Tuesday, March 24, 2009
Rule of law
There is mounting evidence of something everybody knew, that the AIG employees who returned their retention payments did so under an implicit, if not explicit, threat from the government. New York Attorney General Andrew Cuomo is following in at least some of the footsteps of his predecessor:
An email from the head of a controversial unit at AIG suggests employees who gave up their bonuses did not do so voluntarily, but feared their names would be released if they did not.
The email, obtained by CNBC, states the following: “Please be aware that we have received assurances from Attorney General Cuomo that no names will be released by his office before he completes a security review which is expected to take at least a week. To the extent that we meet certain participation targets, it is not expected that the names would be released, at all.”
There's more at the link.
This is more than a curiousity. Politicians, including the president of the United States, demonized these people, few of whom were actually responsible for AIG's losses and all of whom had worked in reliance on contracts willingly entered into. The flower and the chivalry of the Democratic Party whipped up popular anger for nothing more than political advantage, and their political allies stalked some of those executives at their homes. Then the attorney general of New York, who is supposed to protect the rule of law, threatened to make the names of these people public and expose them to the angry mob unless a high enough percentage of them "participated" in returning the money to AIG. Cuomo, of course, denied that he had blackmailed anybody, but he damns himself with this admission:
In a Monday night news conference with reporters the attorney general said that releasing the names would be in the interest of explaining to taxpayers how their money was used—and that if the money were returned, it would severely diminish if not extinguish the need to release the names.
Huh? Taxpayers know how the money was used, and releasing the names would not have added to their knowledge. Neither does the return of many of these retention payments somehow diminish the interest of taxpayers, whatever it was, in knowing what happened. The only thing that has changed is the need to make a threat.
You know, I used to respect Andrew Cuomo's father, Mario, much as I disagreed with him on almost every issue. I wonder if he is proud of his son today. I hope not.
17 Comments:
By 
, at
Tue Mar 24, 05:01:00 PM:
I don't think there is any question that the bonus recipients were intimidated into returning the money. And they were harassed by a government subsidized organization. It is quite disturbing. Who will they target next?
By , at
Tue Mar 24, 05:21:00 PM:
There's a beautiful political continuity to the fact that Andrew Cuomo is today harassing AIG, and extorting money from it's employees, for his personal political advantage, when he was responsible for the CRA regulations that enabled the company's destruction while employed in the Clinton administration. Of course, AIG is a Greek tragedy itself for sowing the seeds of it's destruction and tilling the fields so carefully, now finally reaping the crop the shareholders so richly deserve.
By , at
Tue Mar 24, 06:30:00 PM:
The flower and the chivalry of the Democratic Party whipped up popular anger for nothing more than political advantage...
As opposed to say Senator Pitchfork Grassley (R-IA)and senior ranking member of the Finance who suggested that the AIG executives "should quit or commit suicide."
By 
Dan Kauffman, at
Tue Mar 24, 08:24:00 PM:
Quite correct and as a member in goodstanding of the Linn County Iowa GOP Central Committee, I intend to give him a piece of my mind on this subject. And if he removes off his Facebook page as a friend so be it
By TigerHawk, at
Tue Mar 24, 08:31:00 PM:
Charles Grassley, representing a midwestern farm state, has long tapped into the anti-bank attitude that simmers below the surface in the Midwest, and he has long demagogued silly issues. Generally, I think he is a good senator, but if I still lived in Iowa I too would give him a piece of my mind on this subject.
But congratulations. You found a Republican who demagogued this issue. You can find a dozen more, I am sure, but Barney Frank and Barack Obama led the charge.
By Kinuachdrach, at
Tue Mar 24, 08:37:00 PM:
As a taxpayer, there is something that I really need to know, since Mr. Cuomo is being so considerate of my interests: What happens to the money that is returned? Who gets it? ACORN??
Any perhaps Mr. Cuomo could clarify something with that well-known tax expert Mr. Git-ner -- If my employer pays me $1 Million (maybe even withholding part of the amount for taxes), and then I decide to write a check for a similar amount to the Treasury, how much tax do I owe on my 1040? (PS I am not a Democrat Cabinet Official, so I can't make use of that deduction).
By , at
Tue Mar 24, 10:36:00 PM:
Dont worry, what goes around is coming right back to Cuomo soon. He has threatened to sue the non-returners in order to avoid discovery should they sue him for violating their privacy. Seems well beyond the mission of his office, especially if his threats are illegal. Mud all around, or a three stooges pie-throwing contest.
