Tuesday, March 17, 2009

Sen. Jeff Merkley Speaks Out About AIG Situation

Yesterday I wrote a post about how Sen. Jim Webb had stepped up to the plate to call for more accountability in regards to AIG giving it's employees millions upon millions of dollars in bonuses even though the company took billions upon billions (with a b) of dollars in taxpayer money to be bailed out instead of going into bankruptcy.

It appears as though Sen. Webb was correct in stating that there was "nearly universal agreement in the Senate that AIG, the recipient of nearly $200 billion in U.S. taxpayer dollars, is out of line by offering excessive bonuses" as a group of senators, including Sen. Jeff Merkley from Oregon, sent a letter to the CEO of AIG demanding that he renegotiate the contracts or be forced to immediately pay back the taxpayers an amount equivalent to the bonuses that were delivered.
Dear Mr. Liddy,

We write today to express our outrage at American International Group’s recently revealed multi-million dollar bonus payments. In these perilous economic times, it is unconscionable for the American taxpayer to find out that the very employees responsible for running the company into the ground have now received “performance-based” awards that are hundreds of times as large as the average American’s yearly salary. If these contracts are not renegotiated immediately, we will take action to make American taxpayers whole by recouping all of the bonuses that AIG has paid out to its financial products unit, which, by all accounts, is primarily responsible for the near-failure of the company and the devastating impact on the global financial markets.

For a company that would not exist anymore but for a $170 billion taxpayer funded rescue, it is simply morally unacceptable to spend $165 million on bonus payments, and especially offensive to spend $450 million over the next two years rewarding the employees that helped fuel the nation’s financial crisis. Given the fact that it was the employees in this unit that brought your firm to the brink of bankruptcy and caused such havoc in the world, rewarding them is not only morally reprehensible, but entirely indefensible on any business grounds. It is the grossest perversion of the idea of a “performance bonus” imaginable. In America, we believe in rewarding success. AIG is attempting to reward the most extreme failure.

We insist that you immediately renegotiate these contracts in order to recoup these payments and make the American taxpayer whole. We stand ready to take the difficult, but necessary step of working to enact legislation that would allow the government to recoup these bonus payments, perhaps by imposing a steep tax-- as high as 91 percent--that will have the effect of recovering nearly all of the bonuses that have been paid out since AIG turned to taxpayers for help.

At a time when families across the country are struggling to make ends meet, and hundreds of thousands of Americans are losing their jobs each month, the hubris of this company, and these employees, to demand taxpayer assistance for these bonus payments is simply and plainly unacceptable. We urge you to bring your employees to the table to renegotiate these contracts immediately. We expect that you will report back to Congress on your efforts to recoup these payments in short order. Thank you for your prompt attention to this matter.
At a Senate hearing, Sen. Jeff Merkley also delivered a speech that spoke about the public outrage surrounding the business practices at AIG.

No comments:

Post a Comment