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Obama Says Administration Will Try to Block AIG Bonuses

President Obama says AIG’s plan to pay out $165 million in bonuses is “hard to understand.”

FOXNews.com

Monday, March 16, 2009

• PHOTOS

President Obama speaks in the Oval Office of the White House Friday in Washington. (AP Photo)

President Obama said Monday that he’s urged his treasury secretary to do whatever he can to “block” bailed-out American International Group from distributing $165 million in bonuses, calling the insurance giant’s actions “hard to understand.”

The president, talking about the matter for the first time following revelations that AIG was going ahead with plans to shell out tens of millions in bonuses to executives, called the move “an outrage” and said it underscores the need to overhaul financial regulations.

“This is a corporation that finds itself in financial distress due to recklessness and greed.
Under these circumstances, it’s hard to understand how derivative traders at AIG warranted any bonuses, much less $165 million in extra pay,” Obama said.

The U.S. government now has a massive stake in AIG, which has benefited from more than $170 billion in a federal rescue. Lawmakers have called for the government to use that influence to start cleaning house at the top levels of the company.

“I’ve asked Secretary (Timothy) Geithner to use that leverage and pursue every single legal avenue to block these bonuses and make the American taxpayers whole,” Obama said Monday.

“This is not just a matter of dollars and cents. It’s about our fundamental values,” Obama said.

The $165 million was payable to executives by Sunday and was part of a larger total payout reportedly valued at $450 million. AIG reported this month that it had lost $61.7 billion for the fourth quarter of last year, the largest corporate loss in history.

The bulk of the payments at issue cover AIG Financial Products, the unit of the company that sold credit default swaps, the risky contracts that caused massive losses for the insurer.

It also was revealed over the weekend that AIG used more than $90 billion in federal aid to pay out foreign and domestic banks, some of whom had received their own multibillion-dollar U.S. government bailouts.

Some of the biggest recipients of the AIG money were Goldman Sachs at $12.9 billion, and three European banks — France’s Societe Generale at $11.9 billion, Germany’s Deutsche Bank at $11.8 billion, and Britain’s Barclays PLC at $8.5 billion. Merrill Lynch, which also is undergoing federal scrutiny of its bonus plans, received $6.8 billion as of Dec. 31.

The money went to banks to cover their losses on complex mortgage investments, as well as for collateral needed for other transactions.

Key lawmakers have been calling for the government to crack down on AIG in light of the news.

Though AIG Chairman Edward Liddy claims his hands are contractually tied, Rep. Barney Frank, D-Mass., said Monday he’s not convinced.

“I want to look at it very carefully,” said the chairman of the House Financial Services Committee. “These people may have a right to their bonuses — they don’t have a right to their jobs forever.”

Appearing on NBC’s “Today” show, Frank noted that federal government “is the 80 percent owner” of the company and has some leverage.

“Maybe it’s time to fire some people,” he said, adding that the bonuses were “rewarding incompetence.”

“Forget about the legal matter here for a second,” Frank said. “These bonuses are going to people who screwed this thing up enormously, who made terrible decisions.”

Obama stressed Monday that Liddy came on board with AIG after the bonus contracts were signed last year.

A subcommittee for Frank’s panel plans to call Liddy to testify during a hearing on Wednesday.

Paul Kanjorski, D-Pa., chairman of the subcommittee, said in a statement that lawmakers would investigate the bonuses at the hearing.

“We cannot allow individuals who acted irresponsibly to reap undue benefits,” he said.

On ABC’s “Good Morning America” Monday, Sen. Richard Shelby said Congress must do everything it can to make sure the government money going to AIG is handled appropriately.

“These people brought this on themselves. Now you’re rewarding failure. A lot of these people should be fired, not awarded bonuses. This is horrible. It’s outrageous,” the Alabama Republican said.

AIG has agreed to Obama administration requests to restrain future payments. Geithner pressed the president’s case with Liddy last week.

In a letter to Geithner dated Saturday, Liddy said outside lawyers had informed the company that AIG had contractual obligations to make the bonus payments and could face lawsuits if it did not do so.

