Suddenly, AIG is everyone’s new favorite whipping boy.
Not that they don’t deserve it. The outcry about taxpayer-funded bonuses for the managers who got AIG (and all the rest of us) into this mess in the first place has provoked a huge response both in Connecticut and in the nation’s capital.
Here’s a rundown of what’s happening now.
As it turns out, the bonuses are to be paid at AIG’s Wilton facility, which is their Financial Products division. Apparently AIG has cooked up a legal necessity for giving out the bonuses, based on an obscure Connecticut law. So yes, it’s the state of Connecticut’s fault!
Except that Richard Blumenthal is pretty sure that the Connecticut Wage Act, the law AIG is citing, doesn’t justify the bonuses after all.
Meanwhile, there has been a scramble to make sure this can’t happen again. House and Senate Republicans called for the law to be changed. The measure should have bipartisan support, and the bill is already written. Man, they can move fast when they want to.
In Washington, there has been an effort to blame Chris Dodd for the mess, because why not? It’s not as if he isn’t already down. Aim your kicks well, gentlemen. However, Media Matters has uncovered the uncomfortable fact that Dodd is not to blame after all. So Fox Business and the Drudge Report weren’t accurate? I may have to rethink my worldview.
Our House delegation has been busy, as well. Rep. Joe Courtney spearheaded an effort to send a letter to Treasury Secretary Geithner demanding a full accounting of the bonus situation. It was cosigned by 94 others. Here is a .pdf of the letter.
Rep. Chris Murphy will be holding a conference call later today to announce legislation that would block these kinds of taxpayer-funded bonuses in the future.
As of now, it looks like AIG will have to pay back the money, which amounts to about $165 million. That may be the first strong stand Secretary Geithner has taken. Good for him.
That’s where things stand right now. If I had to guess, those AIG guys probably aren’t going to get to keep their bonuses. They will, however, become one of the bywords of economic greed, and a rallying point for those who want to either punish the system, or tear it all down entirely.