Liddy: Bernanke and the Federal Reserve approved of bonuses in advance.
Liddy: Bernanke and the Federal Reserve approved of bonuses in advance.
Testifying before Congress today, AIG CEO Gordon Edward Liddy said that the Federal Reserve was aware the bonuses would be paid out and “acquiesced in that decision.” In fact, Liddy claimed that Federal Reserve members were present at AIG’s “compensation committee meetings” with the ability to say “yea or nay”:
REP. KANJORSKI (D-PA): Am I to understand that you’re saying that Chairman Bernanke or his designated person at the Federal Reserve was informed that you were going to make these payments and acquiesced in that decision?
LIDDY: Yes, everything we do, we do in partnership with the Federal Reserve. The Federal Reserve is at our board meetings and our compensation committee meetings and our various meetings on strategy and they have the ability to weigh in — either yea or nay — on anything that we decide.
Watch it:
Rep. Mike Castle (R-DE) later asked for clarification on whether the Fed “did not say nay as far as the bonuses were concerned.” Liddy replied that “there was great angst over the payment of these bonuses,” but that the Fed and AIG ultimately decided that “the risk was too great that we would lose all the progress we made if we didn’t pay these bonuses.”
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Liddy: Bernanke and the Federal Reserve approved of bonuses in advance.
– - Hey Ben, how’s the view from under that bus?
March 18th, 2009 at 3:34 pm“the risk was too great that we would lose all the progress we made if we didn’t pay these bonuses.”
They may have fcked up worse? How is that possible? When did doing a bad job become worthy of a bonus? Most people would be fired for fcking up that bad, so WTF?!?
March 18th, 2009 at 3:37 pm“… but that the Fed and AIG ultimately decided that “the risk was too great that we would lose all the progress we made if we didn’t pay these bonuses.”
____________
Lose all the PROGRESS?
WHAT F-IN’ PROGRESS?
I don’t believe these lyin’ sacks of Cheney.
Talk about BRASS COJONES the size of beach balls…
March 18th, 2009 at 3:38 pm.
Q U E S T I O N:
Who appointed Ben Bernanke?
.
March 18th, 2009 at 3:39 pmWhy is it that I can’t read Edward Liddy’s name without thinking of Howard Beale’s rant in Network about Ed Ruddy dying and leaving his network in the hands of a soulless corporate conglomerate?
March 18th, 2009 at 3:43 pmThat is part of it. But, it is also consistant with right-wing Republican ideology, which claims that the uber-wealthy deserve as much money as they can grab, irregardless of ethics, morals, or law.
March 18th, 2009 at 3:44 pm…we would lose all the progress we made if we didn’t pay these bonuses.”
…as in, progress to completing the looting of the US treasury before the company folded?
And why did so many of the thieves quit AIG when they got their Bonuses?
Was it grab the money and run?
I think so, and we should take the money back before they leave the country with it.
March 18th, 2009 at 3:45 pmMaybe this would be a good time to ask Greenspan, why he was opposed to Bernake.
March 18th, 2009 at 3:46 pm“Stuff happens”
March 18th, 2009 at 3:49 pm– DICK Cheney -
That doesn’t explain the legal authority by which the Federal Reserve, a private banking cartel, can make decisions regarding the regulation of payments made by an independant private corporation (AIG).
March 18th, 2009 at 3:51 pmSo…Bernanke is in the room, Bush is the president, and it’s Obama’s fault.
Go figure
March 18th, 2009 at 3:51 pmTim Geithner drew up the bailout package for AGI and Democrat Chris Dodd added a clause allowing AIG employees to keep there bonuses… http://www.liveleak.com/view?i=b63_1237304298&c=1
OBAMA and the democrat controlled congress SIGNED THE BAIL OUT PACKAGE with the clause in place.
And, we are supposed to be mad at the AIG employees? These incompetent politicians did not even read the package before they signed it.
Give me a break.
March 18th, 2009 at 3:52 pmI really do think that it is time for President Obama to cut Bernanke, Geithner and Summers lose and start from scratch. These men are doing him a disservice.
