AIG planning to sue gov - Grrr!

[WantFit]

I can't believe my eyes when I read NY Times this article:

http://www.nytimes.com/2009/03/20/business/20aig.html

This is so disgusting. How dare they sue US govement (we - tax payers). If not for gov bailout money, they would go bankcrupt. In bankcrupt court, all those contracts will be under judge review. I am sure for all creditors, employee bonus would be the last important one. Geez, what the heck is going on? I think their moral was eaten by snake. For all these mess they created, they wanted us to honor their bonus?

I don't even support the tax to get the bonus back. Many of those guys were out of US. We don't even have tax jurisdiction on it.

 

[LauraMax]

I heard about this. It's sick. First they took tax money w/the bailout, now they're gonna waste it on lord knows how many days in court, lawyers for them, lawyers for the government, judges & court staff..........it's infuriating!

I'm not sure how this is gonna come out legally. AIG had contracts w/employees to give these bonuses. But they also had a legal obligation to the US govmt & taxpayers to put that money back into the economy, not into their execs pockets. Two separate contracts. I have no idea how any judge will be able to decide this case objectively.

I hope whatever judges hear these cases don't waste more than 5 minutes--& that 5 minutes should be the time it takes for the bailiffs to toss their a$$es out of the courthouse.

 

[ImFiddY]

What upsets me is our congress trying to pass laws to tax the bonus money and they know or should know that they cannot do so because it violates the constitution. I'm afraid that we have gone to 'mob rule' where we are throwing out the laws and just doing what we want. Even if we disagree with the bonuses, the employees should not be receiving death threats. And the 'mob' wants these employees name be made public, which if done will endanger these peoples lives.

Yes, this is screwed up. But we have contract laws and we have the constitution to abide by. The real problem is the gov. giving the money with NO accountability in the first place.

 

[WantFit]

Agree! We don't want government act from one extrem to the other. But two points: government should keep close eyes on those billions of dollars and make sure it should satisfy stimulate the economy first before meeting bonus contract. Second, I really hope those exec, employees of AIG should act as American citizen. Show some decent, moral. I am glad that one of exec return the bonus with $6.3 million. But I still shake my head with those numbers.

I thought Mr. Libby was assigned the job by gov to clean up and revive the company. But it looked like I was wrong... However, he, as a CEO, should not let his legal department going out suing government, wasting more money like LauraMax said.

 

[LauraMax]

Well, Congress threatened this if they refused to give back the bonuses, which of course they did.

Parker, I'm curious, why do you think this is unconstitutional? As far as I know there's nothing in the constitution about taxes of any kind.

WF, those bonus recipients seem to forget, or more likely don't care, that this is their tax money too.

 

[melimcn]

You know, after all of this, I'm starting to look at it this way....
They're going to go away anyhow. They'll all get their come-uppance. Unfortuantely, it will have a massive ripple through the country with the people infected by them (yes, I meant to say infected...).

At this point, they're not getting another dime from us going foward, I think that that's commonly agreed upon. And since they clearly can't get their priorities away from their own selfish pocketbooks, they're going to go under even with all of the help we've been FORCED to provide.

So either way, this problem will resolve itself. It's just going to take time.

If anyone remembers, Allstate went into bankruptcy under Liddy's brilliant leadership, so AIG is just one broken ladder rung from hitting bottom anyway.

 

[ImFiddY]

Parker, I'm curious, why do you think this is unconstitutional? As far as I know there's nothing in the constitution about taxes of any kind.

Do a search on AIG and Bill of Attainder

 

[hiitdogs]

Do a search on AIG and Bill of Attainder

It is not clear that it is in fact unconstitutional. To be unconstitutional it would have to be an act of legislature declaring a person or group guilty of a crime and punish them without trial.

Many constitutional scholars state that if they tax any bonuses that are given to any institution that has taken bailout money it is not targeting a specific group and punish them.

If this is unconstitutional why would it then be constitutional that any of us have to pay taxes? I felt like I was punished in the last few years having to pay taxes

I don't see the problem, these companies have taken from the tax payer and paid millions in bonuses to the people who screwed us in the first place. So it is not a punishment, they shouldn't have gotten the bonuses in the first place. It's just righting a wrong.