Tom
By , at
Wed Mar 25, 12:58:00 AM:
I don't think I agree when you say Taxpayers know how the money was used. I haven't google-hounded the issue, but even so, I have heard almost nothing about the nature of these contracts via the MSM. For instance, how many of the bonuses went to execs in the division of AIG primarily responsible for the whole debacle, or when the contracts were made, or what the salary portion of their compensations amounted to. I have a lot of questions, but of course the biggest is why no one at AIG, or the Administration, or Congress, thought this was going to be a major problem beforehand, when it could have been defused months ago.
By Deplorable Dave, at
Wed Mar 25, 01:29:00 AM:
I think people are missing the point. All those precious high-$$$ contractual bonus payments would have, by law, been nullified in bankruptcy. The government is (because of fear) avoiding bankruptcy but not the bonus cancellations. Get it?
There's a saying for this: You can't have your cake and eat it too. Now can we all grow up and stop squealing like spoiled children?
By , at
Wed Mar 25, 02:17:00 AM:
I'm unable to figure out the legal basis for Cuomo's plan to recoup the money. These people committed no crime, so the basis must be some sort of civil action, but what legal theory would he rely on? Does he even have standing?
Maybe I'm missing something.
By beadlizard, at
Wed Mar 25, 04:21:00 AM:
Don't the people who were intimidated into returning their bonuses have grounds for a suit of their own? How bad does it have to get before the RICO Act applies?
By , at
Wed Mar 25, 07:10:00 AM:
You folks just don't understand. There is no legal theory, no civil response. This is state force, raw and unvarnished. Get used to it, because it's going to be used to go after more and more citizens.
By Elise, at
Wed Mar 25, 02:30:00 PM:
I can't decide if what Cuomo did was blackmail or extortion. He was threatening to release information the employees wanted kept secret unless they paid up - which would seem to make it blackmail.
On the other hand, the information was not harmful in the same way that something like "I know you poisoned your husband" or "I know you're having an affair with your wife's sister" would be. So the reason the employees would pay up would be to avoid the harm they've been threatened with. These seems to me more like "Nice house you've got here. Be a shame if someone fire-bombed it" which would be extortion.
By Elise, at
Wed Mar 25, 02:37:00 PM:
Squealer asks:
For instance, how many of the bonuses went to execs in the division of AIG primarily responsible for the whole debacle, or when the contracts were made, or what the salary portion of their compensations amounted to.
The $165 Million figure Cuomo is making hay with refers to retention (not sales, not performance) bonuses for the employees of AIG-Financial Products - employees, not just executives. Apparently there are other bonuses in the works but the focus is on this number because AIGFP is widely seen as the division that destroyed the world. It’s not clear how fair this is and even if it is fair it looks like the guy who got them into this mess is gone from AIGFP. Maguire’s “Book of the Dead” post goes into this.
Apparently the contracts were signed in April (possibly earlier) of 2008. Again, Maguire's "Book of the Dead" post is useful here.
As for the relationship between salary and retention bonus, the only specific ratio number I have seen is that of Mr. DeSantis, an executive vice president of AIGFP. His ratio of salary to bonus seems to about 1:1,000,000. Literally. One dollar in salary for the past year with a promise of a million dollar bonus if he stuck around, turned down other job offers, and helped AIG sell its commodities business.
You can read his resignation letter here. My guess is that our hopes of AIG recovering enough to pay us all back have diminshed greatly. I hope Andrew Cuomo is tarred, feathered, and run out of town on a rail, alongside the 243 Democrats and 85 Republicans in the House who voted for the 90% clawback bill; and all those in the Administration - including President Obama - who did so much to whip up outrage about the bonuses.
By , at
Wed Mar 25, 02:55:00 PM:
In conversations with friends, Democrats and Republicans, I'm hearing one thing in common: Congress is a failing institution and there is a commonly held and very explicit fear for what they might do next. Specifically, the budget is looming above all our heads and even lefties recognize the folly of spending all this money we do not have.
By , at
Wed Mar 25, 04:06:00 PM:
When he was running the HUD THUGS under KING WILLIAM THE FINK it was ANDREW COMMO who tried to blackmail the gun industry with stupid lawsuits IN THIS CASE FATHER AND SON ARE ALIKE ROTTEN TO THEIR FILTHY CORES TWO VILE VILLIANS IN DICK TRACYS ROUGES GALLERY
By Purple Avenger, at
Wed Mar 25, 04:15:00 PM:
Who will they target next?
Pretty much anyone "wealthy" enough to not be in a bread line.
