Read our lips: No new bonuses

By
Bill Press                                                                          Read Spanish Version  

In
her memoir, "Madam Secretary," former Secretary of State
Madeleine Albright recounts an ongoing debate among members of the
Clinton Cabinet about sending U.S. troops to Bosnia. After Gen. Colin
Powell, then chairman of the Joint Chiefs of Staff, had repeatedly
argued against the use of force, a frustrated Albright turned to him
at one point and asked: "What are you saving this superb
military for, Colin, if we can’t use it?"

It’s
too bad Albright wasn’t around a couple of weeks ago to turn to
Treasury Secretary Tim Geithner and ask: "Why did we buy this
company, Tim, if we can’t deny their executive bonuses?"

There
is simply no justification for rewarding executives of AIG with those
obscene, unearned and undeserved bonuses. None. And his bungling of
the issue raises even more questions about Geithner’s fitness for the
high office of Treasury Secretary than his failure to pay his taxes.

Frankly,
Geithner’s story just doesn’t add up. He says he first learned about
the bonuses on Tuesday, March 10, five days before they were due to
be paid. Why? Treasury Department staff and officials of the Federal
Reserve had known about them for at least three months. Once he took
over as secretary, didn’t Geithner do his homework?

As
soon as he found out about them, Geithner complained to AIG Chairman
Edward Liddy. But he failed to inform President Obama about the
explosive bonuses until Thursday evening, March 12, 48 hours later.
It wasn’t until Monday morning, March 16 — the day after his top
economic advisors condemned the bonuses but insisted "their
hands were tied" — that the president expressed his own outrage
and demanded that the Treasury Department explore every available
legal option to stop the bonuses.

By
that time, Obama’s expressed outrage came too little, too late. AIG
had already sent out its bonus checks, by direct deposit, on Saturday
night, March 14. All of which could have been avoided if only
Geithner had told Liddy: "You’re fired!" Or Obama had said
the same thing to Geithner.

Washington
is the world capital of spin. But we’ve never heard such absurd
political spin as we have from those trying to defend the AIG
bonuses.

We
had no choice but to pay the bonuses, we’re supposed to believe,
because they were part of signed contracts and, harrumphed
Obama economic czar Larry Summers, "The government cannot just
abrogate contracts." Baloney. Ask auto workers about wage and
benefit contracts they were forced to break as part of the
government’s rescue plan. The fact is, previously signed contracts
are broken every time a company goes bankrupt. And AIG would be in
bankruptcy if we hadn’t bailed it out.

Besides,
lest we forget, AIG is an insurance company. Since when has an
insurance company been in a hurry to pay claims? Their standard
procedure is to challenge, delay and deny — which they should have
done in this case.

We’re
also supposed to believe that these so-called "retention"
bonuses were necessary to keep skilled executives on the job. In
other words, if we didn’t reward the very people who destroyed AIG,
and helped destroy the American economy, they might leave and go
elsewhere. Let’s hope so! And good luck finding another high-paying
job anywhere in the middle of this recession. Ironically, 52 out of
418 executives did quit AIG — as soon as they picked up their bonus
checks.

It
would be unfair to blame this whole mess on Tim Geithner. There’s
enough blame to go around. Ed Liddy should never have paid them.
Congress should not have removed language limiting bonuses from the
stimulus bill. Hank Paulsen and George Bush should never have allowed
them in the first place.

But
Geither can certainly be faulted for failing to grasp the seriousness
of the issue, and failing to protect both the president and the
American people. What the treasury secretary doesn’t seem to
understand is that a lot has changed since those contracts were first
entered into. AIG has gone from A-OK to IOU. And AIG has a new owner:
American taxpayers.

As
AIG’s new owners, we’re not bound by any pre-existing contracts. We
have every right to say to AIG executives: We’re your new owners.
We’re not going to pay those bonuses. And if you don’t like it, you
can sue us.

We
taxpayers own AIG. So let’s start by ending business as usual.

Bill
Press is host of a nationally syndicated radio show and author of a
new book, "Train
Wreck: The End of the Conservative Revolution (and Not a Moment Too
Soon)." You
can hear "The Bill Press Show" at his Web site:
billpressshow.com. His email address is: bill@billpress.com.
(c)
2009 Tribune Media Services, Inc.