
Last update: 1:07 p.m. EDT March 15, 2009

WASHINGTON (MarketWatch) -- American International Group is set to pay $450 million of bonuses to employees of the unit that was largely responsible for the New York insurer's near collapse last fall.

The decision to pay bonuses elicited howls of protest in Washington, which has prevented the failure of AIG by providing the insurer with more than $173 billion in aid. The federal government now owns 80% of AIG. Larry Summers, one of President Barack Obama's top economic advisers, called the payments "outrageous," and a key House lawmaker, Barney Frank, D.-Mass., told Fox News that the government should examine whether the bonuses are "legally recoverable."

Another Democrat, Rep. Elijah Cummings, D.-Md., renewed his call for AIG Chief Executive Edward Liddy to resign.

Liddy, in a letter to Treasury Secretary Timothy Geithner dated Saturday, said AIG had committed to paying the bonuses to employees of the financial-products unit and that they were "binding obligations" the company cannot legally rescind. The first payments are due March 15 [which is today. In other words, AIG Chief Executive Edward Liddy waited until he had sent out the first checks before letting the world know about these bonuses].

"I do not like these arrangements and find it distasteful and difficult to recommend to you that we must proceed with them [If you had provided more warning about these bonuses, congress could have passed a law to make sure they weren’t paid.]," wrote Liddy, citing the recommendation from the insurer's legal counsel.

The payments to 400 employees of the financial-services unit -- some of whom no longer work at the insurer -- were promised last year before the federal government bailout. Bonuses range from as little as $1,000 to as much as $6.5 million.

Summers said the government would examine its options, but he acknowledged it might not be able to terminate prior bonus agreements.

"We are a country of law. There are contracts. The government cannot just abrogate contracts [No, but you can threaten said employees with legal action and jail time if they don’t give up bonuses.]," he said in an interview Sunday on ABC's "This Week."

AIG is already scheduled to pay $121.5 million in incentive payments for 2008 to senior executives and 6,400 of its employees. And AIG is laying out another $619 million for 2009 in retention payments to more than 4,000 employees.

Total expected payments amount to almost $1.2 billion. [Your tax dollars at work.]

Regarding future incentive payments Liddy told Geithner the company cannot retain its best employees if their compensation is subject to "continued and arbitrary adjustment by the U.S. Treasury." If AIG loses its best employees, he indicated, it would make it harder for the company to recover and help the government recoup its investment. [Someone at AIG is responsible for colossal losses, yet, to my knowledge, NO ONE HAS BEEN HELD ACCOUNTABLE. However ]

Liddy also pointed out he won't receive a bonus [Why do you STILL HAVE YOUR JOB?] and that the company cut bonus payments for it senior executives [how much have these bonuses been cut? 10%? 5%?]. The top 25 executives in the financial-product unit, moreover, have agreed to accept a salary of just $1 for the rest of 2009, his letter said. [but how much are their bonuses? What kind of compensation are they getting on top of their salaries?]

AIG nearly collapsed under the weight of contracts that the financial-products units sold to protect other institutions against losses from securities backed by subprime mortgages.

Since so many financial firms around the world were insured by AIG, the failure of the firm could deal a devastating blow to the global financial system, Treasury and Federal Reserve officials say in justifying the most expensive bailout ever.

Slate reports about AIG’s bonuses for ruining the economy.

Bonuses for Ruining the Economy
By Roger McShane
Posted Sunday, March 15, 2009, at 6:10 AM ET

The Washington Post broke the story, but it's the only paper not to lead with "bailout king" AIG's plans to pay out about $165 million in bonuses to 400 employees in its financial products division. Yes, the New York Times reminds us, that is "the same business unit that brought the company to the brink of collapse last year." Or, as the Los Angeles Times puts it, the division that "created trillions of dollars in murky financial obligations," leading to government fears that "the entire financial system might collapse." A commenter on the NYT's Web site sums it up well: "This is so outrageous it is almost humorous."

While fronting AIG, the Post leads with the startling news that at least 3 percent of Washington, D.C., residents have HIV or AIDS, "a total that far surpasses the 1 percent threshold that constitutes a 'generalized and severe' epidemic," according to a report to be released on Monday. That leaves it on par with Uganda and some parts of Kenya, says Shannon Hader, director of the District's HIV/AIDS Administration.

