Dodd: Administration pushed for language protecting bonuses

Discussion in 'Politics, Religion, Social Issues' started by MacNut, Mar 18, 2009.

  1. MacNut macrumors Core

    MacNut

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    #1
    So while everyone is screaming at AIG it was congress and the president that wanted the bonuses to stay?
     
  2. CalBoy macrumors 604

    CalBoy

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    #2
    Technically it wasn't even Congress. The Treasury Department wanted that clause put in because they knew that the AIG employees were under contract, and that changing the terms of those contracts without going through Chapter 11 would cost them a lot more.

    I think the solution now is going to be a specialized tax on those bonuses (which is legal).
     
  3. leekohler macrumors G5

    leekohler

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    #3
    What should have happened was the bonuses shouls have been done away with as a condition of receipt of tax money. Sorry- this is messed up, and it never should have happened.
     
  4. CalBoy macrumors 604

    CalBoy

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    #4
    The first two bailouts were financed by the Federal Reserve, so that really wasn't under the purview of the elected branches of government.

    The third bailout in November of 2008 could have potentially done that, but the legal standing for it would have been a bit hairy since the government purchased stock, it didn't really "give" money like it has to banks.
     
  5. MacNut thread starter macrumors Core

    MacNut

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    #5
    But how can congress and the president say that they don't know how this happened and it will never happen again, yet they were the ones that made it happen.
     
  6. CalBoy macrumors 604

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    #6
    They didn't sign the contracts that gave these bonuses; that happened long ago and is really out of anyone's hands now.

    What they did was prevent a bad situation from getting worse (lawsuits over the contracts would have been much more expensive), but they have to take the stance they did because it's politically unpopular.
     
  7. MacNut thread starter macrumors Core

    MacNut

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    #7
    They could have written laws that said if you get bailout money the bonuses become null and void. Congress can't play dumb, they knew this was in the bill. Maybe if they read it they would of known it was in there.

    They can't say bad AIG how dare you do something that we permitted you to do.

    Congress and the treasury should just admit they knew about this.
     
  8. leekohler macrumors G5

    leekohler

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    #8
    Politically unpopular? My god Calboy! We kept this company from going under with our money! They should be damn glad we did that. Any contract for bonuses should have been declared null and void. And how the hell is it a bonus if it's not optional? Bonuses are suppose to be based on merit and performance, not guaranteed.
     
  9. CalBoy macrumors 604

    CalBoy

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    #9
    Of course that would work if there was legislation for the AIG bailout; there wasn't.

    The third bailout for AIG did come under TARP, but like you said, there was no clause for bonuses. Somehow I doubt the outrage would have been less severe though, even if there had been no third bailout.
     
  10. CalBoy macrumors 604

    CalBoy

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    #10
    I don't disagree with how bonuses should be awarded, or with the general sentiment of outrage, but you have a no-win situation here.

    There was no way the Treasury Department was going to win this contract fight after the fact, so they played their hand as best they could. What more could you ask of them?
     
  11. MacNut thread starter macrumors Core

    MacNut

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    #11
    They should fess up an admit it, not pass the blame and play dumb like they didn't know about it.
     
  12. CalBoy macrumors 604

    CalBoy

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    #12
    Who should fess up?

    Dodd was pressured by the Treasury Department to put it in.

    Obama and his cabinet were not in power when TARP was written/signed.

    How many more actors are there to blame?
     
  13. MacNut thread starter macrumors Core

    MacNut

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    #13
    First Dodd lied and said he had no idea how it got in there, then he fesses up. Congress was grilling the CEO of AIG when it is Congress that should be asking themselves why they wrote the bill to allow it.
     
  14. CalBoy macrumors 604

    CalBoy

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    #14
    So he already has fessed up then. The voters will punish him if they want the next time he's up for reelection.
    However, a certain level of modesty and good grace should be expected when you've bailed someone out. What AIG execs are doing by accepting the bonuses is signaling that they don't care what the world thinks of them, because they've walked off with millions. That kind of blatant disregard for humility deserves grilling.
     
  15. MacNut thread starter macrumors Core

    MacNut

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    #15
    Dodd's approval rating is already dropping in CT.
     
  16. CalBoy macrumors 604

    CalBoy

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    #16
    Then things are as they should be.

    Now he probably won't lose an election over this, but the public has clearly responded. He (and other members of Congress) know to keep this in mind the next time a Treasury Department official pressures them.
     
  17. Sun Baked macrumors G5

    Sun Baked

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    #17
    Oh well, seems the lawyers don't seem to like the direction, and point out that really isn't much they can do except make it uncomfortable enough for people to give them back voluntarily.

    Anything else including using the special taxing powers would just end up with a lawsuit that'll likely cost more than the bonuses.

    I could have seen all the employees resigning their employment contracts sans bonuses the day after they got the bailout money, or simply cashing out and walking.

    Sort of sucks when your boss says here's a bonus, and comes back weeks later and says oops. Even worse when your own federal representatives in Washington start a media campaign against your mangy ass for taking it and not giving it back.
     
  18. MacNut thread starter macrumors Core

    MacNut

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    #18
    Dodd has done a few things over the past year that might hurt him in a reelection.
     
  19. jonbravo77 macrumors 6502a

    jonbravo77

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    #19
    I think what is really being missed here is contractual law... Unless you know how contracts work and the legalities behind a contract there's not a lot of blame that can be handed out.

    There has to be a point where enough is enough and that it comes down to there are contracts that were in place before the Obama Administration came in. Now we can sit here and point fingers all day long at Obama and the treasury department and whoever else you want to blame but it boils down to contractual law... If the government had placed language in the bailout that prohibited the bonuses those people who were affected could have sued the government for breach of contract. I know it sucks and sounds like crap and I hope and prey that most if not all of these people have some sort of conscious and give the money back but it comes down to contractual law.

    The Treasury department and congress are looking into what they can legally do to get back this money back...
     
  20. NT1440 macrumors G4

    NT1440

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    #20
    Potentially, but from what Ive seen anyway people around here either like him, or just vote to keep him in because they dont feel its worth deliberating over. Thats just this area of CT tho, i realize its different all over.
     
  21. MacNut thread starter macrumors Core

    MacNut

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    #21
    The company got a bailout because they were going under, I would think that voids all the contracts when the government gets involved.

    The latest poll shows Dodd behind a point if the election were today.
     
  22. NT1440 macrumors G4

    NT1440

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    #22
    You can think that all you want, but thats not how the law works. The government isn't above the law and contracts, to which I say THANK GOD.
     
  23. MacNut thread starter macrumors Core

    MacNut

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    #23
    So why the hell did we bail them out if all the money went to bonuses.
     
  24. jonbravo77 macrumors 6502a

    jonbravo77

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    #24
    Well, you would think, but unfortunately not much voids a contract. Unless one of the parties involved breaches the contract. It is still a legally binding document. I don't back the anyone in this. It's all crap, but it's a huge legalities issue and I think (my opinion) this way was the lesser of two evils. The administration could have A) made the language say that the contracts are void and possibly face a massive amount of lawsuits for breach of contract or B) kept it the way it is right now and find some legal avenue to get the money back...

    Not really a win win either way you look at it...
     
  25. NT1440 macrumors G4

    NT1440

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    #25
    $165 million when to bonuses, AIG was given BILLIONS. No its not right AT ALL that they handed out that much, but we have to stick with the facts here.

    Please don't sensationalize, it ruins good discussion.
     

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