The Associated Press contributed to this report.

My Pledge!

ABC, NBC, CBS, CNN, MSNBC

To Whom It May Concern,

I am writing as a private citizen of this country and a human being of this planet.  I want to inform you that I will no longer tune in to any of these stations in my home, in my office or when on vacation.  I will make every effort to influence my friends and family to do the same and to ask their friends and family to do the same.

My Pledge

I am afraid for my children, for my husband, for my dear friends and family and for myself.  All the great things this country stands for and shed blood for.  All the men and women that have died in two World Wars, the Korean War, the Vietnam War, the Gulf War, Afghanistan and Iraq have been for naught.  The wonders of our Constitution have now been thrown in the toilet.  Our country will now follow suit and down the path to nothingness and become just another socialist country.  All that we have achieved in 233 years will be thrown out.  What this great country achieved in that short amount of time put 2000 year old civilizations to shame.  In a matter of a few months all will have been undone.  All for the sake of power for those that shouldn’t have it, don’t deserve it and wield it selfishly.

I will make every effort to change that power in two years with my vote.  I will make every effort to change the minds of ten people in my life and ask them to pay it forward.  Let those ten pay it forward and so on.  I refuse to see this great country that my parents fought so hard for and my generation fought hard for and my children’s generation fought for, fall to the European Union, the United Nations or any other worthless socialist entity.  Our country stands for great things and great people!  I refuse to burden my children, grandchildren and great grandchildren with the faulty policies of one man and one congress.  I will fight with my vote in four years to remove that man from office.

I will make every effort to refuse to do business with any entity that promotes these values, is associated with businesses (Disneyland, etc.) that are part of the sphere of blind influence these stations vomit at us.  These stations are obsessed with keeping the uneducated ignorant and ill informed.  Knowledge is power!

Our GREAT Country stands for so many GREAT things.  I pledge not to be lazy, uncaring and unwilling to do my part to make it great again.  Eventually, this party’s policies will effect you too.  How will you stand then?  Socialism doesn’t work!

Proud Citizen of the United States of America,

Lauri S. Murakami

An Awesome Transcript From Distant Shore - iPhone

Start From the bottom - up.

Oh it was so horrible! 
You were right. 
I had everything all set up outside for the going away party. It was below freezing, I had all of Frosty’s favorite foods, ice cream cake, frozen drinks, snow cones… I even had on a cd with Burl Ives singing “Frosty the Snowman” and I had a special gift for him - a new carrot nose! (the old one was getting moldy)
He looked so happy when I brought him out from the freezer - and then the dog took a whiff of him and thought his dreams had come true of an enormous hunk of beef standing before him. Oh, it was so awful… The dog started chomping on Frosty… His head came off.. Coal eyes popping off.. Stick arms flying through the air ( sorry to be so graphic). By the time I pulled the dog off of him there wasn’t much left intact.

All is not lost, I managed to salvage Frosty’s head. I put it in my freezer. It’s suppose to snow on Sunday, I’ll build him a new body and send him on his way. 

«In Reply To»

Oh no, he’s going to smell like a seven bone roast. 

«In Reply To»

Don’t worry! I have him stored in a meat freezer at the local butcher shop. I want to have a little going away party for him before he leaves.  we’re going to have snow this weekend so I can give him a quick touch up and send hm on his way. 

«In Reply To»

Oh no, he’s melting! Noooooo


«In Reply To»

Good point! I better hurry. Frosty looks like he’s lost a little weight. 

«In Reply To»

Make sure you get a refrigerated compartment!


«In Reply To»

Hmmm ok thanks for the advice. I’m getting online to purchase airline tickets for him right now. 

«In Reply To»

The snowman needs a magical top hat and you need to get him to the north pole ASAP!

Poor Frosty…

«In Reply To»

i used to raise snowmen but they kept disappearing in the spring. 

«In Reply To»

Naw I don’t but everyone around me has horses. I used to raise chickens .

«In Reply To»

Um… I like horses but I don’t own any and haven’t ridden on in awhile. 
Do you have any?

«In Reply To»

Do you have any horses?