Also, I’ve been trying to formulate a response to those who think that Obama can and should at this date go back and nullify those bonuses and I think I finally have one that makes sense. Because I don’t think that Obama can or should do that.
So, here’s my analogy:
Let’s say that we are talking about the auto industry and union contracts. So, let’s say that Congress passes a bill that says any union contracts agreed to between the union and management before a certain date were null and void. Not anything going forward from this point, but going back in time and nullifying something that was a legally binding contract. How would you feel about that?
I hate it that AIG is getting away with this. But I would rather see us follow the rule of law (it’s not really legal to write a law that is retroactive) than to become like Bush and ignore laws we don’t like and make new laws whenever we find it convenient.
March 18th, 2009 at 3:55 pm.
This is a case of…
… Follow the money.
.
March 18th, 2009 at 3:55 pmHen house, meet the wolf
March 18th, 2009 at 3:56 pmDodd Under Fire For Legislation Behind AIG Bonuses
March 18th, 2009 at 3:58 pmLiddy looks like such an alcoholic! Addicts like that can lie with impunity.
March 18th, 2009 at 4:00 pmTo the mention of Dodd, I will say, please read Glen Greenwald’s blog for today, please! it’s really enlightening as to the exact chain of events:
It was Dodd who did everything possible — including writing and advocating for an amendment — which would have applied the limitations on executive compensation to all bailout-receiving firms, including AIG, and applied it to all future bonus payments without regard to when those payments were promised. But it was Tim Geithner and Larry Summers who openly criticized Dodd’s proposal at the time and insisted that those limitations should apply only to future compensation contracts, not ones that already existed. The exemption for already existing compensation agreements — the exact provision that is now protecting the AIG bonus payments — was inserted at the White House’s insistence and over Dodd’s objections. But now that a political scandal has erupted over these payments, the White House is trying to deflect blame from itself and heap it all on Chris Dodd by claiming that it was Dodd who was responsible for that exemption.
March 18th, 2009 at 4:01 pm“the risk was too great that we would lose all the progress we made if we didn’t pay these bonuses.”
‘Risk’ of what, and to whom?
Pathetic!
March 18th, 2009 at 4:02 pmThis is looking bad. The blame game is going to ratchet up big time and it looks like there’s plenty that will be heaped on Geithner and Obama.
http://www.pufferfishblog.com/
March 18th, 2009 at 4:05 pmBilbo Hussein Bagginsm,
Yes, ex-post facto is illegal…
… And what about withholding pertinent information needed to rationalize decisions regarding future contracts.
Let’s say that the auto execs knew that they were going to have to cut production and jobs in six months, yet refused to reveal this information, thus guaranteeing the pensions at the tax payer’s expense when it should be the CEO’s responsibility to reveal such possible future decisions, I think the outcome would have been different.
There is also the element of “Clean Hands” at play…
… If I p!ss on your leg and insist that indeed, it is rain, just so that you will buy my umbrella, am I contractually bound to buy that umbrella when I discover that the rain is really you p!ssing on my leg?
HAD AIG been honest, maybe these “RETENTIVE” bonuses would not have been “CONTRACTED”? Maybe AIG knew this and purposefully mislead the Senate? Talk about a lack of “good faith”.
Now, tell me why I am legally bound to honor a contract made under purposful deceit?
.
March 18th, 2009 at 4:06 pm.
Troll43…
… Get a clue.
.
March 18th, 2009 at 4:11 pmEver heard the term
“Under New Management”??
March 18th, 2009 at 4:24 pm.
Q U E S T I O N:
If AIG knew that bonuses were being paid out to “RETAIN” talent(hack, cough), and it was “CONTRACTED” in as “RETENTION”, then what should be the penalty to those who took the “RETENTION” money and left? Shouldn’t they have to pay it back for NOT staying, as awarded in their “CONTRACT” for doing, but didn’t?
I mean, if my employer “CONTRACTS” me to stay with the company and pays me a bonus for that purpose, and I leave and break that contract, is my employer obligated to pay me anyway?
.
March 18th, 2009 at 4:26 pmRUCerious,
March 18th, 2009 at 4:27 pmCongress fears that term also.
