Perp Walks Instead of Bonuses

There must be a criminal investigation of
the AIG debacle, and it looks as if New York's top lawman is on the
case. The collusion to save this toxic company in order to salvage the
rogue financiers who conspired to enrich themselves by impoverishing
millions is being revealed as the greatest financial scandal in U.S.
history. Instead of taking bonuses, the culprits should be taking perp
walks.

There must be a criminal investigation of
the AIG debacle, and it looks as if New York's top lawman is on the
case. The collusion to save this toxic company in order to salvage the
rogue financiers who conspired to enrich themselves by impoverishing
millions is being revealed as the greatest financial scandal in U.S.
history. Instead of taking bonuses, the culprits should be taking perp
walks.

I'm not just referring to the swindlers in
the Financial Products Subsidiary of AIG who devised and sold those
insurance policies on derivatives that brought the world economy to its
knees. They do seem deserving of a special place in hell, and
presumably the same divine power that according to Scripture labeled
usury a high moral crime and threw the money-changers out of the temple
will consider that outcome.

However, the enablers are the AIG leaders
who, as New York Attorney General Andrew Cuomo revealed Tuesday, signed
those bonus contracts a year ago to reward the very people "principally
responsible for the firm's meltdown." That's a cool $44 million divided
among the top 10 shysters, even though the depth of their chicanery was
well known to top management.

As Cuomo noted in a letter to Rep. Barney
Frank: "The contracts shockingly contain a provision that required most
individuals' bonuses to be 100% of their 2007 bonuses. Thus, in the
spring of last year, AIG chose to lock in bonuses for 2008 at 2007
levels despite obvious signs that 2008 performance would be disastrous
in comparison to the year before."

The lame argument that those bonus-baby
employees needed to be retained in order to sort out the mess they had
created was also shot down by Cuomo, who revealed after his office's
initial investigation had pierced AIG's veil of secrecy that "[e]leven
of the individuals who received `retention' bonuses of $1 million or
more are no longer working at AIG, including one who received $4.6
million."

But the $165 million in taxpayer funds
used to reward them is but a sideshow in a far larger drama of moral
decay swirling around the banking bailout. It should not distract from
the many billions, not paltry millions, of our dollars being diverted
to reward the very folks who brought us such misery. Consider the $12.8
billion of the $170 billion that taxpayers gave AIG in bailout funds
that AIG then secretly diverted to Goldman Sachs, a company that
evidently has a lock on both the Treasury Department and the Federal
Reserve no matter which political party is in power. It was the biggest
payoff among those that AIG made to a score of foreign and domestic
financial giants.

The bailout is a response to a banking
crisis that resulted from the radical deregulation pushed by former
Goldman Sachs honcho Robert Rubin when he was President Clinton's
treasury secretary. Another Goldman Sachs
chairman-turned-treasury-secretary, Henry Paulson, in the Bush
administration designed the trillion-dollar bank bailout that will go
down as the greatest swindle in U.S. history.

It was because of Paulson that AIG was
saved from bankruptcy hours after Goldman rival Lehman Brothers was
allowed to go down the drain. Why that reversal of strategy in a
top-secret meeting called by then New York Fed Chair Timothy Geithner,
a Rubin protege and now Barack Obama's treasury secretary? Why was
Goldman's Lloyd Blankfein the only financial industry CEO in
attendance? When that news leaked out, his role was defended as that of
a noninvolved concerned citizen with expert knowledge, and whose firm
had no direct monetary stake in the outcome.

That was a lie.

Goldman Sachs was into AIG insurance
policies for at least $20 billion, which is why the firm got that $12.8
billion while Paulson was in charge. It took six months for the
embarrassing facts to finally come out. The bailout program was
administered by Neel Kashkari, a former Goldman Sachs VP; why are we
not surprised at that?

Another pretend innocent in all this is
AIG's CEO Edward M. Liddy, famed defender of the $440,000 AIG executive
retreat in Monarch Beach, Calif., held on the heels of the taxpayer
bailout. His actions now are defended as mistakes made by a
well-intentioned outsider who decided to work for a dollar a year after
Paulson appointed him head of AIG. That is just garbage.

Liddy was complicit in Goldman Sachs' role
in creating this mess. As a director of Goldman Sachs, he was paid
$685,770 in 2007 and would have come in for some questioning if the
firm had gone down. Liddy even headed its audit committee during the
five years before he resigned that seat to take over AIG in September
2008. As for his salary sacrifice, not to worry; in 2005, when he was
still CEO of Allstate Insurance, he received $26.7 million in
compensation.

What we have here is a rare glimpse into
the workings of the billionaires' club, that elite gang of perfectly
legal loan sharks who, in only the most egregious cases, will be judged
as criminals-Bernard Madoff, former chairman of NASDAQ, comes to mind.
These other amoral sharks, who confiscated billions from shareholders
and the 401(k) accounts of innocent victims, were rewarded handsomely,
rarely needing to break the laws their lobbyists had purchased.

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