I'm glad to see the AIG terorists have negotiated their demands with the treasury department. Instead of agreeing with these guys, why not freeze their funds a set the lawyers loose to manage what's left.

Oh no, I think they do get it. This is "hush money" to keep employees from talking, not walking.

The media (Gretchen Morgenson of the NY Times among others) are trying to find out where the AIG bailout money is going. Think of "off the record" information provided by lower-level employees. Someone already spilled some beans about derivative counterparties AIG has already paid: Merrill Lynch, Morgan Stanley, Deutsche Bank, Barclays, Royal Bank of Scotland, Lloyds Banking Group, two French banks, Bank of America, Wachovia (not a complete list) and -- no surprise -- Goldman Sachs Group. The unofficial list was published in the Wall Street Journal on March 6, 2009. And now, voila, big bonuses for AIG employees.

And there's more bad news in the pipes. The Newshour with Jim Lehrer did a piece on March 10, 2009 about the sale-leaseback agreements many public transit agencies made with banks and insurance companies, including AIG, to purchase rail cars. Typically these agreements require that the insurer remain solvent. So when AIG went bust, the banks started declaring technical defaults and the transit agencies became liable for penalty payments, often in the millions of dollars, even though they had made all of their lease payments. Some of the transit agencies asked Congress to back up these agreements but the proposal was voted down last November.

Piracy takes many forms.
Many have said this for a long time, "the real terrorists wear suits and ties".

They don't need to get it. They got it.

Did the secret counter parties to AIG insist that it was the government's duty to insist that AIG maintain a reserve, similar to that for a face-amount certificate company (see Sec 28 of the Investment Company Act of 1940), and that such failure to regulate means that the huge sophisticated/unsophisticated speculators/investors must get their diapers changed by someone other than themselves?

If I promise to deliver to you the Moon does it really matter whether we call such promise an insurance agreement an investment opportunity or pie-in-the-sky euphoria?

Nationalization, rather than demanding a reserve, is itself fully compatible with the notion of running a public diaper service for well-to-do private whiners. The public at large should not have to transfer, or promise to transfer, any tax revenue to cover the private loss for anyone that has taken private capitalist risk.

“We cannot attract and retain the best and the brightest talent to lead and staff the A.I.G. businesses — which are now being operated principally on behalf of American taxpayers — if employees believe their compensation is subject to continued and arbitrary adjustment by the U.S. Treasury,” he wrote Mr. Geithner on Saturday.

Obviously the "best and brightest" wasnt cutting it. Seriously, if the ones running the place were the best, thats pretty friggin sad.

And Im sorry, but there is absolutely no reason for someone to have a salary of more than a million a year. And that's being extremely generous. I mean seriously, how much do you really need? How much is enough? You cannot tell me a CEO who gets paid $10 million a year is 100 times better than a CEO making $100k? I bet they could easily do each other's job. (hell, most of us could, how hard is it to attend meetings and play golf?)

And AIG isnt playing with their own money any more, its taxpayer money. So yes, we get to say who gets what.
If they insist on the bonuses, take the money back.

It would be really really really fun for the 80% owner of AIG - (US) - to havea special stockholders' meeting and direct our managers to refuse to pay the bonuses. Period.

Contractually obligated bonuses my foot!

Let the recipients anticipating the bonuses sue.

I really really really want to "rack 12" and have the bonus babies try that to a jury.

Can you say "jury nullification"?

Just a comment from the real business world.

Suppose a company with an 80% owner got into deep financial trouble. Suppose that the owner wanted to reduce bonuses, despite contractual obligations.

Just ask for voluntary waivers of the bonuses. Most people would go along. If they did not, consider implementing salary cuts.

Anyone who did not go along would know that his/her career was shot. Not a team player. The people who did not go along would never see another bonus.

The government officials are been played for fools.

The current AIG chairman and CEO, Edward M. Liddy, was selected by former Treasury Secretary Hank Paulson as part of the AIG bailout. Liddy used to be chief executive for Allstate but also a director on the board of Goldman Sachs Group until last September when he was put at the helm of AIG.

Between mid-September and to (or through) December 2008, AIG doled out $50 Billion to banks and other financial institutions for losses related to derivatives. According to unofficial reports, the two biggest recipients -- $6 Billion each -- were Deutsche Bank and (play fanfare) Goldman Sachs.

Some Wall Street analysts are writing that something stinks here: that the whole point of the bailout is to save Goldman Sachs or to provide a backdoor taxpayer bailout to banks and financial institutions. And some of them are double-dipping, receiving TARP money from Treasury and also bailout money through AIG for losses. Sounds like money laundering to me.

Instead of worrying about the revolving door for lobbyists, maybe the Obama administration should look at the revolving door for anyone ever connected to Goldman Sachs.

Some official numbers released by AIG today:

AIG collateral put up to meet obligations for credit default swaps -- $2.5 Billion to Goldman Sachs

Purchase price paid by AIG affiliate Maiden Lane III to buy securities backing credit default swaps -- $5.6 Billion to Goldman Sachs

Is this all, or is there more?

Many bonus plans I've seen are written so that payout requires a board resolution -- so much for the "contractual obligation" argument. As to the value of bonuses to the business: fear is a much more powerful motivator than greed. Cheaper, too.

Nobdy really expects the executives of AIG to be anything other than voraciously greedy, mindlessly selfish, lavishly wasteful and relentlessly predatory. The big quesiton is what kind of backbone does the Obama administration really have?

I don't think they'll actually "get it" until they see folks setting up a guillotine in the public square. Maybe not even then.

EP: Don't expect much backbone from the Obama financial team. About half of the upper level Treasury people haven't even been named for appointments yet. Despite the fact that we're in a serious recession; and umeployment numbers continue to rise.

Maybe we're the ones who don't get it. Now there's an unsettling thought.

It's not an original thought, but: these bonuses are stimulative. Recipients will be enhancing their home security systems, hiring bodyguards, and uparmoring their limo's.

Due to the complete way that the US Government is spending YOUR MONEY do you see the similarity in Uncle Sam and Robin Hood…only in a reversed role? He robs from the poor to give to the rich. WAKE UP ALL OF YOU SHEEP! Bahhhhhh Bahhhhhh