Posted on 03/18/2009 5:03:53 AM PDT by Libloather
AIG chief to defend bonuses before Congress
By Jim Kuhnhenn, Associated Press Writer
5 mins ago
WASHINGTON – The head of insurance giant AIG goes to Capitol Hill this morning, where he'll reluctantly defend millions of dollars' worth of bonuses doled out to employees despite the company's need for a $170 billion government bailout. Edward M. Liddy, who took over AIG last fall, says the bonus payments, while "distasteful," had to be paid.
Liddy, chairman and CEO of American International Group Inc., has become the reluctant defender of princely employee bonuses that members of Congress — and much of the American public — find indefensible.
AIG, the giant insurance company that has received $170 billion in government assistance, is paying more than $200 million in bonuses to keep employees from fleeing its troubled financial products division. On Wednesday, Liddy is to pull up a chair at a congressional witness table and take the heat.
Rep. Barney Frank says Congress should rewrite a Depression-era law that the Federal Reserve used to give American International Group its initial government bailout.
Frank said Congress had no say in the decision last fall to plow $85 billion in taxpayers money into the insurance giant, and said that because of that no conditions were attached to the deal to limit or restrain the payment of executive bonuses.
The Massachusetts Democrat, interviewed Wednesday on CBS's "The Early Show," said lawmakers have since "gotten tougher on conditions." He said "it is my hope" that Congress will amend the statute that enabled the Fed to make the direct loan to AIG.
**SNIP**
"If you don't return it on your own, we will do it for you," said Sen. Charles Schumer, D-N.Y.
(Excerpt) Read more at news.yahoo.com ...
I don’t know, but I do know there is no defense of AIG in this matter that would wash in my book.
I am more ticked off for Congress and the President for not READING the damn bill before signing it into law.
By Jeff Poor
Business & Media Institute, 9/24/2008
excerpt...
"Frank, who is openly gay, had a relationship with Herb Moses, an executive for the now-government controlled Fannie Mae. The column revealed the two had split up at the time but also said Frank was referring to Moses as his "spouse." Another Washington Post report said Frank called Moses his "lover" and that the two were "still friends" after the breakup.
Frank was and remains a stalwart defender of Fannie Mae, which is now under FBI investigation along with its sister organization Freddie Mac, American International Group Inc. (NYSE:AIG) and Lehman Brothers (NYSE:LEH) – all recently participants in government bailouts. But Frank has derailed efforts to regulate the institution, as well as denying it posed any financial risk."
http://www.businessandmedia.org/printer/2008/20080924145932.aspx
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Lawmaker Accused of Fannie Mae Conflict of Interest
By Bill Sammon, October 03, 2008
WASHINGTON -- Unqualified home buyers were not the only ones who benefitted from Massachusetts Rep. Barney Frank’s efforts to deregulate Fannie Mae throughout the 1990s.
So did Frank’s partner, a Fannie Mae executive at the forefront of the agency’s push to relax lending restrictions.
Now that Fannie Mae is at the epicenter of a financial meltdown that threatens the U.S. economy, some are raising new questions about Frank's relationship with Herb Moses, who was Fannie’s assistant director for product initiatives. Moses worked at the government-sponsored enterprise from 1991 to 1998, while Frank was on the House Banking Committee, which had jurisdiction over Fannie.
Both Frank and Moses assured the Wall Street Journal in 1992 that they took pains to avoid any conflicts of interest. Critics, however, remain skeptical.
"It’s absolutely a conflict," said Dan Gainor, vice president of the Business & Media Institute. "He was voting on Fannie Mae at a time when he was involved with a Fannie Mae executive. How is that not germane?
"If this had been his ex-wife and he was Republican, I would bet every penny I have - or at least what’s not in the stock market - that this would be considered germane," added Gainor, a T. Boone Pickens Fellow. "But everybody wants to avoid it because he’s gay. It’s the quintessential double standard."
A top GOP House aide agreed.
"C’mon, he writes housing and banking laws and his boyfriend is a top exec at a firm that stands to gain from those laws?" the aide told FOX News. "No media ever takes note? Imagine what would happen if Frank’s political affiliation was R instead of D? Imagine what the media would say if [GOP former] Chairman [Mike] Oxley’s wife or [GOP presidential nominee John] McCain’s wife was a top exec at Fannie for a decade while they wrote the nation’s housing and banking laws."
