Basket Case Insurer Gets $170 Billion from Taxpayers, Still Pays Huge Bonuses

Dan Gillmor is a BoingBoing guest-blogger.

In the get-out-the-torches-and-pitchforks category comes this news:

pitchforkDespite receiving $170 billion in federal aid and recording a staggering loss for the last quarter, insurance giant American International Group is doling out tens of million of dollars in bonuses this week to senior employees.

While AIG agreed to pay the bonuses months before the government's rescue of the company began, the matter still is a source of anger for government officials. In a phone call on Wednesday, Treasury Secretary Timothy F. Geithner told AIG Chairman and chief executive Edward M. Liddy that the payments were unacceptable and needed to be renegotiated, according to an administration source.

The company has since agreed to change the terms of some of these payments. But in a letter to Geithner, Liddy wrote that the bonuses could not be cancelled altogether because the firm would risk a lawsuit for breaching employment contracts. Liddy also expressed concerns about whether changing the bonuses would lead to an exodus of talented employees who are needed to turn the company around.

"We cannot attract and retain the best and brightest talent to lead and staff the AIG businesses -- which are now being operated principally on behalf of the American taxpayers -- if employees believe that their compensation is subject to continued and arbitrary adjustment by the U.S. treasury," Liddy wrote.

That would be the "best and brightest" sleazeballs who created this train wreck of a company, who were principal culprits in the tanking of the global economy? These people should be drawing unemployment checks, not stealing taxpayers' money.

I started a #pitchforks Twitter hashtag a while back, and this is precisely why.

(Photo by blhphotography)