The AIG bonus flap gets curiouser and curiouser.
Fox News is reporting that if the government demands repayment of the bonus money AIG already paid and recipients sue, the taxpayers could see $300 million or more burned up to recoup their $165 million.
The bonus money is $165 million — about 1/2 of 1% of the AIG bailout of $173 billion.
From PBS blogger:
The outrage over AIG bonuses is echoing from Main Street to Washington, DC and can even be heard on Wall Street. How can it be that these “contracts” are so iron clad that the government has “done all it can legally do” to keep them from being paid, and they will still be paid? It would be more costly to prevent lawsuits? Huh? I say, let them sue. Then they’d have to show up in court and make their case. I, for one, would like a front row seat. The government has a whole army of lawyers; you mean to tell me they can’t muster the strength to fight these potential suits?
But what frustrates me most is that this has been coming for a long time. Runaway executive pay has been a story for decades. Shareholder activists have taken on the boards of big companies who failed executives with hundred million dollar pay packages and multi-million dollar perks. News outlets have tried to shame executives and boards into making changes, with reports of the most overpaid CEOs. AIG was long on this list. There were lawsuits for a “say on pay,” but the whole time executives’ pay grew. For the administration to say it has no choice but to pay out these bonuses, at the same time criticizing them, just seems like more of the same. Will it take riots in the streets for things to change? I hope not, but without real change, I fear that is where this country is heading.
Read it all:
From Stephanie Dhue