Frank’s office did not immediately respond to requests for comment.
Frank met Moses in 1987, the same year he became the first openly gay member of Congress.
"I am the only member of the congressional gay spouse caucus," Moses wrote in the Washington Post in 1991. "On Capitol Hill, Barney always introduces me as his lover."
The two lived together in a Washington home until they broke up in 1998, a few months after Moses ended his seven-year tenure at Fannie Mae, where he was the assistant director of product initiatives. According to National Mortgage News, Moses "helped develop many of Fannie Mae’s affordable housing and home improvement lending programs."
Critics say such programs led to the mortgage meltdown that prompted last month’s government takeover of Fannie Mae and its financial cousin, Freddie Mac. The giant firms are blamed for spreading bad mortgages throughout the private financial sector.
Although Frank now blames Republicans for the failure of Fannie and Freddie, he spent years blocking GOP lawmakers from imposing tougher regulations on the mortgage giants. In 1991, the year Moses was hired by Fannie, the Boston Globe reported that Frank pushed the agency to loosen regulations on mortgages for two- and three-family homes, even though they were defaulting at twice and five times the rate of single homes, respectively.
Three years later, President Clinton’s Department of Housing and Urban Development tried to impose a new regulation on Fannie, but was thwarted by Frank. Clinton now blames such Democrats for planting the seeds of today’s economic crisis.
"I think the responsibility that the Democrats have may rest more in resisting any efforts by Republicans in the Congress or by me when I was president, to put some standards and tighten up a little on Fannie Mae and Freddie Mac," Clinton said recently.
Bill Sammon is FOX News' Washington Deputy Managing Editor.
http://www.foxnews.com/printer_friendly_story/0,3566,432501,00.html
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Rush Limbaugh's Barney Frank/Banking Queen parody of ABBA's "Dancing Queen":
http://www.youtube.com/watch?v=ZwVWXN0Pyq4
If they can wipe away their contractual obligations to their employees, they can also wipe away their contractual insurer obligations.
be careful what you wish for.
I do not believe for one minute this was a surprise to Congress or to Bama. These people would know darn well if funding was cut to perform abortions. So they are lying if they claim ignorance because lack of reading. That is not to say they are not ignorant.
I hope he does a “Dogbert”!
Yeah, if I was insured by AIG, I would look for a new company. These guys are crooks...however, the contracts are illegal in my opinion since they were already in big trouble when they were written.
This is a bait and switch SHAM!
Imagine ACORN big wigs answering what will they do with their bonuses?
They were under contract to pay these bonuses. I am not happy either but there it is.
I am more ticked off at Congress and 0Bama for their pork-laden, wasteful spending Porkulous and Budget bills. And, at Barney Frank and Chris Dodd for helping create this housing mess in the first place. We’re talking billions and trillions - who gives a rip about a few bonuses they knew about a year ago?
What?
How about this? The company has contracts to pay bonuses. Since AIG was not allowed to go bankrupt and default on contracts, it has to pay them. That is what is called the rule of law. There is no legal right to rewrite contracts simply because they are politically unpopular.
This might be as good a place as any to ask this, and perhaps it has been answered somewhere before, but as I understand AIG has 2 sides: the insurance side and the financial/banking side.
Now the insurance part of the biz is solvent and doing ok from what I’ve read, it is the financial side that has fallen apart. Were these execs working for the banking side or the insurance side? Or were they in charge of running the whole enchalada?
Legal/illegal is NOT subject to simple opinion. Contracts are reviewed by lawyers prior to proffer and signing. These contracts would require invalidation in court (via suit - which may well cost more money than the individual contracts are worth).
Let me reframe the issue. If your mortgage holder starts heading south, should they have the right to call your mortgage due in full to balance their books? After all, the mortgage is simply a contract that allows you to pay off the house over time, and if they “need their money now” (I hate those commercials), then they should be able to get it, right?
It is in the bill put out by Congress. It is a distraction for the TAXPAYER money paid to foreign banks.
Everytime Frank askes him a question he should answer.....I’m sorry, I don’t understand the question. In fact, I can’t understand a word you are saying......do you have marbles in your mouth or something?
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