Personal Injury Law

AIG Locks Doors Following Death Threats

By Jane Akre

Security guards are outside the suburban Connecticut offices of AIG, American International Group, following death threats and angry letters from the public outraged over bonus payments to executives as part of a federal bailout.  

Some managers did not show up work today and other employees have reportedly resigned.

"It's going to blow up," said a senior Financial Products manager to the Washington Post.  "I have a horrible, horrible, horrible feeling that this is going to end badly."

The insurance giant was slated to receive $170 billion in taxpayer money to avoid a collapse of the world economy. 

The Obama administration is scrambling trying to recoup millions in employee bonuses after it was revealed this weekend they have been promised to retain top executives. 

The President vowed Monday to "pursue every single legal avenue to block these bonuses." However there are contracts that went along with the awards to AIG which may make that difficult.

"This is a corporation that finds itself in financial distress due to recklessness and greed," Obama told politicians and reporters in the Roosevelt Room of the White House reports CNN.

Senate Finance Committee chair Max Baucus, says he is looking at a way to reclaim $165 million in bonuses paid to traders who brought the insurance giant to a global crisis.

Connecticut Sen. Christopher Dodd says the state is considering writing a tax provision that may be able to recoup the bonuses. 

Those bonuses have already been paid out, according to New York Attorney General Andrew Cuomo, who has subpoenaed AIG bosses to determine where the bonus payments are going.

AIG has already promised to scale back 2009 bonuses by at least 30 percent.

AIG issues insurance products and services in the US and 130 countries. The government decided that for AIG to fall could lead to a financial collapse of institutions worldwide.

AIG took the bailouts after real estate took a downturn and the institution linked so-called credit default swaps to the tanking property market. 

AIG's current boss, Edward Liddy, will appear at a congressional hearing Wednesday where he will face tough questions about the bonuses. He insists that retainer bonuses are needed to keep top traders who understand the complex swap products. 

Sen. Charles Grassley of Iowa, speaking to a Cedar Rapids radio station suggested AIG follow the Japanese model and "come before the American people and take that deep bow and say, 'I am sorry,' and then either do one of two things: resign or go commit suicide."

The Troubled Asset Relief Program was established last October under the Treasury Department to purchase about $40 billion in preferred stock.

A poll commissioned by CNN and Opinion Research Corp shows that 41 percent of the public believes distressed banks should be allowed to go under.  #

Full post as published by InjuryBoard on March 17, 2009 (boomark / email).