First they came for the AIG Executives...

... and many are not speaking up:

Iowa Sen. Charles Grassley suggested on Monday that AIG executives should take a Japanese approach toward accepting responsibility for the collapse of the insurance giant by resigning or killing themselves.

The Republican lawmaker's harsh comments came during an interview with Cedar Rapids, Iowa, radio station WMT. They echo remarks he has made in the past about corporate executives and public apologies, but went further in suggesting suicide.

"I suggest, you know, obviously, maybe they ought to be removed," Grassley said. "But I would suggest the first thing that would make me feel a little bit better toward them if they'd follow the Japanese example and come before the American people and take that deep bow and say, I'm sorry, and then either do one of two things: resign or go commit suicide.

"And in the case of the Japanese, they usually commit suicide before they make any apology."

That from a Republican... this from a Democrat:

Eleven AIG execs who got $1 million-plus "retention" bonuses to keep them at the firm have already left - including one who walked away with $4.6 million.

The bombshell revelation from State Attorney General Andrew Cuomo came as Congress warned AIG execs to return their millions in bonuses - or face a possible new law taxing those payouts at up to 100%.

"They should voluntarily return them. If they don't, we plan to tax virtually all of it," New York Sen. Chuck Schumer declared on the Senate floor.

"To those of you getting these bonuses: be forewarned, you will not be getting to keep them."

You might agree that bonuses paid to execs out of what in essence are taxpayer coffers is heinous... but what we're seeing here, government officials making outrageous threats and demanding even more outrageous behavior, is far far worse.

And you must know that there's more that meets the eye on these bonuses than many are telling:

The president suggested on Monday that we just tear up those bonus contracts. He told the Treasury secretary, Timothy F. Geithner, to use every legal means to recoup taxpayers’ money. Hard to argue there.

“This isn’t just a matter of dollars and cents,” he said. “It’s about our fundamental values.”

On that last issue, lawyers, Wall Street types and compensation consultants agree with the president. But from their point of view, the “fundamental value” in question here is the sanctity of contracts.

That may strike many people as a bit of convenient legalese, but maybe there is something to it. If you think this economy is a mess now, imagine what it would look like if the business community started to worry that the government would start abrogating contracts left and right.

As much as we might want to void those A.I.G. pay contracts, Pearl Meyer, a compensation consultant at Steven Hall & Partners, says it would put American business on a worse slippery slope than it already is. Business agreements of other companies that have taken taxpayer money might fall into question. Even companies that have not turned to Washington might seize the opportunity to break inconvenient contracts.

Surely you must know that if the government can do this to AIG execs, if they can abrogate contracts just because they can, then they can do anything to you.

Surely you do know that don't you?

Comments

[Locutisprime]

Astute observations Rick.

[Mommynator]

This is how it's going to go:

- We can't constitutionally do anything about private associations and contracts.

- But you took public money, so we own you.

- Therefore, we can make you break all your private contracts and commitments.

[tim aka The Godless Heathen]

This is exactly why I would rather see my business fail than take any money from the government.

Servitude isn’t my style. I’d rather clean toilets and make an honest living than be beholden to the government.

All this chatter about the bonuses, (which are something like one tenth percent of all the bailout money to AIG), is comical. Our government is spending TRILLIONS and everyone’s attention is focused on what, 165 million?

Iran is closer to going nuclear every single day, North Korea is going to launch a long range missile soon, Russia is sending ships (and missiles?) to Venezuela and Cuba, Mexico is about to implode and we’re freakin’ talking about some stupid bonuses.

Not to mention veterans health care, assault on the 2nd amendment, giving citizens rights to terrorist scum, taking away pilots guns…and on and on…

Sometimes I just wann’a move to a shed in Montana, live off the land and never turn on another radio or television again.

[chuck aka xtnyoda]

This admin knew about the frigging' bonuses long before they were given... the admin wanted them given... so they could feign this indignation.

This is a hype job by the admin... a desperate effort to look "noble" in the midst of their efforts to deflate the American Dream.

It's a flank job and another evidence to their total lack of character.

Brood of vipers.

[Holly]

Theives

[Irish eyes are watchin' and weepin']

Oh Oh Obama,

Sure then wasn't it you that said he was going to go over the budget line by line and make sure there were no more shenanigans
such as "pork" and "earmarks" and the kind of crap that was just pulled by AIG. You need clean up your magnifying glass and your act.

[renee]

Contract law is protected under the constitution and any change to a contract after it's been agreed to by both parties cannot be changed without due representation and consideration. AIG employees are charged with fixing or trying to reduce the risk to the rest of the financial market.

Is it possible they could fire everyone involved and find replacements that have the know how and experience to undo what was done? I don't know the answer to that question but I'm guessing some people were fired and others were hired, their current CEO is an example of that. He explained to Congress yesterday, in order to retain employees that are experienced and knowledgeable in a company that is basically being dissolved to pay back federal monies it took to keep it solvant long enough to undo the mess they created and so prevent hundreds of other large institutions from also failing, and the insurance industry to reabsorb and support existing assets... AIG offered retainer bonuses, stating if they accomplished a subset of objective goals to that end, they would be paid a bonus.

Have you ever tried keeping you best employees in what is a sinking ship? Congress instead of seeing the value of retaining employees that had a chance of undoing what was done, demanded that all bonuses should be stripped from the contract, which is illegal and cuting your nose off to spite your face.

Lawyers came back and advised Congress that one cannot simply strip bonuses without representation. Congress was pushing this bill through without enough time to allow that process to occur and was advised that they would end up in court and most likely lose if they removed the bonuses already agreed to. So, they removed it and gave the bonuses back. Then, they all signed off on that bill... with the bit about the bonuses in it.

Those that weren't in those late night closed door negotiations could have, should have, and were obligated to read it before they voted yes on it. Those that said they didn't know about it and were in those close door negotiations, lied and said they didn't know about it. Then the same parties turn around and make a huge issue over the bonuses and pass a bill to tax these employees unfairly, giving them a penalty without representation or consideration in a legal contract.

It will most certainly end up in court, if it doesn't, this is a major blow to our constitution and contract law. Court is where it should have headed to begin with so that the motives of AIG could be examined, if indeed they were trying to retain employees that could undo the mess they created or if they were just trying to protect certain employees from consequences and loss. It could be the reason that solution wasn't put forward is that certain Congressmen who were key in negotiating behind doors may have had knowledge of those motives and have some liability, too.

[Mommynator]

Unfortunately, renee, accepting TARP money was the government camel's nose under the tent. This will not end well by any wild stretch of the imagination.