Bonuses are cancelled left and right, people have to take paycuts, etc. Why not AIG? Because they want to "retain" those fools who created the mess? As if there weren't enough good people they could hire and instead they need to throw millions at those geniuses - uggghh!!

 

[lala1]

First of all, I agree that using my hard earned money for these bonuses is a slap in the face, however, Congress is to blame. They wrote specifically in the bill that any contracted bonuses before certain dates should/could be honored. They were well aware of the fact that these bonuses were written in the contracts and the dates. Now to face us and say that AIG is the bad guy is so hypocritical...ask Chris Dodd or Geithner

http://www.chicagotribune.com/news/nationworld/chi-dodd_18mar19,0,1351121.story

http://www.usnews.com/usnews/politics/bulletin/bulletin_090320.htm

 

[TammySG]

You know, after all of this, I'm starting to look at it this way....
They're going to go away anyhow. They'll all get their come-uppance. Unfortuantely, it will have a massive ripple through the country with the people infected by them (yes, I meant to say infected...).

At this point, they're not getting another dime from us going foward, I think that that's commonly agreed upon. And since they clearly can't get their priorities away from their own selfish pocketbooks, they're going to go under even with all of the help we've been FORCED to provide.

So either way, this problem will resolve itself. It's just going to take time.

If anyone remembers, Allstate went into bankruptcy under Liddy's brilliant leadership, so AIG is just one broken ladder rung from hitting bottom anyway.

I'm a longtime lurker and always find the subjects interesting. I've learned to stay away from the heated ones. I find that it's just not worth it. I did find this thread interesting but wanted to correct your statement that Allstate went into bancrupty under Mr Liddy. That is just untrue. I have many family members that work for Allstate, many for over 20 years. They have never went into bancruptcy and actually under Mr Liddy's leadership made significant financial gains. Don't know the man personally but know many that do and I think some of the accusations are unwarranted. I think his greatest error was stepping into this mess naively thinking he could fix it.

 

[hiitdogs]

Now to face us and say that AIG is the bad guy is so hypocritical...ask Chris Dodd or Geithner

http://www.chicagotribune.com/news/nationworld/chi-dodd_18mar19,0,1351121.story

http://www.usnews.com/usnews/politics/bulletin/bulletin_090320.htm

Are you saying that AIG is doing the right and moral thing? They are pretty bad in my book. What I see is entitlement mentality and incredible greed. Aside from the fact that AIG was originally bailed out by the Bush administration and Secretary Paulson, not withstanding that congress screwed up by trying to get the bill passed in a bipartisan fashion.

It is not Geithner who got us into this whole mess. He's been in office for less than 2 months. It took several years to drive the bus into the ditch in and any expectation that we can get out of this mess is pretty unrealistic.

 

[lala1]

No, I'm not saying that AIG is doing the right or moral thing. I am saying that Congress is worse by feigning innocence and then throwing all the blame on AIG. Nor am I talking about the initial bailout (which was a mistake IMHO). I am talking about the money given to them by this administration which knowingly allowed payouts of bonuses using this money. I also never mentioned any expectation of "getting out of this mess", although it would have been more realistic had the government not intervened.

 

[hiitdogs]

I also never mentioned any expectation of "getting out of this mess", although it would have been more realistic had the government not intervened.

Really? And how would that have worked?

If money is frozen and the financial system collapsed, the whole economy would have collapsed and most of us wouldn't have a job anymore. Remember the Great Depression where the government also didn't want to "intervene" and advocated a "hands off policy". Quite successful that turned out - not!!

 

[Govtgirl]

First of all, I agree that using my hard earned money for these bonuses is a slap in the face, however, Congress is to blame. They wrote specifically in the bill that any contracted bonuses before certain dates should/could be honored. They were well aware of the fact that these bonuses were written in the contracts and the dates. Now to face us and say that AIG is the bad guy is so hypocritical...ask Chris Dodd or Geithner

http://www.chicagotribune.com/news/nationworld/chi-dodd_18mar19,0,1351121.story

http://www.usnews.com/usnews/politics/bulletin/bulletin_090320.htm

Dead-on right. I'm not defending AIG by any means. But for Obama to act shocked, shocked! that the bonuses were going to be paid is pure baloney. And they can't haul off and tax them more to get it back. That's illegal, and what if the gov't decided to do that to YOU? "Hmmmm, we thought you paid enough taxes, but we were wrong and now we want more.?

