AIG Mess Turns Into Political Blame Game

3 HOURS 36 MINUTES (March 18)

- Responding to the public furor over the $165 million in bonuses paid to executives at American International Group, the insurance giant's CEO told Congress Wednesday that some of his employees have begun returning the bailout money. Edward Liddy's sworn testimony at a congressional hearing came as President Barack Obama and the White House have been scrambling to calm the critics.
The Associated Press examines how the White House and Democratic lawmakers are the target of some of the anger around the bonuses.

President Barack Obama's administration is under fire for the way it reacted to news that AIG awarded bonuses to executives despite receiving billions in federal bailout funds -- funds granted by both his administration and George W. Bush's.

President Barack Obama is facing questions that have become cliche in times of scandal: What did he know about the bonuses, and when did it know it?
AIG has received billions of dollars in federal aid since September, with the latest infusion -- $30 billion -- granted March 2. On Monday, Obama himself expressed outrage at the bonuses, but critics have asked why his administration didn't sound the alarm bells sooner.
The Washington Post reports that Obama didn't learn about the bonuses until Thursday, two days after AIG told Treasury Secretary Timothy Geithner that the payments were going out.
The story also points out that the bonus payments were permitted under the financial bailout that President George W. Bush signed into law before he left office.
"Although the bonuses were permitted under the terms of the 2008 bailout bill, the payments have triggered alarm, particularly among Republicans, about oversight of the way the money is spent," the Post says.
Who's to blame in all this? The Obama administration for not being vigilant enough about the way the bailout is going? The Bush administration for approving a flawed plan? James Quinn, a Wall Street correspondent for Britain's Telegraph, suggests that Congress also bears some responsibility. He notes that a provision in the economic stimulus bill that Congress passed earlier this year would have limited bonuses to $100,000, and taxed any payouts bigger than that at 35 percent. But that provision got killed somewhere along the way as the bill made it through Congress, he said.
Of course, people shouldn't forget about Wall Street itself. In a column today, Washington Post columnist Steven Pearlstein expresses disbelief that AIG believed it was fine to hand out bonuses under these circumstances.
"You have to wonder what else has to go wrong, how much more wealth will need to be destroyed, before the people on Wall Street get the message that it's no longer business as usual," he writes.
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Key Dates in the AIG SagaSusan Walsh, AP8 photos March 18: Testifying under oath at an intense congressional hearing, AIG CEO Edward Liddy says he's appealed to employees at the insurance giant to return at least half the $165 million post-bailout bonuses. Liddy says some workers already have stepped forward to give some of that money back.

President Barack Obama's administration is under fire for the way it reacted to news that AIG awarded bonuses to executives despite receiving billions in federal bailout funds -- funds granted by both his administration and George W. Bush's.

As well as Bush, Obama is culpable for having knowledge of the part that limited bonuses being stricken.

I think Obama should be questioned, under oath as to the depth of involvement he has with AIG.

politician = liar

No bailout should have been offered without the explicit demand to nullify any previous agreements as seen fit by a responsible advocate of the taxpayers. Contracts CAN BE voided and it would have only been expected that those receiving bonuses per contract would have willingly sacraficed in order to receive this money they so desperately needed.........
And, yet, my friend works in the AIG offices as a peon in the grand scheme of things and gets no raise, is made to put out more for her benefits and they are facing lay offs. What's wrong with the picture!!!????

Congress also bears some responsibility. He notes that a provision in the economic stimulus bill that Congress passed earlier this year would have limited bonuses to $100,000, and taxed any payouts bigger than that at 35 percent. But that provision got killed somewhere along the way as the bill made it through Congress, he said.

Who voted to kill the provision?
Why are they being protected from scrutiny?

Dodd changed the bill at the behest of someone in the administration.

Find out who initiated the change and burn them and Dodd.
Do you suppose there could be real accountability or you figgure they'll just pay a sacrificial Lamb to take the fall?

Obama took the blame.
Many of those bonus's are being returned. Many have already been received. In full.

A lesson was learned by all those execs this time. Accountability now and in the future will be reckoned with. Me thinks that we will see some changes from those bailed out corporations. Some of the auto industries have been making some serious changes in their own contracts and retirements as well as the bonus's of their CEO's

Wait and see now. That's what we will do. Then if need be; we will speak loud once more. Times have chnged. The public now makes their voices heard. Loud and clear. Thanks to the net. The world stands to be heard.
Kat

I can't see Geithner lasting another week. Dodd was quick to roll on him.