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AIG takes advantage of a Loophole in the Omnibus Bill that allowed Large Retention Payments to be made

Thursday, March 19, 2009

According to a CNN report, Treasury Secretary Timothy Geithner claims that the Department of the Treasury communicated with Sen. Chris Dodd about a clause he put forth in the stimulus legislation that would have strictly limited executive bonuses.
If a major corporation like AIG can find a loophole to take advantage of the bailout money, they would be able to pay out large bonuses. And they did. For for a company that had to be bailed out to stay afloat, they have to nerve to do such a thing using taxpayers money.
The problem with AIG is that they are now so interwoven in this countries economic situation, that the loss of a company such as them would be devastating, especially since they now have already taken a considerable amount of bailout money.
As you could expect, President Obama is furious, and in another press conference, he puts the blame squarely on himself, saying that he should have seen it coming. It is my opinion of this editor that President Obama will demand monies in the amount of the bonuses paid back. This company should not be able to get away from the atrocities that they are creating, causing havoc in the financial markets.
Unfortunately, it's what you don't hear about is what is scary. What you may be hearing can be just a cover up for something worse. What other companies are doing the same thing, and why does the government let these companies get away with it?
So how did AIG get away with it? The bill had included a measure from Dodd to limit executive bonuses. But slipped inside at the last minute was an exemption for bonuses agreed to "on or before February 11, 2009." That allowed AIG to go ahead with its controversial extra pay.Edward Liddy called the roughly $165 million in bonuses "distasteful" but necessary because of legal obligations and competition.
"I've asked those who received retention payments in excess of 100,000 or more to return at least half of those payments. Some have already stepped forward and offered to give up 100 percent of their payments," said Liddy, who joined AIG after the bailout.

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