24 March 2009

Probably had enough already...

The New York Times has an article by Mary Williams Walsh and Carl Hulse about the state of things at AIG:
The New York State attorney general, Andrew Cuomo, said on Monday that he had persuaded nine of the top ten bonus recipients at the American International Group to give their money back, as the Senate retreated on plans to tax such bonuses. Mr. Cuomo said he was working his way down a list of AIG employees, ranked by the size of their bonuses, and had already won commitments to pay back $50 million out of the total $165 million awarded this month. But, in a reversal of the stand he took last week, he said he did not intend to release any names. “If the person returns the money, I don’t think there’s a public interest in releasing the names,” Mr. Cuomo said in a conference call with reporters.
In Washington, the Senate majority leader, Harry Reid, said that efforts to recover bonuses like the ones at AIG through punitive taxes would be delayed. Other officials said momentum in Congress had slowed considerably, given misgivings voiced by President Obama.
Mr. Cuomo said that he hoped eventually to recover $80 million in bonuses paid in March to AIG employees in the United States. But he said an additional $85 million had gone to people outside the United States, and he did not believe his office had the legal standing to pursue them. That would appear to spare people in AIG’s financial products office in London, the seat of the company’s business in credit-default swaps— the derivatives that nearly sank the company and paralyzed the global financial system last fall. “We have a very aggressive theory about our jurisdiction, but we don’t have a theory that gets us to London,” Mr. Cuomo said. A person with knowledge of the investigation, who spoke on the condition of anonymity, said that two recipients in the London office had returned their bonuses voluntarily, however. Mr. Cuomo said that of the top twenty recipients in the United States, fifteen had returned their payments in full. The rest included people who refused, who were still reviewing their options, or who had not yet been located, he said.
A spokeswoman for AIG, Christina Pretto, confirmed that employees had been agreeing to give back their bonuses, and said there had also been “a handful of senior-level resignations.” She said the company expected more resignations.
This bore out the predictions of AIG's chief executive, Edward Liddy, that if employees had to give back their bonuses, they would probably resign. In remarks to a House Financial Services subcommittee last week, Mr. Liddy expressed concern that such resignations would make it harder for AIG to wind down its portfolio of derivatives, currently worth $1.6 trillion. The company wants to minimize losses while exiting the derivatives business.
Ms. Pretto said the company thought so far that the situation was manageable. On the same day Mr. Liddy spoke, lawmakers began rushing to impose heavy taxes on bonuses paid to executives of companies receiving federal support. The House on Thursday voted overwhelmingly in favor of a near total tax on such bonuses.
But after complaining last week that Republicans were blocking a similar bill in the Senate, Mr. Reid, Democrat of Nevada, indicated on Monday that any action would be delayed. “Republicans have asked for more time to study the legislation, and they’re entitled to that,” Mr. Reid said as he opened the Senate on Monday afternoon. Aides said the Senate would spend the next few days on a bill to expand national community service programs, and could return to the bonus issue this week.
The Republican leader, Senator Mitch McConnell of Kentucky, said there were important reasons to put the brakes on the legislation. “This bill ought to slow down, and we ought to think about the ramifications of what we are doing,” Mr. McConnell said at a news conference. “I gather from listening to the administration over the weekend that they are having some second thoughts about whether this is the right way to go.”
After the House vote last week, the White House said that Mr. Obama looked forward to signing a final bill. But within hours, the president began to back away from that position, and in an interview on Sunday on 60 Minutes, he said he had not reached a conclusion. “We can’t govern out of anger,” Mr. Obama said. Pressed about the constitutionality of a steep tax on bonuses, the president, who is a former constitutional law professor, said, “Let’s see if there are ways of doing this that are both legal, that are constitutional, that uphold our basic principles of fairness, but don’t hamper us from getting the banking system back on track.” He added, “That’s why we’re going to have to take a look at this legislation carefully.” Some officials said that the president’s questions had created significant reluctance to act in the Senate, because lawmakers do not want to get too far out in front of the administration if the president ultimately is not going to back the tax.
Rico says that, if he'd gotten millions from these idiots, he still be "reviewing his options", too (and preferably somewhere with no extradition treaty)...

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