Someone Explain the Problems with AIG and Bonus money

[CoCoChanel]

AIG execs received bonuses and everybody is up in arms, but did they do anything illegal or is this all a moral issue because the economy is bad and folks who have no money should have received some of that bonus money.

[relief13035]

AIG received a $150 billion bailout from the Federal government (that means you and me - the taxpayers). Then they turn around and hand out $168 million worth of bonuses to their executives.

That's why people are upset - take a bailout and then hand out bonuses for screwing up.

[AngelinaCatHub]

AIG received a $150 billion bailout from the Federal government (that means you and me - the taxpayers). Then they turn around and hand out $168 million worth of bonuses to their executives.

That's why people are upset - take a bailout and then hand out bonuses for screwing up.

Not so. The bonuses where for their work and to stay on beyond thier dismissal. It was drawn in contract befor Govmint, stuck money in thier faces.

The bonus was in contract and our government is sticking it's nose into legal things long ago agreed on.

Let's say, you owned a flower shop. Everything is going fairly well but you needed to get a mortgage to increase your space. So you go the a Government agancy and got a loan. Now they come in and state, you must let your partner go as you could do this job on your own. That is what is happeining here. 'Hub

[dingdong]

Yeah but some of those "bonuses" were retention bonuses for employees that are no longer AIG employees.

Many of the bonuses were supposed to be given if the company was doing well.

Libby was asked, if they are retention bonuses, were these people who were to receive these bonuses the only people who could do the job?

He replied "no".

I am sure there are quite a few people who could have stepped in and worked for a salary w/o the bonus structure and had the same result-a failed company.

The bonuses were not warranted with a failing company begging for money from the taxpayers.

I understand the importance of not letting AIG fail, but to give out bonusus when you are failing and relying on support from the tax payers, that goes against the common sense of most folks, whether they were agreed to beforehand or not.

Look at the way the Swiss bonus their execs. Much better plan.

[JRScott]

Personally the issue with the bonuses is a distraction meant to keep you from finding out the real story.

Basically what congress did today is unconstitutional and I hope the courts find that as soon as someone files a case. Remember they go after one group of people today, they can go after another group the next day.

The real story is in how AIG has been spending your bailout money.

To date:

62 billion to foreign banks and interests
44 billion to domestic banks and interests

Of the Domestic Banks and Interests all of them also received separate TARP monies. So basically it is one big smoke screen allowing the government to double dip and move the pea around in hopes no one notices what's going on. Based on how it has been spent we should have let AIG fail, then just spent the money sent to it to the other banks directly.

[Flamingo]

If anyone watched Larry King last night, Romney fully explained the situation and the government actually allowed those bonuses to take place and did not do their homework prior to giving out the bailout funds and did nothing to stop the distribution of those bouses which AIG was obligated legally to give to the recipients. Simple as that.

[lrprn]

...the government actually allowed those bonuses to take place and did not do their homework prior to giving out the bailout funds and did nothing to stop the distribution of those bouses which AIG was obligated legally to give to the recipients. Simple as that.

Hmmmm...the picture is not quite as simple as that. The Treasury did not just "do nothing".

Looking widely across MANY news sources, most indicate that the Treasury department was not told about the bonuses until 4-5 days before the payment was due to AIG. Geithner immediately asked the Justice department lawyers if the bonuses could be legally blocked and the govt lawyers told him two days before that in their opinion, no. If the govt tried to stop the bonuses legally guaranteed by the AIG employment contracts, the govt could be sued and would likely lose, thus losing the bonuses AND the considerable costs of litigation. That's the real reason the payments went forward.

Many tax lawyers today are all over the news stating that the legislation passed to tax the bonuses at 90% will quite likely eventually be found unconstitutional. More money down the drain - probably more in legal fees than the $168 million the bonuses were in the first place.

How much are we as citizens willing to spend to punish giving out these obviously immoral (but NOT illegal) bonuses? When is it better to take the losses and focus Congress's energy instead on putting better regulations in place to prevent this from ever happening again?

[fltoo]

Iprn, that last line is too funny. Congress is made up of the people that DID NOT read the bill. How are more regulations going to make people do the job that we the people elected them to do, like read something before they pass it?

It really is as simple as FLAM suggested.

[Flamingo]

[QUOTE=lrprn;257752]Hmmmm...the picture is not quite as simple as that. The Treasury did not just "do nothing".

I am just going by what Romney stated on Larry King last night (guest on the show)...he stated they were aware of the bonuses and contracts at the time of the distribution of funds to AIG and they still did nothing at that time to stop any distributions which were eventually done....it just kills me that the purpose of the bonus money was to keep the recipients in their job and to keep doing a good job but as soon as those recipients got the bonus, they left.

[CompTweaker]

Why would you bring up morality on a BK forum?

'obviously immoral'

Look at the bonuses this way: At least those people were working and they were probably very smart people so why not reward them. Yes, their business failed in 2008 but was very sucessful for many years.

America gives billions of dollars to able bodied people who do not work so I am not terribly upset that working people were paid to much.

Just my two cents.

oh my, looks like the persistently judgemental "ferslig" is back.
So tell me, whats the bug up your arse that makes you come back under different names in continuous failed attempts at making someone feel bad for filing bk? you must have a very boring life.

If you want to discuss "immoral", first you need to get a grip with your own morality and obvious obsession trolling this site!

[fltoo]

CT, I thought that sounded like commonman/sweet potato/ferlsig, but it did not start with her usual MO of, "Thank you for your post..." LOL

Anyway, although I disagree with everything the troll says, I do agree that the word "immoral" referring to the people who took bonuses is just as wrong as calling someone immoral for filing BK.

[CompTweaker]

"Why would you bring up morality on a BK forum?"

"Look at the bonuses this way: At least those people were working and they were probably very smart people so why not reward them."

Well, if its not ferslig, the shoe does seem to fit.....and I apologize if Im wrong.

[lrprn]

...I do agree that the word "immoral" referring to the people who took bonuses is just as wrong as calling someone immoral for filing BK.

fltoo, go back and read my original comment. I said the bonuses are immoral, not the people who took them. Nuf' said.

[lrprn]

oh my, looks like the persistently judgemental "ferslig" is back.
So tell me, whats the bug up your arse that makes you come back under different names in continuous failed attempts at making someone feel bad for filing bk? you must have a very boring life.

If you want to discuss "immoral", first you need to get a grip with your own morality and obvious obsession trolling this site!

As I already posted on this same comment of yours in another thread regarding mymom, if you have suspicions that a member is a troll, please send a PM to the mods and let us handle it. Thanks.

[fltoo]

fltoo, go back and read my original comment. I said the bonuses are immoral, not the people who took them. Nuf' said.

Along the same lines though, saying the bonuses are immoral are the same as saying BK is immoral.

My point is, neither has to do with immorality. They are both business decisions in the eye of the beholder. Neither is to be judged.