Editorial: AIG should be forced to give back bonuses
President Obama and many members of Congress are trying to figure out how to force insurance giant AIG to give back bonuses paid for with federal bailout money. Take the fight to the limit.
Seattle Times editorial
THE outrage builds and builds. Insurance behemoth American International Group combines high chutzpah with raw nerve by doling out part of the $170 billion in federal bailout cash in hefty bonuses to executives in the very division that caused the company's financial woes.
AIG wins the prize as the nation's worst corporate citizen. The bonuses should be repaid, rescinded or taxed at extraordinarily high levels, as some senators have suggested.
Politicians from President Barack Obama on down are trying to get in front of the parade of rage by issuing public statements that fuss and fume. They will be measured by their success in using every strategy imaginable to get the money back. The message now to every hardworking family in America: Our government rewards failure.
Obama was right to order Treasury Secretary Timothy Geithner to pursue every angle to block the bonuses. But the new president confuses Americans because he says he wants the money back while his economic advisers say they legally can do little to stop the bonuses. Keep trying.
The lesson of federal intervention in an economic crisis cannot be that the people who made spectacularly bad decisions are rewarded
The U.S. Senate is contemplating legislation that would tax bonuses at a high rate. That's a start.
New York Attorney General Andrew Cuomo says 73 employees were paid more than $1 million in bonuses, with the highest bonus at $6.4 million. Though some of these were called retention bonuses, several employees receiving them are no longer working at AIG.
Cuomo is looking at state law regarding fraudulent conveyance to win back the bonus money. That works, too.
Many other questions cry out for answers. AIG got a lot of money that remains unaccounted. The company funneled some proceeds to banks and other firms. Who? When? Where?
The nation's economy is in dire straits. The bailout program is a necessary attempt to right the Good Ship America. Our leaders should take the fight to win back bonus money to the limit.
Copyright © 2009 The Seattle Times Company
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