US taxpayers to hand AIG execs $165 million in bonuses

AIG, the insurer rescued by the US taxpayer (cost: $170 billion) plans to hand out $165 million in bonuses, claiming they must honour legally binding contracts. Senate Minority Leader Mitch McConnell, speaking on ABC’s “This Week,” said: “The message here, I’m afraid, to any business out there that’s thinking about taking government money, is let’s enter into a bunch of contracts real quick, and we’ll have the taxpayers pay bonuses to our employees.”

President Obama has instructed the Treasury Department to “pursue every single legal avenue to block these bonuses... In the last six months, AIG has received substantial sums from the U.S. Treasury,” Mr. Obama said. “How do they justify this outrage to the taxpayers who are keeping the company afloat?”

AIG has so far declined to identify the employees receiving the bonuses, some of whom are thought to work from offices in London. Andrew Cuomo, the New York attorney general, said he would subpoena AIG for the names of employees receiving the bonuses.

It is unknown if US legislators, who have the power to amend the law so these secret contracts become void, will just sit on their hands while the architects of the recession are rewarded with tax dollars. Many of these same legislators were involved in passing laws to deregulate the finance sector, causing the recession and making it possible for these bonuses to be paid. (17/3/09)