WASHINGTON — In his short time in office, true bipartisanship has eluded President Obama. Now, because Obama waited to use his considerable bully pulpit, Democratic and Republican House and Senate leaders and rank-and-file members are united in denouncing bonus payments to AIG hedge fund honchos made on Obama’s watch.
Somewhat tardy, Obama on Monday shared the instant outrage real people are having over the $165 million in bonuses just paid to the bailed-out American International Group. Obama ordered Treasury Secretary Timothy Geithner to “pursue every single legal avenue to block those bonuses and make the American taxpayers whole.”
An angry Obama — at the top of a small business event at the White House — said, “This is a corporation that finds itself in financial distress due to recklessness and greed. Under these circumstances, it’s hard to understand how derivative traders at AIG warranted any bonuses, much less $165 million in extra pay. I mean, how do they justify this outrage to the taxpayers who are keeping the company afloat?”
What’s the cliche that works here? Closing the barn door after the horses left?
Just last month, when Obama was selling his stimulus package, he made a speech pledging to crack down on excessive payments to executives overseeing greedy, failing companies needing taxpayer money to keep their doors open.
“But what gets people upset — and rightfully so — are executives being rewarded for failure,” Obama said on Feb. 4. “Especially when those rewards are subsidized by U.S. taxpayers.”
Obama added, “For top executives to award themselves these kinds of compensation packages in the midst of this economic crisis is not only in bad taste — it’s a bad strategy — and I will not tolerate it as president.”
Obama’s Monday sermon might better have been delivered last Wednesday, when Geithner was negotiating with AIG chairman and CEO Edward Liddy, the former chief executive of Northbrook-based Allstate insurance. Taxpayers handed $170 billion to the multi-national insurance giant and own 80 percent of the outstanding shares.
Geithner won some concessions from Liddy, cutting back on future salaries and bonuses, after they talked about compensation arrangements. Still, Liddy did pretty well. Geithner caved when it came to AIG’s basic assertion: The New York-based insurer had 400 workers at its financial products division — hedge fund traders and risk managers — with contract commitments that had to be honored.
An internal White House memo being circulated on Sunday — as outrage over the AIG bonuses was growing — said folks at the White House hit the law books and concluded the payments could not be stopped without exposing taxpayers to lawsuits.
That tune changed Monday, when Obama sent Geithner back to Liddy for a do-over and to see if the money can be recovered. The Treasury Department wants to tie the next $30 billion payment to AIG to getting some of the “excessive” bonus money back.
If AIG doesn’t get all that $30 billion, what are they going to do? Sue?
Duckworth footnote
Some readers have inquired why Illinois Veterans Affairs chief Tammy Duckworth has not been confirmed yet as an assistant secretary of veterans affairs, after being tapped by Obama on Feb. 3. The answer is the process is moving slowly. Duckworth was officially nominated Monday. A confirmation hearing is April 1.
Quigley footnote
House Democratic nominee Mike Quigley hits Washington for a few days starting today. Illinois congressional Democrats host a fund-raiser for him on Wednesday night.
