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AP: Obama Knew All About AIG Bonuses

From a surprisingly critical Associated Press:

SPIN METER: Cue the Washington outrage

By Julie Hirschfeld Davis, Associated Press Writer

WASHINGTON – 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 government bailouts. 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

While administration officials insisted Tuesday that neither Obama nor Geithner learned of the impending bonus payments until last week, the problem wasn’t new. 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

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 Paul E. Kanjorski 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.

"I at that point realized that we were going to have a backlash with regard to these bonuses," Kanjorski said in an AP interview. In a meeting with Liddy later that month, he said he told the AIG chief that "all hell would break loose if we didn’t find a way to inform the public … and that we should take every step to put that information out there so we wouldn’t have the shock."

Around the same time, Congress and Obama’s team were passing up an opportunity to put in place strict laws to revoke bonuses from recipients of the $700 billion Wall Street bailout. In February, the Senate voted to add such a proposal to the economic recovery bill that cleared Congress, but in final closed-door talks on the measure, that provision was dropped in favor of limits that affect only future payments.

"There was a lot of lobbying against it and it died," said Sen. Ron Wyden, D-Ore., who proposed the measure with Republican Sen. Olympia J. Snowe of Maine. He said Obama’s team is sending mixed messages on what will and won’t be tolerated on bonuses, with the president coming out strongly against excessive Wall Street rewards but top officials not following through.

"The president goes out and says this is not acceptable, and then some backroom deal gets cut to let these things get paid out anyway," Wyden said. "They need to put this to bed once and for all."

Last Wednesday, an apparently tense conversation between Geithner and Liddy brought the matter to a head. Geithner had learned of the bonus payments the previous day, said a Treasury Department official familiar with the government’s dealings with AIG…

[O]n Monday, the president himself came out strongly on the issue, calling the payments "an outrage" and publicly directing his team to look for ways to cancel the payments…

"It’s shocking," said Sen. Mitch McConnell, R-Ky., the minority leader, that "the administration would come to us now and act surprised."

Of course the surprise here is not that all of this self-righteous outrage was feigned. (We suspected it from the start.)

No, the surprise is that the Associated Press would actually report this bit of theater for what it is.

Even the Washington Post has the good grace to delete these inconvenient details from its AIG story yesterday.

This article was posted by Steve on Wednesday, March 18th, 2009. Comments are currently closed.

13 Responses to “AP: Obama Knew All About AIG Bonuses”

  1. wardmama4 says:

    I thank God daily that I am not so stupid as to believe this BS.

    I also thank God daily that I live in a country that does not throw the people stupid enough to believe this BS into asylums to be forgotten.

    And I shall now pray to God daily that these moronic losers can no longer vote their head moronic losers into office any more.

    The Klownposse in DC in full regalia – playing to an irony proof (due to dumbed down education) crowd.

    It is sure to be a hit for years to come.

    God help America

  2. jrmcdonald says:

    Was the AIG bailout really to refill Congresses lost retirement funds?

    • Consilience says:

      Nope. Check the Snopes report on AIG and congressional pensions—they asked AIG and got a straight answer…

    • jrmcdonald says:

      The Snopes report has the same validity with me as Obama saying his ‘internal review’ cleared any wrong doing between Rahm and Blago.

  3. proreason says:

    The Moron’s administration has one underlying assumption……the ignorance of the public cannot be overestimated.

    It worked during the campaign big-time, albeit with the triple-time cooperation of the media butt-boys.

    We’ll see if it works for much longer as the economy continues to tank and he gins up these little “crisis” around the world.

  4. Odie44 says:

    As we speak – the idiot Bambi is on Fox telepromter campaigning again.

    Some highlights:
    “We are in a big mess than needs to be cleaned up”
    “Some people 1 or 2 or 3 years ago said AIG bonuses were good and now are feigning anger” (does that include Frank, Dodd, Waters, ACORN and you, ass clown?)
    “We need to get credit flowing to business and consumers”
    “We have a plan”

    It is absolutely unbelieveable that this idiot and his Dem handlers are sticking to this message, while the global, domestic shit hits the fan. Oh, and he just added a “we inhereted…” line.

    Let me offer the camp some basic, logical advice:

    “If you stay on message (p), then you get approval(q)”

    “If you get negative approval(-q), then you must get off message(-p)”

    p to q
    = -p

  5. U NO HOO says:

    Shep Smith is on a rip.

  6. TwilightZoned says:

    “The president goes out and says this is not acceptable, and then some backroom deal gets cut to let these things get paid out anyway,” Wyden said. “They need to put this to bed once and for all.”

    O was second to Dodd in receiving their money. Of course he’s going to cut a backroom deal. It’s payback time. Only O’s hardcore voters are so stupid as to not see what is really going on. But if O thinks the rest of us are so stupid, his overly inflated ego may be his Achilles heel.

  7. Lipstick on a PIAPS says:

    This is so Orwellian. The Billions in bailout money went to fix 100%, the liberal uber-wealthy around the world who donated to the Barak campaign. This is just to distract the American Taxpayer from keeping ther eye on the ball. Kicking a bunch of traders who covered these bad bets out of a few lousy million dollars so the BILLIONS will pass unnoticed is one of the oldst tricks in the books. So under the guise of “protecting” the taxpayers the Congress is going to give themselves power to enumerate bonuses or not as they see fit. Karl Marx and Saul Alinsky are high fiving in hell right now!

  8. canary says:

    Greedy Obama whining about Republicans wanting to check things out first. Look who bought his wife a 30,000 dollar ring when he could have given it to the poor country across the sea.

  9. canary says:

    and another speech to day reiterating “we” didn’t cause this. Couple of hours later, Dodd fessing up, is now admitting they all knew. I think Obama is going to be on news daily. He mentioned his full plate, which his wife said on her recent interview. Cry me a river.

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