And Charles Krauthammer can say the rest better than me:

"...And there is such a thing as law. The way to break a contract legally is Chapter 11. Short of that, a contract is a contract. The AIG bonuses were agreed to before the government takeover and are perfectly legal. Is the rule now that when public anger is kindled, Congress will summarily cancel contracts?

Even worse are the clever schemes being cooked up in Congress to retrieve the money by means of some retroactive confiscatory tax. The common law is pretty clear about the impermissibility of ex post facto legislation and bills of attainder. They also happen to be specifically prohibited by the Constitution...."

http://www.washingtonpost.com/wp-dyn/content/article/2009/03/19/AR2009031903041.html

 

[morningstar]

We should not be surprised. AIG is an insurance company. Insurance companies operate for the sole reason of making as much money as humanly possible, leveraging every opportunity and taking every advantage they can. They have no compunction about screwing over a single person or family and denying them reimbursements, why would they not screw over an entire country of people? Insurance companies are not about honour, fairness, reasonableness or patriotism. They want to make money and they don't care how they do it. Period.

 

[LaughingWater]

And Charles Krauthammer can say the rest better than me:

I like Charles. Such a smart guy.

 

[LauraMax]

Do a search on AIG and Bill of Attainder

Jeez, I'm a little disappointed you couldn't describe it to me yourself.

I did do the search, which referenced the article (article 1, section 9). Which simply states "no Bill of Attainder or ex post facto Law shall be passed." Then I searched for "Bill of Attainder:" "an act of the legislature declaring a person or group of persons guilty of some crime and punishing them without benefit of a trial."

So it ain't gonna work. An excise tax is not the same thing as essentially convictiing someone of a crime. An excise tax is is "a type of tax charged on goods produced within the country."

I don't know what goods AIG produced, but it seems to me the "unconstitutional" argument should be laughed out of court.

 

[hiitdogs]

And Charles Krauthammer can say the rest better than me:

"...And there is such a thing as law. The way to break a contract legally is Chapter 11. Short of that, a contract is a contract. The AIG bonuses were agreed to before the government takeover and are perfectly legal. Is the rule now that when public anger is kindled, Congress will summarily cancel contracts?

Even worse are the clever schemes being cooked up in Congress to retrieve the money by means of some retroactive confiscatory tax. The common law is pretty clear about the impermissibility of ex post facto legislation and bills of attainder. They also happen to be specifically prohibited by the Constitution...."

http://www.washingtonpost.com/wp-dyn/content/article/2009/03/19/AR2009031903041.html

Really? A contract is a contract?? Sorry, I just got a good chuckle out of that!

All over the country companies are breaking their contracts, people are taking paycuts, have their bonuses cancelled, benefits reduced, are forced to take furloughs and unpaid times off, etc. and AIG can take our money but can't restructure those bonuses? Umh, yeah right!!

Where in the Constitution is it specifically prohibited? We are not talking about criminal retroactive legislation, they are talking about taxes. They are levying the tax in the same year, taxes can be increased and decreased retroactively, it is perfectly legal and it has been done many times before.

 

[LaughingWater]

I think the question is:

Is Congress singling out AIG in a punitive manner?

Or is this simply a legal way to fix a mistake Congress made in haste?

 

[hiitdogs]

I think the question is:

Is Congress singling out AIG in a punitive manner?

Or is this simply a legal way to fix a mistake Congress made in haste?

No, they are not singling out AIG, it is written so it covers any company that takes TARP money.

I think it is very clear that they made a mistake but I am not sure why everyone hangs themselves and cries "oh my gosh, they made a mistake". Whenever people are working there will be mistakes. I don't know about you guys but in my job I have made mistakes or things that looking at it in retrospect I should have handled differently, or flat out missed something. I am not perfect and I don't expect everyone else to be perfect, people make mistakes. You just gather yourself and try to find a solution that mitigates the problem.

I guess that's what they are trying to do, find a solution that mitigates the problem / the mistake they made. I rather have that than them sitting back and throwing their hands up in the air. But I also realize that there will always be some nay sayers who for the purpose of political gain rather focus on the mistake than on moving forward.