Today’s newspapers are overflowing with displays of indignation about the failed insurance conglomerate, AIG using the gazillions of dollars it got from the feds as a bailout, to – are you ready? — sub-bail out foreign banks and to hand out $1 million to each of 73 people in its financial products unit that (in the words of the New York Times) was “responsible for creating the exotic derivatives that caused A.I.G.’s near collapse.” That sounds pretty bad, but you ain’t heard nothin’ yet. These payouts have been defended as “retention” bonuses whose purpose is to retain the best employees who otherwise might quit and go somewhere else, although why anyone would want to retain this particular bunch of jerks who brought this calamity about is a mystery. See Jackie Calmes and Louise Story, 418 Got A.I.G. Bonuses; Outcry Grows in Capital, Mar. 18, 2009, at p. A1
It turns out that 52 people at AIG who received a total of $33.6 million in such bonuses have left the company anyway. So much for “retention.”
And while all this plundering of public funds has been going on, our Glorious Leaders in the federal government, who have been the source of all that loot (pun intended) tell us that they didn’t know nothin’ and it never occurred to them that AIG would use the taxpayers’ funds to hand out bonuses as it always has, so they took no preventive precautions. Reminds us of Sergeant Schultz in “Hogan’s Heroes,” who would roll his eyes and say “I know nosing. Nosing!” Yeah. Right. It just plumb never occurred to the aforementioned Glorious Leaders that AIG might hand out bonuses out of the money it received to keep it from going under. Your tax money at work.
And those are the government folks whose decisions relating to the use of eminent domain are impervious to review because, as we are told by our betters, they are “well nigh conclusive.”
Follow up. It turns out that the press coverage on which we relied in the above post was wrong. So what else is new?
A completely different story has now come to light in the form of an op-ed by Jake DeSantis (formerly with the AIG Financial Products Unit), entitled Dear A.I.G., I Quit, N.Y. Times, March 2009, p. A25. DeSantis explains that the people responsible for the AIG disaster are not the ones who are being pilloried in the press. According to him, some good people who had nothing to do with the creation of those “toxic assets” were asked to stay with AIG and do what they could to clean up the mess. It was in consideration of their agreement to make their best effort in that regard that they were promised those “bonuses.” We use quotation marks because if this is true then these payments were not bonuses (which we define as discretionary payments rewarding outstanding performance) but rather agreed-upon and contracted-for compensation.
We strongly suggest that you read DeSantis op-ed. If true, it amounts to a stinging j’accuse directed at Congress, the press and the new AIG CEO who first negotiated those “bonuses” and then threw those who took on this thankless rask to the wolves.