Like everyone else, I’m outraged at the bonuses to be paid to AIG management which was announced over the weekend. But, who is responsible for the outrage?
AIG, since last year, has received nearly $200 billion in federal assistance. The bonuses totaled a little over $190 million.
From Hank Paulson, George Bush, Jr., Tim Geithner, Barack Obama, all of their advisors and all of their lawyers to Congressional members and their staffs laden with lawyers, it’s amazing that no one apparently thought to ask a simple question, “Are there any pending bonuses or benefits that we should know about that may have an adverse effect on the appearance of these loans?”
To me, it seems that this is like a physician treating an infection with an antibiotic and failing to ask if the patient has an allergy to the chosen antibiotic.
AIG has received multiple sums of money from the federal government, most recently since the Obama administration was installed. The issue of bonuses being paid by corporations receiving federal TARP money has come up repeatedly. A particular example would be the bonuses paid to Merrill Lynch managers after Bank of America bought the failed brokerage/ investment bank.That issue arose more than three months ago.
In addition to the $150 billion that was authorized for AIG under the Bush administration, under the auspices of the Obama administration AIG has received another $30 billion since the first of March.
You would think that, with all that has happened in the past year, at least one person out of the multitude of “supposedly smart” people would have thought to ask a simple question.
Watching Barack Obama and Tim Geithner at their press conference during a meeting with representatives of small businesses and community banks this morning, I thought their level of indignation was somewhat ironic. They were the very people who were responsible for this latest outrage by not anticipating the possibility of the bonuses being present and failing to perform due diligence.
Do you think any of the people they were talking to would have made the same mistake twice or not learned from others highly publicized errors? I doubt it.
Update: See what “Freedom Eden” says about the issue …