The NYT and WP begin their articles on AIG with anonymous accounts of the Obama administration's "deep consternation" and "outrage" over the bonuses, resulting in a "confrontation" between the firm's chief executive and Tim Geithner on Wednesday. Only the LAT gives early mention to the fact that the payments have "the grudging consent of the Obama administration." Geithner may have thought the bonuses were "unacceptable" last week, as the WP and NYT dutifully report, but he eventually came around to the opinion held by Edward Liddy, AIG's government-appointed chairman, that the company was legally bound to make the payments.

In a letter to Geithner, Liddy justified the bonuses by arguing that AIG would have trouble attracting and retaining talent "if employees believe their compensation is subject to continued and arbitrary adjustment by the U.S. Treasury." Aren't most Americans now accustomed to continued and arbitrary adjustments to their wealth? The LAT notes that Liddy's statement amounts to an anger-inducing yet logical concern that "AIG's losses … could spiral enormously if the only people who understand the company's convoluted dealings are not around to 'unwind' the damage they have caused." [Perfectly captures the absurdity of the situation.]

If AIG's financial employees did seek employment elsewhere, there's a good chance it would be at one of the firm's trading partners. Ironically, these companies are only still in business thanks to the government's rescue of AIG. But, despite repeated inquiries from Congress, the government won't say which companies received bailout money via AIG. The NYT says "the secrecy is unacceptable."

My reaction: Paying bonuses to the employees of AIG's financial-products unit is obscene and absurd. Wall Street's Psychology Of Entitlement is simply unbelievable. However, instead of going on a rant myself as to just how outrageous this is, I am going to let others do it for me.


Below are some of the 940 Comments made in response to the MarketWatch article above. I believe these comments adequately capture the outrage at this travesty.

magicbullet
Not one penny of bonus money should be paid to these AIG crooks.

I dare any one of them to show their face at the bar of justice and declare to the American taxpayers they are owed these bonuses.

Let me know the time, date, and location of the hearing.

dusanlasak
The one who had written / set-up and then signed these contracts should be put into jail. It is totally clear tunneling - nothing else.

US and world-wide tax-payers sheep are going to pay it. Work more, pay more taxes, loans, interests, work more, more, more ... CHOOSEN ONES ARE LAUGHING. What an excellent modern slavery ages.

Americans, take your legally owned guns and stop this madness !!!

js33
This needs to stop now. It's not funny anymore. I expect soon some armed gunmen will arrive at AIG headquarters and open fire.

averageguy175
What's the address?

js33
AIG
70 Pine St.
New York, NY 10270
MapQuest

Repomex01
We need to MOBILIZE!!!!!!!!!!!!!!!!

glenn999
Bonus are generally paid to people who have created a profit for their company. NOT when the company has been run into the ground and I am paying to keep it afloat. A bonus taker is a traitor.

bigal333
They should be put into jail.

Azul54
Binding contracts? So what! These clowns flew AIG into the side of a mountain and the US taxpayer was along for the ride. Let these executives sue if they think they still deserve this money. See you in court.


roadtripman
Geez, I hope they all gather in Hawaii, or some nice sunny spot to dole out these bonuses. It would so much better than a rainy day in the city. Perhaps a few taxpayers could go and shake their hands? Who says white collar crime doesn't pay? Who has gone to jail?...oh, that's right, no one.

djb1953
Don’t give a penny to these b******* and challenge them to take the company to court. Let’s see if they have the guts to do it. This is now getting beyond a joke. This is how revolutions start in most countries when the rich become so greedy that they think nothing of destroying everything as long as their fat bellies are continuously filled with the sweat and toil of honest hard working 90% countrymen.
Perhaps we do need a revolution to get rid of these greedy bankers once and for all.

Gbailey
These rats deliberately waited until early morning (EDT) Sunday to let this out.

Maybe no one will notice. [I don’t think something this obscene will slip by unnoticed, but I could be wrong.]


MSkywalker2000
This is completely and utterly absurd. The company is bankrupt five times over yet still fantasizes about 'bonuses'. Addicted, anyone?

