AIG Scrutiny: Basic Questions for Media and Congress Alike

You know it's bad when even the WSJ's headline screeches about growing wrath toward AIG's bonuses.  


On This Week, Robert Kuttner made the point that auto workers take pay cuts while the big guys fund themselves bonuses -- watch and see if it doesn't piss you off, too.

Retention bonuses for companies on the brink of financial ruin are not new.

KMart paid them when they filed restructuring bankruptcy a few years ago to keep upper management who knew how to run supplier networks or other crucial components from jumping to a healthier business.  Under certain stressed conditions, they can make good business sense.

But, as we reported yesterday, the AIG bonus issue is a bit more complex than simply "is this a retention bonus."

What is most horrifying about this is how little the government appears to have known before doling out the next ladle of public bailout fundage: Did treasury know about these bonuses before doling out TARP monies? How much did they know? We have no idea at this point.

Now THAT is troubling.

The House Financial Services Committee has a hearing scheduled on risk and fraud on Wednesday at 10 am ET. One thing that will need to be determined going forward is whether this is a regular AIG business practice or some sort of "fraud in the inducement" scheme to fund their own bonus payola with ginned up demands for taxpayer moolah.

On the off chance that the media and Congress have no clue what to scrutinize, here are some basics:

#story_page_ below_article

Understand the importance of honest news ?

So do we.

The past year has been the most arduous of our lives. The Covid-19 pandemic continues to be catastrophic not only to our health - mental and physical - but also to the stability of millions of people. For all of us independent news organizations, it’s no exception.

We’ve covered everything thrown at us this past year and will continue to do so with your support. We’ve always understood the importance of calling out corruption, regardless of political affiliation.

We need your support in this difficult time. Every reader contribution, no matter the amount, makes a difference in allowing our newsroom to bring you the stories that matter, at a time when being informed is more important than ever. Invest with us.

Make a one-time contribution to Alternet All Access, or click here to become a subscriber. Thank you.

Click to donate by check.

DonateDonate by credit card
Donate by Paypal

Don't Sit on the Sidelines of History. Join Alternet All Access and Go Ad-Free. Support Honest Journalism.