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AIG Execs Cave, Will ‘Hand Over’ Bonuses

From a triumphant Reuters:

A protester holds a sign highlighting recent reported bonuses paid to AIG executives in Wilton, Connecticut.

AIG employees hand over bonuses: Cuomo

By Grant McCool and Lilla Zuill

NEW YORK (Reuters) – Fifteen of 20 American International Group leading bonus recipients have agreed to give them back in full, said New York’s top legal officer who is probing into $165 million in executive pay at the troubled company bailed out by the U.S. government.

New York Attorney General Andrew Cuomo told reporters on a conference call on Monday that he hopes to recoup $80 million of bonus payments made to Americans, or about half of the $165 million paid by the giant insurer on March 15.

An AIG spokeswoman said late Monday a "handful" of senior executives have resigned from its Financial Products unit, which Cuomo blamed last week for bringing the insurer to the brink of collapse. It was unclear if any of the executives with the top bonuses had resigned.

The spokeswoman declined to specify the number of resignations, noting they were "manageable," and said there were indications that more will follow.

Cuomo, who has pressed AIG and other banks and companies over the hot button issue of bonuses, said that so far he calculated that $50 million had been paid back by employees of the AIG Financial Products unit.

"A number of them (employees) have risen to the occasion and I applaud them," said Cuomo, whose office is looking into whether AIG and others broke securities laws by not fully disclosing information about the award of bonuses to executives for 2008.

Nine of the 10 executives who received top bonuses have agreed to return them, Cuomo said. He said about $80 million was paid to Americans, the rest outside of U.S. jurisdiction.

Cuomo has said he wanted to make public the names and details of bonus recipients, but he was assessing security and privacy of individuals following death threats against some employees.

"Our legal theory is fraudulent conveyance, and we think it is a powerful legal theory," Cuomo told reporters. "But if a person returns the money I don’t it is in the public interest to name them."

He added that those people will see their name disappear from his list permanently

How kind of Mr. Cuomo to not name the names of those who are giving back the bonuses. You see, this isn’t blackmail or anything.

Still, that these AIG employees can be ‘Mau-Mau-ed’ into giving back bonuses to which they are legally entitled is bad enough.

But that our watchdog media is portraying Andrew Cuomo as a hero in all of this is beyond disgusting.

As we noted back in September 2008, even the ultra-left Village Voice has pointed how Mr. Cuomo was very largely responsible for the whole mortgage meltdown in the first place.

For Mr. Cuomo forced lenders to give home loans to people who simply could not (or would not) ever pay them back.

From (of all places) the Village Voice:

Andrew Cuomo and Fannie and Freddie

How the youngest Housing and Urban Development secretary in history gave birth to the mortgage crisis

By Wayne Barrett
August 05, 2008

There are as many starting points for the mortgage meltdown as there are fears about how far it has yet to go, but one decisive point of departure is the final years of the Clinton administration, when a kid from Queens without any real banking or real-estate experience was the only man in Washington with the power to regulate the giants of home finance, the Federal National Mortgage Association (FNMA) and the Federal Home Loan Mortgage Corporation (FHLMC), better known as Fannie Mae and Freddie Mac.

Andrew Cuomo, the youngest Housing and Urban Development secretary in history, made a series of decisions between 1997 and 2001 that gave birth to the country’s current crisis. He took actions that—in combination with many other factors—helped plunge Fannie and Freddie into the subprime markets without putting in place the means to monitor their increasingly risky investments. He turned the Federal Housing Administration mortgage program into a sweetheart lender with sky-high loan ceilings and no money down, and he legalized what a federal judge has branded “kickbacks” to brokers that have fueled the sale of overpriced and unsupportable loans. Three to four million families are now facing foreclosure, and Cuomo is one of the reasons why

In 2000, Cuomo required a quantum leap in the number of affordable, low-to-moderate-income loans that the two mortgage banks—known collectively as Government Sponsored Enterprises—would have to buy…

Cuomo’s predecessor, Henry Cisneros, did that for the first time in December 1995, taking a cautious approach and moving the GSEs toward a requirement that 42 percent of their mortgages serve low- and moderate-income families. Cuomo raised that number to 50 percent and dramatically hiked GSE mandates to buy mortgages in underserved neighborhoods and for the “very-low-income.” …

While many saw this demand for increasingly “flexible” loan terms and standards as a positive step for low-income and minority families, others warned that they could have potentially dangerous consequences. Franklin Raines, the Fannie chairman and first black CEO of a Fortune 500 company, warned that Cuomo’s rules were moving Fannie into risky territory: “We have not been a major presence in the subprime market,” he said, “but you can bet that under these goals, we will be.” …

But raising the affordable-housing goals was only half the Cuomo story.

The HUD secretary is also required to produce voluminous rules that govern how the GSEs meet those goals, and the 187-page rules Cuomo issued opened the door to abuse.

The rules explicitly rejected the idea of imposing any new reporting requirements on the GSEs. In other words, HUD wanted Fannie and Freddie to buy risky loans, but the department didn’t want to hear just how risky they were…

As we have noted before, this very lengthy Village Voice article contains much more damming information about Mr. Cuomo’s machinations.

But in basic terms it is quite safe to say that if it was for the actions of Mr. Cuomo and his comrades, AIG wouldn’t be in the terrible position it is in today. A detail that our one party media (apart from the Village Voice) has somehow failed to mention.

