Despie President Obama’s many anti-big business, anti-executive and anti-Wall Street pronouncements, he never could gain much traction with the public and the congress until just this week.
That, and the view that we should “Never let a good crisis go to waste” makes one wonder why the AIG bonus crisis was left unreported until just now?
And Obama’s faux outrage at AIG reminded me of the movie “Casablanca” when Captain Renault said, “I’m shocked, shocked to find that gambling is going on in here!”
Why do we have our national panties in a bunch over less then $200 million while we are spending trillions?
The answer could be that this is the crisis, the tool, the White House was waiting for to open the door to tougher standards on pay, bonuses, aircraft and other perks for an army of top executives….
This may be about government intrusion into corporate life in America much more than it is about AIG and Geithner.
But Geithner is a friend of Wall Street and Summers is a friend of both and Obama hired them both…..
I mean, the president is offering in his budget to intrude upon every other corner of American life — why not the captains of Wall Street?
You don’t think the term “Big Oil” was an accident, do you?
“This is a manipulation of the media and the public, simple as that,” a long time political operative told us. “Don’t underestimate these guys.”
From The New York Times, January 29, 2009:
“Obama Outraged, Calls Wall Street Bonuses ‘Shameful'”
By JULIE HIRSCHFELD DAVIS, Associated Press
Cue the outrage. For months, the Obama administration and members of Congress have known that insurance giant AIG was getting ready to pay huge bonuses while living off. It wasn’t until the money was flowing and news was trickling out to the public that official Washington rose up in anger and vowed to yank the money back.
Why the sudden furor, just weeks after Barack Obama’s team paid out $30 billion in additional aid to the company? So far, the administration has been unable to match its actions to Obama’s tough rhetoric on executive compensation. And Congress has been unable or unwilling to restrict bonuses for bailout recipients, despite some lawmakers’ repeated efforts to do so.
The situation has the White House and Treasury Secretary Timothy Geithner on the defensive. The administration was caught off guard Tuesday trying to explain why Geithner had waited until last Wednesday to call AIG chief executive Edward M. Liddy and demand that the bonus payments be restructured.
Neither Obama nor Geithner learned of the impending bonus payments until last week,told The Associated Press late Tuesday, speaking on condition of anonymity about internal discussions.
Publicly, the White House expressed confidence in Geithner — but still made it clear he was the one responsible for how the matter was handled.
“I do know that Secretary Geithner last week engaged with the CEO of AIG to communicate what we thought were outrageous and unacceptable bonuses,” White House spokesman Robert Gibbs said. Gibbs declined to provide a timeline that would show when members of the administration — including the president and others at the White House — became aware of the bonuses.
In an interview with The Associated Press, Obama’s chief economic advisersaid: “In the context of what we’re doing, Secretary Geithner was notified, he has said, last week. As he reported to the rest of us, he moved aggressively and immediately, aggressively and immediately, to recoup whatever could be legally recouped. He recognized that you can’t just abrogate contracts willy-nilly, but he moved to do what could be done.”
The bonus problem wasn’t new, as many lawmakers and administration officials knew only too well. AIG’s plans to pay hundreds of millions of dollars were publicized last fall, when Congress started asking questions about expensive junkets the company had sponsored. A November SEC filing by the company details more than $469 million in “retention payments” to keep prized employees.
Back then,, D-Md., began pumping Liddy for information on the bonuses and pressing him to scale them back. “There was outrage brewing already,” Cummings said. “I’m saying (to Liddy), ‘Be a good citizen. … Do something about this.’ ”
Around the same time, outside lawyers hired by the Federal Reserve started reviewing the bonuses as part of a broader look at retention and compensation plans, according to government officials who spoke on condition of anonymity. The outside attorneys examined the possibility of making changes to the company plans — scaling them back, delaying them or rescinding them. They ultimately concluded that even if AIG’s bonuses were withheld, the company would probably be sued successfully by its employees and be forced to pay them, the officials said.
In January, Reps. Joseph E. Crowley of New York and of Pennsylvania wrote to the Federal Reserve and the Treasury Department pressing the administration to scrutinize AIG’s bonus plans and take steps against excessive payments.
AIG Bonuses: Pure Distraction