For Immediate Release
Feingold Praises Obama Effort to 'Pursue Every Legal Avenue' to Block AIg Bonuses
Yesterday, Feingold Wrote Treasury Secretary Geithner Asking What Legal Options Have Been Explored to Cancel Bonuses for AIG Executives
WASHINGTON - U.S. Senator Russ Feingold is praising President Barack Obama's effort to "pursue every legal avenue" to block $165 million in bonuses to executives of the American International Group (AIG) a day after Feingold wrote to Treasury Secretary Timothy Geithner requesting more information on what legal options have been explored for canceling the bonuses. During remarks made at a small business event today, President Obama said he asked Geithner to pursue every legal avenue to block these bonuses and make the American taxpayers whole. AIG received $170 billion in taxpayer money through the Wall Street bailout and eighty percent of the insurance giant is taxpayer-owned.
"President Obama is doing the right thing by pursuing all legal options to cancel these bonuses," Feingold said. "At a time when millions of Americans are losing their jobs and trying to make ends meet, it is outrageous that a company that has been bailed out by the taxpayers for its mistakes would turn around and pay its executives such a staggering sum of money."
In his letter yesterday, Feingold, who voted against the Wall Street bailout, questioned AIG's defense of the bonuses. AIG's government-appointed chairman, Edward Liddy, reportedly claimed in a letter to Geithner that the bonuses are needed because otherwise, AIG "...cannot attract and retain the best and the brightest talent to lead and staff the AIG businesses."
"Since some of the recipients of these bonuses may have been responsible for the practices that drove the company to the brink of collapse - jeopardizing the financial system - I am sure many Americans will question whether they are indeed "the best and the brightest" and whether they deserve this level of taxpayer-subsidized compensation," Feingold wrote.
A copy of Feingold's March 15th letter is below.
March 15, 2009
The Honorable Timothy Geithner
Secretary of the Treasury
Department of the Treasury
1500 Pennsylvania Avenue, N.W.
Washington, DC 20220
Dear Mr. Secretary:
I deeply troubled by reports that the American International Group (AIG) intends to pay about $165 million in bonuses to its executives. As you know, the federal government has provided AIG with $170 billion in taxpayer money and currently owns 80% of the company. I share your outrage that a company which has been bailed out by the taxpayers for its mistakes would turn around and pay its executives such a staggering sum of money.
Reports suggest that AIG's chairman claims AIG is legally obligated to pay some or all of these bonuses. I write to ask why any bonuses would be legally required, given the company's abysmal performance. In addition, I would like to know what legal options have been explored for canceling the bonuses or recouping the money from the recipients, and in particular whether the Administration has considered holding AIG executives accountable in court for any breaches of their fiduciary duties to the shareholders.
Reports also suggest that AIG's chairman claimed that the bonuses are needed to ensure the company can "attract and retain the best and the brightest talent to lead and staff the AIG businesses." Since some of the recipients of these bonuses may have been responsible for the practices that drove the company to the brink of collapse - jeopardizing the financial system - I am sure many Americans will question whether they are indeed "the best and the brightest" and whether they deserve this level of taxpayer-subsidized compensation.
I look forward to your prompt response.
Russell D. Feingold
United States Senator
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