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President Obama and Treasury Secretary Timothy Geithner at the White House Picture: AP Source: The Australian
PRESIDENT Barack Obama, trying to contain a political firestorm, instructed Treasury Secretary Timothy Geithner to “pursue every legal avenue” to block $US165 million ($250 million) in bonuses to American International Group executives who were in part responsible for the company’s near collapse.
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Meanwhile,coach handbags outlet, New York Attorney General Andrew Cuomo issued subpoenas to AIG seeking the names of those employees who received bonuses at the financial-products subsidiary. AIG has informed the attorney general’s office that the bonus payments were made on Friday.
“This is a corporation that finds itself in financial distress due to recklessness and greed,” Mr Obama said. “Under these circumstances, it’s hard to understand how derivative traders at AIG warranted any bonuses,iphone dock cradle, much less $US165 million in extra pay. How do they justify this outrage to the taxpayers who are keeping the company afloat?
“This isn’t just a matter of dollars and cents. It’s about our fundamental values,” he added.
It was unclear what legal options the government can pursue. A White House official said the Treasury Department will use a planned $US30 billion infusion into AIG to compel the company to repay the bonuses to employees of its financial-products group, which is responsible for selling the exotic financial instruments that brought the company to near-collapse.
The infusion, announced on March 2,wholesale coach tote bag,coach tote bag won’t be finalised until the company and the Treasury work up repayment options, the official said. The bonuses to the financial-products division were “found to be completely unacceptable given that AIG is already surviving on taxpayer funds,” the official said.
The subpoenas from the New York attorney general’s office came after Mr Cuomo earlier asked for the names of bonus recipients, their jobs, their 2008 performance reviews and for the names of individuals involved in setting up the retention plan. In a letter, Mr Cuomo gave the company until 4 pm New York time (7am AEDT) to respond to his request for the information. His office has been investigating AIG bonuses since last fall.
“Covering up the details of these payments breeds further cynicism and distrust in our already shaken financial system,” he wrote in the letter.
Mr Cuomo said he is looking into whether any of the individuals receiving payments were involved in conduct that led to the insurer’s near-collapse; whether the contracts may be unenforceable for fraud or other reasons; and whether the payments may be consider fraudulent conveyances under state law.
In a statement in response to Mr Cuomo’s subpoena, AIG said,wholesale retractable car charger,retractable car charger “We are in ongoing contact with the attorney general and will respond appropriately to the subpoena.”
For the president, AIG’s announcement that it would award huge bonuses to the executives involved in the financial instruments that led to the bailout has become a critical test. If anger at the bonuses consumes the electorate, any additional funds the administration might need for its financial rescue could become impossible to extract from Congress.
Mr Obama, for weeks now, has been trying to project himself as a defender of Main Street, not Wall Street, even as he tries to explain why more funding for ailing big banks might be necessary.wholesale sbb key programmer,sbb key programmer Today was supposed to be devoted to a small business rescue rollout.
The small business package includes raising the federal guarantee on small business loans through the Small Business Administration to 90 per cent from the 50 per cent to 85 per cent traditionally covered. Messrs Obama and Geithner were also to announce that the Government is prepared to purchase up to $US15 billion in small business loans that are bundled into securities and sold on the open market.
SBA loan fees are also to be temporarily suspended.
The White House is saying small business owners are being crushed by a credit market that is drying up through no fault of their own. In essence, these businesses are the victims of companies like AIG, which used instruments like credit deferred swaps to insure speculation and risk.
But that message is being swamped by the furore over the AIG bonuses. Rather than tamp down that anger, Mr Obama has decided to show his sympathy.wholesale silca key,silca key
“All across the country, there are people who work hard and meet their responsibilities every day, without the benefit of government bailouts or multi-million dollar bonuses. And all they ask is that everyone, from Main Street to Wall Street to Washington,led flood lights, play by the same rules,” Mr Obama said.
-Chad Bray contributed to this article.