To rectify the situation, I would suggest all responsible professionals current and past, bear their financial share of losses incurred under their 'management'.

The system itself obviously remains broken; they are the crooks who created the financial meltdown, yet still feel entitled to payouts, while we dearly pay for their mess??? As long as they do not have to change, the crisis will keep smoldering along.

Plus, the argument that bonuses are to 'retain' people is flawed in itself - where would they go in the current climate? Lehman? Sure, I would love to stay at a company that keeps paying huge bonuses in the wake of hundreds of billions of losses. Sounds like paradise - no matter how you manage you shop you always win. And, very obviously, they have fared extremely poorly, as poorly as I can ever imagine.

Realgara
They wouldn't have even had any wages if they hadn't been bailed out, this is obscene.

MW4263
If you think this is outrageous then just wait until B of A, Citi, Big Three, and all other "Free Money Parasites" make their way back to the "Dead Cow" for more blood !!! It's coming, bet on it !!!!!!

Tycoon
Like all governments the Aussie government wastes taxpayers hard-earned money, but I have to say that it's at times like these I feel thankful I am not an American taxpayer. You poor b*stards, I feel sorry for you. But, seriously, this is way, way beyond any joke. This sort of thing is screwing the US economy and the entire global economy with it. If I had to pay for this I would be incandescent with rage.


flipspiceland
According to the article the very people responsible for the mess are getting bonuses.

Who offers a performance bonus for failure?

Let them sue if they think they their contract was violated.

Make them take it to the Supreme Court.

leserp
The fleecing of hardworking Americans continues. Confiscate these bonuses and start a fund to finance the soup kitchens around the nation. The lines will be growing longer for years to come.


NevadaMP
finally fully understand the rage, and glee of those who attended Madame Guillotine in the Place de la Concorde in Tale of Two Cities. [My favorite]
........just an aside.......

alfamagnate
A Travesty

althusius
The structured financial products division is located in London. This means most of the bonus money is going to foreign nationals. This is outrageous. The London office should be closed. There are plenty of jaded, incompetent bankers in New York. [Now that is interesting. The London’s financial center, called “the city”, seems to be responsible for a lot of the madness which wrecked the global financial system: SIVs/VIEs (banks’ off-balance financial vehicles) were set up in London, overleveraged European banks invested in US through London, London was ground zero for the credit default swap market, nearly all central bank gold leasing happens in London, etc…]

jubispupper
This is why AIG should go bankrupt to avoid such insane things.

gofer
are they lunatics? why pay bonuses to incompetent people. replace the management immediately!!!!!!!!!!!!!!!


survivor
The way it is going, our national financial debt will reach $100 trillion in a few months if we keep pampering employees of these government-owned institutions. They should receive same amount of pay as other Federal Institutions. I don't understand, with the collapse of Wall Street giants like Lehmann Bros. there should be people lining up for jobs. Yet AIG is talking about retaining people and applauding their lack of achievements by doling out more government money.

stkinvestor
We are paying 1/2 a Billion Dollars of Taxpayer money directly into the pockets of the people that caused this mess.

Un F*******ing believable. I've about had it with this d*** country. Our govt is worthless.

bzz
AIG ....American international losers.
Who can you stop this ?
How many times GM and Chrysler could be bailout with the money AIG received ??? ( I'm not agreed with GM & Chrysler bailout at all but ...)
Did you heard anything about a restructuring plan or something ?
Why they are getting taxpayers money so easy ???
Why doesn't pres Obama has nothing to say about it ???
Is this the change we need? From now on all the big losers will be bailout . ( ...and i am an Obama supporter )
I wouldn't be surprise if someone with a shotgun comes one they in AIG building ...

vmc
Fron the NY Times. “We cannot attract and retain the best and the brightest talent to lead and staff the A.I.G. businesses — ...” Liddy wrote Mr. Geithner on Saturday.

First off, this nonsense is from the government appointed chairman of AIG. Another selfish Wall Street jerk appointed to oversee the other jerks.

Secondly, once and for all can we stop calling the people who brought this country to our knees, the best and brighest. They are neither bright nor the best of anything.