Max-1 says If I p!ss on your leg and insist that indeed, it is rain, just so that you will buy my umbrella, am I contractually bound to buy that umbrella when I discover that the rain is really you p!ssing on my leg?
Precious!!!! And so true. Why are my socks yellow?
March 18th, 2009 at 4:27 pmTaxing these bonuses at 100% is a perfectly legal way to recover these malappropriated funds.
March 18th, 2009 at 4:29 pmI realize that Liddy wants to throw the Federal Reserve Bank and Bernanke under the bus concerning the bonuses. Bernanke just simply gave AIG a lifeline. From their lack of resources, Bernanke turned to Paulson for help. The media tends to forget Hank Paulson’s role into this mess. I saw this piece from New Yorker:
On Wednesday, September 17th [2008], a day after the Fed agreed to inject eighty-five billion dollars of taxpayers’ money into A.I.G., Bernanke asked Paulson to accompany him to Capitol Hill and make the case for a congressional bailout of the entire banking industry. “We can’t keep doing this,” Bernanke told Paulson. “Both because we at the Fed don’t have the necessary resources and for reasons of democratic legitimacy, it’s important that the Congress come in and take control of the situation.”
Paulson agreed. A bailout ran counter to the Bush Administration’s free-market principles and to his own belief that reckless behavior should not be rewarded, but he had worked on Wall Street for thirty-two years, most recently as the C.E.O. of Goldman Sachs, and had never seen a financial crisis of this magnitude.
On October 3rd [2008], Congress passed an amended bailout bill, giving the Secretary of the Treasury broad authority to purchase from banks up to seven hundred billion dollars in mortgage assets.
http://www.newyorker.com/reporting/2008/12/01/081201fa_fact_cassidy
March 18th, 2009 at 4:30 pmLet the heads roll.
March 18th, 2009 at 4:37 pmMax-1 Says:
Bilbo Hussein Bagginsm,
March 18th, 2009 at 4:40 pmYes, ex-post facto is illegal…
… And what about withholding pertinent information needed to rationalize decisions regarding future contracts.
Now, tell me why I am legally bound to honor a contract made under purposful deceit?
Max-1 Says:
Bilbo Hussein Bagginsm,
Yes, ex-post facto is illegal…
… And what about withholding pertinent information needed to rationalize decisions regarding future contracts.
Now, tell me why I am legally bound to honor a contract made under purposful deceit?
Sorry for the double post, I hit the wrong button.
I agree with you and that is why Cuomo is investigating. He believes the contracts they made are invalid because they knew they would not have the money to pay the bonuses without government help.
I posted my analogy to say why I don’t think that Obama was wrong in what he said about having to honor past contracts. If the contracts are proven invalid, then we need to find a way to get the money back. I’m just tired of people saying that if Dodd’s amendment had included a clause for prior bonuses, that would have solved the problem, because it wouldn’t not have. Not unless the contracts could be proven to be invalid.
March 18th, 2009 at 4:43 pmI truly think it is time for President Obama to dump Bernake, Geithner and Summers. I believe that Obama didn’t know about those bonuses until a couple of weeks ago. I believe that none of the above three told him because they hoped it would all blow over and not come up on the radar screen, knowing that if it did, their asses were grass.
March 18th, 2009 at 4:46 pmRUCerious Says:
Taxing these bonuses at 100% is a perfectly legal way to recover these malappropriated funds.
So you are advocating that the IRS or Congress write a special law/rule to apply only to the bonuses that were given to AIG employees. Isn’t that a lot like Bush making up new laws to suit his purposes without regard for the consequences? I’m not a fan of Charlie Rangle, but I agree with him that using the tax code to recover this money is not appropriate.
March 18th, 2009 at 4:51 pm——————————————————————————–
Well, it had been almost eight years since Bill Clinton was President, so I guess even the Republicans would have felt a little foolish blaming it on him.
March 18th, 2009 at 4:55 pmAccording to Norman Goldman, that would be unconstitutional. The bill could not specifically name the employees of AIG. To be legal, it would have to be directed generally at executives who received bonuses over a certain amount while employed at firms which received public funds.