But Mr. Cuomo’s morality play is not unlike the irony of having an ACORN front group protesting at the offices of the AIG and even harassing its employees where they live.

Or the sheer mockery of Barney Frank, Christopher Dodd and Maxine Waters upbraiding banking CEOs in their Congressional show trials.

How long any nation can survive when such grotesque perversions of justice become every day events?

This article was posted by Steve on Tuesday, March 24th, 2009. Comments are currently closed.

11 Responses to “AIG Execs Cave, Will ‘Hand Over’ Bonuses”

  1. Odie44 says:

    Why is Cuomo investigating federally negotiated contracts?

    SEC/NASD/FDIC have nothing to do with the state of New York. TARP and bailout funds have nothing to do with the state of New York.

    Let me guess… Gov run.

  2. Rusty Shackleford says:

    “We are not content with negative obedience, nor even with the most abject submission. When finally you surrender to us, it must be of your own free will. We do not destroy the heretic because he resists us; so long as he resists us we never destroy him. We convert him, we capture his inner mind, we reshape him. We burn all evil and all illusion out of him; we bring him over to our side, not in appearance, but genuinely, heart and soul. We make him one of ourselves before we kill him. It is intolerable to us that an erroneous thought should exist anywhere in the world, however secret and powerless it may be. Even in the instance of death we cannot permit any deviation . . . we make the brain perfect before we blow it out.”

    George Orwell “1984”

  3. Confucius says:

    I have to ask,

    If these truths are so self-evident (which I think they are), then why isn’t anyone at AIG, the financial community or Washington fighting back?

    • AuntieAM says:

      SG wrote:”How long any nation can survive when such grotesque perversions of justice become every day events?”

      Good question, but you also need to ask, How long can any nation survive when the voters ALLOW these crooks, shysters, and frauds to do what they want? Whether it’s out of ignorance (I’d guess that to be the case in about 50%), greed (“whats in it for me?”) or malice (those who want to bring our nation down), it doesn’t matter. The result is the same.

  4. Colonel1961 says:

    Economic ignorance and envy which has turned to resentment – two of the underlying causes. How do you change those? Education. Who is going to teach fundamental economics (non-Marxist) to the masses? Not the union-controlled public schools. Who is going to teach against the sin of envy? Not the leftist churches (for those who happen to attend church – mainly blacks, in this case). But for those who never attended church, had good role models, who cannot understand morality and character, there is no hope.

    I cannot see anything short of a second revolution ever changing the socialist/Marxist path that the ignorant masses have been sold – the demonization of the rich, the class-envy, the entitlement mentality, the perpetual victimhood, the permanent (and unfounded) outrage – that is destroying the very fiber of our country.

  5. ATexThang says:

    AIG needs to take note: when you go back to a man who beats you, don’t be surprised when he hits you AGAIN.

    AIG needs to take their lumps, reorganize if possible, and tell Congress to stick where the sun don’t shine.

    A citizenry afraid of its government lives in tyranny.

  6. oki2 says:

    I would say that if I can give back the money (100% of it) to get my name off that list of his… then I would, especially since if I keep the money (100% of it) I would only end up keeping 10% of it because of that 90% tax.

  7. Barbie says:

    This is yet another example of the government going after and threatening private citizens. Why is this allowed? – This congress and this government, spearheaded by the vengeance-seeking left, want to intimidate and bully any person they do not like. Our personal liberties and lives should be placed on the endangered list. The gov’t is a tyranny out to destroy the individual work ethic and, yes, punish achievers. And yes, it’s fueled by class envy and jealousies.

  8. BannedbytheTaliban says:

    When Obama capped executive pay, I said nothing because I wasn’t an executive.

    When Obama taxed those making over $250,000, I said nothing because I didn’t make that much.

    When Obama passed laws taxing individuals, I said nothing because I wasn’t one of them.

    When Obama taxed me and capped my pay, capitolism was dead. There was only government.

  9. pdsand says:

    Hypocrisy 101:
    “said Cuomo, whose office is looking into whether AIG and others broke securities laws by not fully disclosing information about the award of bonuses to executives for 2008”
    “He said about $80 million was paid to Americans, the rest outside of U.S. jurisdiction”…”Cuomo has said he wanted to make public the names and details of bonus recipients”.
    If they did not fully disclose information about the bonuses, how does he have the names and details of the bonuses? Crack investigative work?
    “Our legal theory is fraudulent conveyance, and we think it is a powerful legal theory,” Cuomo told reporters. “But if a person returns the money I don’t it is in the public interest to name them.”
    If the theory is so powerful, then what happened is a crime, and you would think their names would come out at trial, as it is Mr. Cuomo’s jobs to send criminals to jail, or isn’t it? Unless Mr. Cuomo has already held arraignment in his head and has now proceeded straight to plea bargaining.
    “A number of them (employees) have risen to the occasion and I applaud them”…”He added that those people will see their name disappear from his list permanently…”
    If so many of these employees have already returned their bonus payments, and had their names disappear from his list permanently, then on what basis did he have any information to make these statements? A bunch of people whose names I don’t recall gave money back the other day…

  10. proreason says:

    The tide is turning because of the continuing atrocities that make all too clear the intent of the political criminals.

    The open issue is how much damage will be done before the outrages can be contained.

    O’Reilly openly used the phrase “puppet-master” last night. That is significant because he fashions himself the reasonable man and continually states he wishes The Moron well. He reaches a lot of people who don’t listen to Rush and Glenn Beck.


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