Saturday, March 14, 2009

Geithner doesn't even slap AIG's Liddy's wrist

Treasury determined that it didn't have the legal authority to block AIG's bonuses even though the taxpayer has ponied up $170 billion to AIG!

Look at the story, led by our pussy-footed Treasury Secretary, Timmy Geithner:

Treasury Secretary Timothy Geithner has asked that the company scale back future bonus payments where legally possible, an administration official said on Saturday.

This official, who spoke on condition of anonymity because of the sensitivity of the issue, said on Saturday that Geithner had called AIG Chairman Edward Liddy on Wednesday to ask that Liddy renegotiate AIG’s current bonus structure.

In a letter to Geithner dated Saturday, Liddy informed Treasury that outside lawyers had informed the company that AIG had contractual obligations to make the bonus payments and could face lawsuits if it did not do so.

Liddy said in his letter that “quite frankly, AIG’s hands are tied” although he said that in light of the company’s current situation he found it “distasteful and difficult” to recommend going forward with the payments.

In his letter, Liddy told Geithner, “We believe there will be considerably greater flexibility to reduce contractual payments in respect of 2009 and AIG intends to use its best efforts to do so.”

But he also told Geithner that he felt it could be harmful to the company if the government continued to press for reductions in executive compensation.

Is it any wonder that the futures on Geithner lasting until the end of the year are trading at 24?

Will Tim Geithner depart as Secretary of the Treasury?
Tim Geithner to depart as Secretary of the Treasury before midnight ET on 31 Dec 2009



Ju said...

This is sick. Why in the world are we helping these companies that keep sending millions to people who do not know how to run a company? Furthermore, I fear this is just the tip of the iceberg--there are so many ways these funds are hurting 'average Joes' but benefiting those in high places. Look what Enterprise rent-a-car did to get bailout funds:

Palmoni said...

Yeh I was going to post that a few days ago.

At least now you did!