March 18th, 2009 at 4:58 pmAt lease some things never change when it comes to lying or blaming. Sept. 17, 2008 the Fed Chief allowed a life line to the Banks as he told then Hank Paulson this problem should be addressed to the President and Congress. The Fed Chief does not make laws or conditions that’s the job of the Branches of Govenment. Hank did go to the idiot and Chief President and with the scam in place out comes the bailout. GOP voted for it with no conditions even after that now President Obama put in his Stimulus Bill NO BONUSES, but the Senator took it out of the bill. Now comes the blame game as it’s Obama’s fault or Tim Geithner’s fault. Tim Geithner was delayed for his confirmation hearing to give Paulson enough time to clear out and make sure the plans went off. Now the Medid and the Press as well as GOP Law Makers seen to have forgotten that Hank Paulson was in charge with these criminal acts were applied and George W. Bush was still President.
March 18th, 2009 at 5:08 pmRUCerious Says:
——————————————————————————–
Taxing these bonuses at 100% is a perfectly legal way to recover these malappropriated funds.
It is scary that people like you actually believe that the government should tax any of it’s citizens at 100%. Just wait until the tax man comes after you RUCerious.
Let me ask you … What is worse?
A. That AIG executives receive bonuses under a legal binding contract between employee and employer despite outrage from the public?
B. That the government is overlooking the law on binding contractual agreements between an employee and employer and attempting to confiscate these legal bonuses?
I would have expected much better from the harvard lawyer obama but apparently he missed the ethics classes.
March 18th, 2009 at 5:14 pmRUCerious @#29,
March 18th, 2009 at 5:19 pmGlad you understood my point I was making even though I got my “I’s” and “YOU’s” mixed up. Sometimes, even I get my counterparts(Myself and Me) confused too. LOL
coherently it should read:
Ugh…
March 18th, 2009 at 5:22 pm… It’s only Wednesday!
.
Dear Troll43,
… And if these contracts were retained under FRAUD, are they still legal?
GET A CLUE!
Please, explain the ethos to ripping you off?
… Because after all, it is your tax dollars being funnelled to line their pockets.
.
March 18th, 2009 at 5:28 pmshoeless Says:
According to Norman Goldman, that would be unconstitutional. The bill could not specifically name the employees of AIG. To be legal, it would have to be directed generally at executives who received bonuses over a certain amount while employed at firms which received public funds.
But, once again, you are creating a new law to apply retroactively. Is this a precedent we want to set?
March 18th, 2009 at 5:53 pmMethinks they mean “extortion payments” when they say “bonuses.”
… or was that the bailout payments.
Seriously, they’re still only dancing around the issue. It’s the CDO/MBS instruments that enabled hyper-inflating of the financial system. No one who’s built a position on these “assets” is willing to see them simply disappear, but the reality is that they never actually existed.
They’d rather (somewhat legitimately) push blame off onto the hawkers of those faux-assets, or (less legitimately) blame middle-class families who can’t pay the mortgages that were used as fuel for their bonfire.
It’s a Ponzi-scheme that makes Mr. Madoff look like a petty shoplifter.
March 18th, 2009 at 5:54 pmTim43 Says:
I would have expected much better from the harvard lawyer obama but apparently he missed the ethics classes.
I guess we all missed the part where Obama is proposing that we pass a retroactive tax law to apply to these bonuses. Perhaps you can point us to when and where this happened.
March 18th, 2009 at 5:55 pmMax-1 Says:
Dear Troll43,
… And if these contracts were retained under FRAUD, are they still legal?
Now that is the important question and one that Cuomo is trying to solve. I think he has the basis to claim that the contracts were fraudulent because AIG knew when it entered into the contracts that it would not have the funds to pay the bonuses when they became due without a government bailout. If he proves that, then I do believe that the government can go after the people who received the bonuses under fraudulent conditions and make them pay it back.
March 18th, 2009 at 5:57 pmFor all of you who think that writing new tax law to gain back the AIG bonuses or passing other laws to get the money, please read Nate Silver’s column:
http://www.fivethirtyeight.com/2009/03/new-terri-schaivo.html
He says much better what I have been trying to say all day. I really don’t want to see us go down this road. It seems too much like the roads that George Bush paved.
