American International Group plans Wednesday to pay another round of employee bonuses, worth about $100 million, said several people familiar with the matter, a year after similar payments at the bailed-out insurance giant infuriated many Americans and inflamed Washington.
The US government owns 80% of AIG. Lots of figures and percentages appear in the Washington Post article, but that one doesn’t. And while pay czar Ken Feinberg’s name appears throughout the piece — he seems to have played some role in approving these bonuses — the names of the three trustees charged with overseeing the government’s 80% stake are nowhere to be found. Search for their names on Google News, and you find no recent articles mentioning the trustees in the context of this decision. Did they not play a role in this decision?
The trustees — Jill Considine, Douglas Foshee, and Chester Felberg — were handpicked by Geithner’s New York Fed to oversee AIG in late 2008. So blame Geithner, but more important, blame their network of bankers and wise men, led by Robert Rubin, that dominates nearly every elite financial policy post in Washington (but not all of them, as CDouglas reminds us).
One can only imagine the twisted logic that leads people like Timothy Geithner to think it’s ok to pay employees of a government subsidiary $100 million in bonuses. I wouldn’t put it past them to argue that elite government officials are actually vastly underpayed in their government posts, given their special value to our economy, and that the AIG payments are actually a more efficient and equitable form of compensation for government employees.
Publicly, Feinberg, Geithner, and company talk about special legal agreements and such that prohibit them from cutting these payments, about the country having an interest in AIG being profitable, about how these employees need to be paid well, or they’ll flee to better-paying jobs.
These jobs exist, in fact, (unlike most other sorts of jobs) thanks to the financial bubble planning skills of folks like Geithner and Summers, which have propped up a whole range of Ponzi banks and hedge funds. Ironically, many of these funds limited redemptions at the time of the AIG outrage last year (DE Shaw, for instance, where Summers
earned made $6 million). Round and round we go.
I would *love* to see how these excuses poll with the general public. Who really buys them? Did anyone actually believe Feinberg when he told Good Morning America that the government is using “whatever leverage we have to get as much of that money back.” What a laughable claim. The government should not be talking about the “leverage” it has over a company that is 80% owned by the US government. AIG *is* the government, and vice versa.