I agree that you need the bastard, but aren’t there any other legal avenues for keeping him around to fix the problem he created?
Civil lawsuit, etc? IANAL, so I don’t know what legal tools are available.
If I am totally reckless in my job and my company nearly goes under, doesn’t my company have any way to make me “pay” for it? The only thing they can do is fire me?
IANAL
I am pretty sure that under our laws you cannot force anyone to work. That smacks of slavery. Want that person to stick around and undo his mess? You need to convince him it is worth his time. Worse, I heard (again no cite) that these guys are being actively courted by other firms. They WANT them there. Sure they built a house of cards but it takes some pretty smart people to collapse the world economy. Guess other places want that sort of brilliance. So, if AIG wants to keep them they need to sweeten the pot.
Unfortunately these guys did not break any laws that I am aware of else by now I think someone would be after them. The government eased restrictions and they played the game under the rules made for them. They did their jobs and for awhile were making gobs of money. Even if you could prove that they knew this was a house of cards and would come crashing down where is it incumbent upon them to stop short of their own (obviously lacking) morals and ethics? It is like playing football…you can tackle someone VERY hard and do so within the rules. If you break the other guys leg doing it well…that’s the game.
It is hideous on many levels but there you have it.
Funny thing about Liddy is that when he was at Allstate he axed a bunch of their agents when earnings went south. They sued, the Equal Opportunity Commission sued, and Allstate came out on top.
I’d like that Edward Liddy to please stand up.
http://www.chicagotribune.com/business/chi-greising-aig-liddy-mar16,0,4836148.story
From ABC:Will Obama, McCain, Dodd Return Contributions From AIG Employees?
My favorite line from the hearing was from Gary Ackerman, who called credit default swaps “I Can’t Believe It’s Not Insurance!”.
I agree with the OP that under the circumstance, Liddy handled himself well. You should remember that he wasn’t in charge during the meltdown.
Most of the questioners were…well, clueless. They kept trying to score political points (either against AIG and for themselves with the voters or against the other party). They kept asking the same questions over and over, kept saying stupid things even after Liddy had corrected them and explained to them. How he was able to keep his patience and kept answer the same stupid questions over and over, kept answering in the face of political grandstanding…well, it’s more than I could do. About the 3rd time I had to answer the same stupid question I think I would have just blown up.
-XT
When Liddy was told he was being deliberately offended he should have pointed out a number of things:
AFAIK Liddy has operated in full transparency and this letter to Congressman Cummings (Dec 05, 2008) specifically addresses everything regarding the matter.
I’m reluctantly starting to sympathize with Liddy. He wasn’t in charge when this all went down…he’s basically doing cleanup. His compensation is $1…he’s not milking anything here personally. It really was Congress and Bernanke who fucked this up by allowing those bonuses to be paid. And the arguably Honorable Gentlemen are really being obnoxious to him (and I’m more than half-convinced that it’s a play for the cameras (and, by extension, the voters) more than any real concern over the situation).
When a dyed-in-the-wool “fuck the banks” liberal has sympathy for a CEO, I know someone ostensibly on my side is really making a mess of things.
Can Congress legally vote in the special tax to claw back these bonuses? Or rather, would such a law hold-up in court?
Seems like a Bill of Attainder which is prohibited by the Constitution:
Article I, Section 9, paragraph 3 says that: “No Bill of Attainder or ex post facto Law will be passed.”
Since IANAL on looking it up I found this:
So, while I despise the thought of these creeps getting paid substantial sums to deal with the mess they made that kind of reads to me like Congress is intent on targeting a specific group and undoing the obligation of a contract after-the-fact.
What kind of work did a perform to earn a 6.5 million dollar bonus? Would he have screwed around if they just gave him 3 million? There is no justification for multiple million dollar bonuses ,other than an exaggerated sense of self importance and value. The wages they make are horribly distorted. It is time for them to come back to earth.
I’ll be impressed when they don’t need anymore of my money.
I share your anger but it apparently does not work like that. One would think these guys would be persona non grata on Wall Street and would be begging and falling over themselves to keep their jobs at AIG.
That does not seem to be the case at all:
The problem is that getting rid of these guys would mean having to hire new guys who would take months to get a handle on the mess at AIG before being able to even begin to resolve the problems. That is time AIG really does not have. So, it behooves them to keep the guys who built the mess in the first place to undo that mess since they are already intimately involved in the whole thing.
Unfortunately, as noted above, these guys may very well have lucrative other opportunities and like the rats they are want to leave the sinking AIG ship for sunnier places. So, AIG is left in the unenviable position of having to pay the very people who screwed them in the first place just to get partially unscrewed.
Sickening I know but that is how it looks.
These were really their salaries. Now 'tis true that they are extremely highly compensated employees and that the whole system that creates such a high pay structure for these people is a bit distorted (which becomes apparent most as things go so south) but these pay-outs are not really bonuses for good performance; they are pay for a certain sort of expertise, expertise that is still needed.
Be impressed…at least provisionally…then. They were talking about the final $30 billion being held for AIG. When asked how much of that money AIG will need in the future Liddy basically said something like ‘We don’t expect to need any of it. It’s there as a reserve and to keep our credit rating high so that we don’t start a downward spiral. At this time we hope not to have to use any of it’. Obviously this isn’t a quote…just a paraphrase of what he was saying.
From listening to the questions and answers I have to say that our representatives (both sides) came off as nearly complete idiots (some of them did better than others), while Liddy came off as a guy who knows what the fuck he’s talking about…and wasn’t afraid to say ‘I don’t know’ when he didn’t know, instead of giving some bullshit double talk kind of answer. Also, I like the fact that Liddy and AIG are thinking in terms of how do they pay back the money as fully and in as short a time as possible. I don’t think many people understand that AIG has a plan to do just that, and to do it as soon as they can. In fact, Liddy said that if the market picks up and credit starts to loosen up they will be able to start selling off (or going public with) some of the more stable and solid pieces of the business in the near future…and some of those will be worth billions.
-XT
You know what, my anger at the bonuses is over. I just want to know how my investment in AIG (meaning our investment) is doing, if they are solving the mess, then I don’t really care, to be honest. That’s what needs to be investigated.
Listening to Liddy talk about this, I’d say our investment is doing well. If the market picks up and if the banks are able to start unfreezing assets and start lending large sums again I’d say AIG should be able to return most, if not all of our collective money to us…eventually. If they manage to either go public with some of the insurance BU’s or out right sell them off AIG should be able to return quite a chunk there. And if they don’t in fact need to spend the $30 billion reserve then we’ll be able to get that back as well. I don’t think it’s an insurmountable problem for AIG to be able to sell off pieces of itself to give us back the $70+ billion remaining.
-XT
Not really. I have to ask, why were you impressed?
Liddy for Prez, '12?
Well, let’s hops so.
Well for starters, that he didn’t slug anyone.