March 18th, 2009 at 6:07 pmYou aren’t scaring him. He didn’t get a million dollar bonus from the American taxpayers.
Contracts get broken all the time. Many employeers break contracts after a bad year, and tell the employees to sue if they don’t like it. That’s why we have courts. Liddy should tell these jackasses they aren’t getting any bonuses and we’ll see you in court. Oh, and BTW, if you try to sue, you are fired, just like any other company.
Let’s let a jury of taxpayers decide if these pricks should get millions of dollars from the taxpayers.
March 18th, 2009 at 6:12 pmI personally don’t think that is necessary. As I have said many times, break the contract and them try to sue. Or, we could just force AIG in bankruptcy, and reorganize them without the contracts. It happens all the time.
March 18th, 2009 at 6:19 pmshoeless Says:
I personally don’t think that is necessary. As I have said many times, break the contract and them try to sue. Or, we could just force AIG in bankruptcy, and reorganize them without the contracts. It happens all the time.
We can’t force them to sue because they already have the money. Now it’s a way of trying to figure out how to get it back.
On the other hand, I think that the government needs to Nationalize AIG TODAY if what I just read on HP is true about the Insurance part of their business. It’s really scary:
http://www.newsweek.com/id/189917
March 18th, 2009 at 6:37 pmshoeless Says:
Contracts get broken all the time. Many employeers break contracts after a bad year, and tell the employees to sue if they don’t like it. That’s why we have courts. Liddy should tell these jackasses they aren’t getting any bonuses and we’ll see you in court. Oh, and BTW, if you try to sue, you are fired, just like any other company.
Sorry shoeless, that horse has left the barn. The bonuses were paid last Friday.
March 18th, 2009 at 6:38 pmI have a hunch that we haven’t heard the end of this bonus scandal. 73 people got at least $1 million in retention bonus money yet 11 have already gone elsewhere. (So much for retention). What kind of additional compensation did those 11 former employees receive and how large was that compensation? We may only be seeing the tip of the compensation iceberg.
March 18th, 2009 at 6:54 pmHurricane Katrina
THURSDAY, FEBRUARY 19, 2009 4:00:00 PM
State Farm, Allstate dismissed from Louisiana Katrina case
BY JOHN O’BRIEN
NEW ORLEANS (Legal Newsline) – Two insurance giants will be dismissed from a whistleblower lawsuit over their post-Hurricane Katrina practices because they are already facing one initiated by disgraced plaintiffs attorney Richard “Dickie” Scruggs.
Wednesday, the federal Fifth Circuit Court of Appeals affirmed the dismissal of allegations that State Farm Insurance Cos. and Allstate Insurance Co. cheated the federal flood insurance program, yet reinstated the suit against several other defendants.
The suit was filed by Branch Consultants, a group of former claims adjusters, who said several insurance companies misrepresented the amount of damage done during 2005’s Katrina by wind (covered by policies) and water (covered by the federal program).
The opinion from a three-judge panel said that forcing Allstate and State Farm to fight a suit in Louisiana similar to one filed in Mississippi would contradict the False Claims Act’s goal of preventing “parasitic” whistleblower cases.________
QUESTION:How much money did AIG lose in Katrina claims?
Liddy was CEO of Allstate when Katrina occurred.
Paulson tapped Liddy to head AIG in 2008.
Paulson named Liddy to Goldman Sachs board years earlier, when he [Paulson]was head of Goldman Sachs.
Liddy was at Searle back in ’80’s when Rumsfeld was there.
