The AIG Bonus Scandal
Tonto, the Lone Ranger's companion would always say: "White Man speaks with forked tongue." I would say: Senator Dodd was Tonto speaking of you? Dodd has no idea of what the word truth means. See what just $103,000 can buy? $165 million in unearned and undeserved bonuses.
[Genesis Of The Financial Meltdown]
There appears to be much screaming and gnashing of teeth concerning the $450 million in bonuses paid out to AIG employees, including $165 million in payments that have been guaranteed to the employees who were responsible for the downfall of AIG.
This $165 million is supposedly a "retention bonus" to be paid to 73 employees of AIG's financial-products subsidiary. Usually bonuses are paid to employees of financially profitable corporations; but not here. Unless one concludes that these employees of AIG enabled Goldman Sachs to remain a profitable corporation. It was subsequently revealed that Goldman received $12 billion from AIG, as payment for the credit default swaps which Goldman had purchased. It's the whole credit default debacle that has brought AIG to its knees in the first place.
Wait a minute. Weren’t these financial geniuses employed by AIG and not Goldman Sachs? And AIG lost money on these trades. So then why are they being rewarded with "bonuses"? Is there a new definition of bonus that we haven’t been told of.
Then we have Senator Christopher Dodd, that oy vey exemplar of moral standards and opacity who is now leading the outcry over these undeserved bonuses. Sen. Dodd has forgotten one important lacuna of information. It was Dodd, that oy vey cheerleader of financial innovation, who permitted the amendment that granted these individuals their retention bonuses to be inserted into the TARP bill.
This provision, the "Dodd Amendment" provides an "exemption for contractually obligated bonuses agreed on before Feb. 11, 2009." This provision specifically exempted AIG employees, a so-called bill of attainder that granted favorable terms to individuals near and dear to the heart of Dodd.
In all fairness the executives receiving $165 million of this bonus retention money were employed by the AIG financial-products subsidiary, which is located in Wilton, Connecticut. Guess which state Dodd represents? You guessed it: Connecticut. So Dodd is merely bringing home the bacon to Connecticut and to his campaign contributors.
Now I do not wish to pull a John Stewart on Dodd, as Stewart did with Jim Cramer on national television, exposing the "Mad Money" host as possible a "Mad Man" deliberately peddling stock scams.
Yet, Dodd was always a cheerleader for "financial innovation"; whether it be accomplished by Fannie Mae or AIG, those paradigms of financial sobriety—oops at the mention of sobriety. AIG was so enamored of Dodd that Dodd received $103,000 in campaign donations during the 2008 campaign cycle from, yes you guessed it, AIG, according to published accounts.
Dodd, who had some mortgage problems of his own with two mortgages from Countrywide, has always praised "financial innovation." As long as the innovators donated to Dodd's treasure; oops, campaign chest.
Dodd was even listed on a "Friends of Angelo List." Angelo Mozilo, who was Chairman of Countrywide, a large manufacturer of subprime loans, which had to be taken over by Bank of America. Dodd was able to refinance his Connecticut home and his Washington home at favorable interest rates.
This group of financial geniuses at the financial products subsidiary have cost the American public a minimum of $170 billion. Dodd probably believed that the employees of AIG deserved the $450 million in bonuses for their financial creativity and ability to manufacture losses. Oh yes, three AIG executives Douglas Poling, James Haas and Jonathan Liebergall donated to Dodd's campaign.
Yet, we’re to believe these contributions played no part in Dodd's decision. After all the employees of the financial-products subsidiary managed to bring down one of the largest American corporations; and that took quite a bit of financial creativity.
Aside: Does anyone remember when America could actually manufacture products, which you could drive, see and feel and not ephemeral financial products?
When I was young there was a very popular children's program that could be viewed on television Saturday mornings. The program was the Lone Ranger. The Lone Ranger was always accompanied by Tonto, a Native American.
It is the wisdom of Tonto, which must be quoted at this juncture. Tonto would always say: "White Man speaks with forked tongue."
I would say: Senator Dodd was Tonto speaking of you? Dodd has no idea of what the word truth means.
See what just $103,000 can buy? $165 million in unearned and undeserved bonuses.