More on the AIG bonuses. From the LA Times:

AIG said there were two categories of payments: One was for senior executives, the other for 2008 retention bonuses for employees that the company agreed to pay before the federal bailout, the official said. AIG said the retention bonuses were legally required to be paid despite the bailout, a view the Obama administration concluded was correct after a review of the contracts.

Breaking those contracts would have led to greater costs for taxpayers, the official said.

The economic stimulus legislation that President Obama signed into law last month includes strict new limits on bonuses and other compensation to executives of companies that received money from the $700-billion Troubled Asset Relief Program. But the provision specifically excludes any bonus payments “required to be paid pursuant to a written employment contract executed on or before February 11, 2009.”

Given that exemption, the administration’s hands were tied, the official said. But the government will be seeking to recover the bonus money as it restructures the terms of AIG’s bailout. The company has committed to working to develop a way to do that, the official said.

First, if AIG leadership had any sense, which it clearly does not, it would have done everything it could to encourage those employees to forgo those bonuses, because they are clearly the last they will ever get and will severely damage the company’s chances of getting further handouts — the damage to the prestige of the administration over these latest abuses will be immense. Second, I’m glad to see that Geithner and the Geithernites will be looking to claw the money back, but I have my doubts.

This entry was posted on Sunday, March 15th, 2009 at 3:18 am and is filed under The Political Mindscape. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.