March 18th, 2009 at 6:58 pmKatrina Victims Challenge Insurance Denials Sep 20, 2005 … In the wake of Hurricane Katrina, a major storm is brewing over the denial of … The affected companies include: The Allstate Corporation, …
http://www.consumeraffairs.com/news04/2005/katrina_scruggs.html – 37k – Cached – Similar pages
Consumers Want Allstate Records Kept Public Aug 6, 2007 … “These records shed light on Allstate’s behavior after Hurricane Katrina and Allstate is afraid of the public scrutiny,” Lucas said. …
http://www.consumeraffairs.com/news04/2007/08/allstate_katrina.html – 34k – Cached – Similar pages
Jury Verdict Against Allstate for Hurricane Katrina Damage … Today a federal jury in Louisiana awarded a family whose home suffered damage as a result of Hurricane Katrina, a judgment against Allstate Insurance …
March 18th, 2009 at 7:00 pmphoenix.injuryboard.com/miscellaneous/jury-verdict-against-allstate-for-hurricane-katrina-damage.aspx?googleid=215912 – 114k – Cached – Similar pages
How about those that took the money and ran. 73 people got at least $1 million in retention bonus money yet 11 have already gone elsewhere. What kind of additional compensation did those 11 former employees receive and how large was that compensation? We may only be seeing the tip of the compensation iceberg. What say, Ben?
March 18th, 2009 at 7:02 pm10 Things You Didn’t Know About AIG CEO Edward Liddy
By Debra Bell
Posted March 18, 2009
1. Edward M. Liddy was born Jan. 28, 1946, in New Brunswick, N.J.
2. Liddy graduated from Catholic University of America in 1968 and earned a master’s degree in business administration from George Washington University in 1972.
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3. He worked at Ford Motor Co. before joining G. D. Searle & Co. in 1981, when Donald Rumsfeld was CEO; in 1988, he joined Sears, Roebuck & Co.
4. Liddy oversaw Allstate’s spinoff from Sears in 1995 and was named CEO of Allstate four years later. In 2005, Hurricanes Katrina, Rita, and Wilma cost the insurer more than $5 billion combined. Allstate quickly started an effort to scale back the coverage of homes in catastrophe-prone regions.
5. Just before Liddy took over as Allstate CEO, he told a meeting of about 200 managers that some of them would not be around in a year. Later, he ousted the finance chief and investment officers.
6. In September 2008, Treasury Secretary Henry Paulson chose Liddy to head American International Group. Five years earlier, when Paulson was running Goldman Sachs Group, he also selected Liddy to join that board.
7. In October 2008, just days after AIG received an emergency $85 billion loan from the government, about 70 executives spent a week at the St. Regis resort in Monarch Beach, Calif. The group ran up a bill that included $200,000 for rooms, $150,000 for meals, and $23,000 for the spa.
8. In November 2008, AIG froze executive salaries. Liddy agreed to an annual base salary of $1 in 2008 and 2009.
9. Liddy has served on the boards of Northwestern University and the Museum of Science and Industry in Chicago. He is also a life trustee and former national chairman of the Boys and Girls Clubs of America.
10. He and his wife have three children.
March 18th, 2009 at 7:08 pmI wish I could forget what I learned about what the fed means and how it operates. Maybe if I brain myself with a heavy enough household object.
At what point does shadowy deals to just materialize currency start having serious consequences? Maybe were at that point?
March 18th, 2009 at 7:43 pmArhcibald,
March 18th, 2009 at 8:00 pmHellloooo Peachycheeks.
Come give us some LOVIN!
Until these RepubliCon and Corporate Crooks are in prison, they will continue their crime spree. And yes, the Federal Reserve is a criminal organization.
March 18th, 2009 at 8:23 pmHi Archie:
March 18th, 2009 at 8:41 pmWanna talk cok? Tell the truth Archie B you don’t know whether to shit or go blind as they say. I can f uck with you whenever I want and you are helpless…
weird porn link?
March 18th, 2009 at 9:04 pmUh, like, since the Federal Reserve is a CORPORATION, and one that has as its board memebers the 13 big banks of the Country, then uh, would we not be seeking, compensation, uh, from the muddafuggas who allowed P(A)IG to give out the bonuses?
March 18th, 2009 at 9:34 pmFriggen Chat Porn Spammer.
Please Flag the a$$hat posts whenever you see them.
They are attempting to ride the coattails of TP’s success by inserting as many links as possible into as many threads as possible so thier “hitcount” on search engines goes up.
This is dispicable ,as is their trade. And TP monitors should be on top of it. Allowing it to continue only sullies thier good name.
March 18th, 2009 at 10:10 pm