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Fallout: The Financial Crisis

Lawmakers look to reclaim AIG bonuses

Steve Henn Mar 17, 2009
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Fallout: The Financial Crisis

Lawmakers look to reclaim AIG bonuses

Steve Henn Mar 17, 2009
HTML EMBED:
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TEXT OF STORY

Kai Ryssdal: They were lining up to get to the microphones on Capitol Hill today. Senators and representatives alike promising to do all they can to get the AIG bonus money back. Speaker Nancy Pelosi said she’s hoping for legislation on it as soon as next week. Marketplace’s Steve Henn has more now on how Congress might actually be able to turn things around.


STEVE HENN: New York’s Democratic Sen. Chuck Schumer had a message today for the CEO of AIG.

CHUCK SCHUMER: Mr. Liddy, I urge you to fix this mess. Because let me tell you something, we are all fed up, and if you don’t fix it — we will.

Schumer and a bipartisan group of senators sent a letter to Liddy this morning saying he should tell executives that got the bonuses to return them.

SCHUMER: Because if they don’t, we plan to virtually tax all of it.

More than a dozen lawmakers are drafting bills aimed at taxing the AIG bonuses into oblivion, creating special tax rates of say 90 or a 100 percent.

Walker Todd is a former Federal Reserve attorney. He says investigators also need to look for accounting fraud at the company.

WALKER TODD: If it can be shown that the books were improperly prepared then the payment of these bonuses would be fraudulent as the tainted fruit of the tainted tree.

And that seems to be where New York’s Attorney General Andrew Cuomo is headed. Cuomo revealed today that 11 executives who got more than a million dollars each for “retention bonuses,” received them after leaving AIG.

And the bonus payments were not based on the executives’ or the company’s performance.

Instead, Cuomo said the contracts guaranteed executives the same bonus they got in 2007, even though by the time these contracts were signed in March of 2008, it was clear AIG was headed for disaster.

In Washington, I’m Steve Henn for Marketplace.

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