America's best and brighest are our teachers, police, fireman, FBI, customs & border patrol, and other dedicated people who either put their life on the line daily or are working to build or protect our nation or teach our kids. These are our best and brighest.

And not the selfish, greedy, Wall Street s******* who are only out for themselves.

Lastly, AIG, you need to pay every cent back to the American people first, before you start rewarding yourselves for failure. What arrogant idiots! Wake up, that's how you got in this position. Apparently you are the only ones that think that failure should be rewarded. The taxpayers don't agree with you.

Atlas Shrugged
While Bear Stearns was collapsing, Goldman Sachs boasted that it had insulated itself by buying insurance against the mortgage-backed derivatives. As it turns out, it was, in fact, rescued by the Fed when it bailed out AIG. In 2007, Lloyd Blankfein, Goldman Sachs’ CEO, received $70 million in compensation, including bonuses, $27 million in cash. A Democrat, he contributed $7,000 to Hillary Clinton’s presidential campaign. At the time the New York Fed came to AIG's assistance, Secretary of the Treasury Timothy Geithner was its head. Blankfein is still drawing down millions in compensation. The rationale for his compensation is the alleged profitability of Goldman Sachs, which raked in over $9 billion in 2006. It should also be noted that the bailout stopped Goldman stock from plummeting, thereby protecting not only Blankfein’s fortune, but that of Hank Paulson, the former chairman of Goldman Sachs, who was Secretary of the Treasury under George W. Bush. This is perhaps the greatest financial scandal in American history but most Americans are totally ignorant of it.

tomtaxpayer
Enough is enough! Geithner must resign or be fired immediately! Taxpayers can no longer afford his incompetence.

Geithner as President of the NY Federal Reserve is a principal architect of the AIG bailout [True, as head of the NY Federal Reserve, Geithner was involved with all the bailouts.], and established the terms and conditions of the AIG bailout along with co-conspirator former Treasury Secretary Hank "the mole" Paulson. Now Geithner as Treasury Secretary pretends he is surprised and must give in to bonus demands from the government's own appointed AIG chairman, Edward M. Liddy. Outrageous! It was Geithner's and Paulson's job to put terms and conditions on the AIG bailout to insure these type of shenanigans and "surprises" don't occur. Even now, Geithner has options to call Liddy's bluff and stop this rape of the taxpayers, but Geithner has failed and is content to take the crumb Liddy threw him: AIG will behave better next time [Doesn’t everyone feel better, AIG will behave better next time!], after AIG finishes raping the taxpayer this time".

HOBOJOE
Boy, did we shoot ourselves in the foot when the Fed labeled them too big too fail. AIG is blackmailing the US. And Liddy is running a Ponzi scheme worse than Bernie Madoff.

If we let AIG go bankrupt, will they still pay these bonuses and retention package? Why is the Government still subsidizing these losers? It seems to me that we are more afraid of AIG than Bin Laden. Somewhere along the line, we lost our marbles.

Insightfool
AIG pays out $450 million in bonuses.

There's nothing about the above sentence that makes sense. It is illogical at best. AIG is the same company that recorded the largest corporate lost in WORLD HISTORY. It LOST $61.7 billion in the 4th quarter of 2008. Before we can think about BONUSES, we should first ask ourselves the following questions.

1. Why is AIG still in business?
2. Why weren't the sustainable business units of AIG taken over by companies that employ competent management?
3. When the US decided to bailout AIG, why wasn't the entire executive staff at AIG fired?
4. Isn't AIG still holding credit default swaps worth sums of money that they cannot afford to settle?

The bonuses are justified by the CEO as a means to retain "talent". Losing $61.7 billion in a quarter is not what I would consider talent. There are humble citizens across the globe working hard to justify salaries of $10 per hour or less. The incompetent executive staff at AIG made some very bad and costly decisions. They are not only still employed, they are partying and paying bonuses with hard earned tax revenues! This is beyond nonsensical. This is an outrage!

I would like to end with the following bit of trivia courtesy of Wikipedia:

Bonnie and Clyde were notorious bank robbers during what is sometimes referred to as the "public enemy era" between 1931 and 1935. During the Depression bankers became so unpopular that bank robbers, such as John Dillinger, became folk heroes. [now I understand why]