Vicious Congress Slams AIG Angel to Hide Incompetence
AIG CEO Edward Liddy took on the ills of the insurance giant with a sense of public service not seen since titans of industry answered the same call during the great depression. His compensation for this task: $1 per year. None the less, the Congress needed a scapegoat to avoid scrutiny from passing a Stimulus Package that included a clause protecting those bonus payments paid by AIG that prompted the public outrage and these congressional hearings. While none of the congressmen grilling Liddy bothered to read the mammoth $787 billion stimulus bill before voting to pass it, they were more than happy to turn the public’s outrage over the $165 million in bonuses toward Liddy rather than having it reflect on their own incompetence and deception.
Representative Barney Frank actually asked for the names of those AIG executives who had received the bonuses calling for a public outing that would make these individuals and their families subject to public persecution. Liddy read some of the threats at the public hearing that included “All the executives and their families should be executed with piano wire around their necks. I’m looking for all the CEOs’ names, kids, where they live.” While Frank acknowledged the threats were despicable he insisted that taxpayers had the right to know.
If anyone could be more pompous than Barney Frank, it’s Representative Stephen Lynch who continued the attack against Liddy who had to remind the congressman he wasn’t yet present at AIG when the bonus contracts were created. He repeatedly used the term “you” while criticizing the AIG contracts then asked as if to shame Liddy “… do you have anything to say for your self?” Liddy stated he took offense to the congressman’s use of “you” referring to Liddy to which Lynch replied “offense was intended.”
Populist Furor
Progressives, as Democrats are again calling themselves hoping somehow to avoid the stigma of “liberal”, have ridden waves of populist furor for more than a century. Big banks, big railroads, big oil, Wall Street, and those who have crated the nations wealth in the first place, have been the target of their furor despite the fact that “big business” is a growing revenue source for the party that depends on unions, the legal community and public employees to get elected. In fact as the furor grew and questions about the bonus clause in the stimulus package grew it would come to light that it was the Senate Banking Committee Chairman, Christopher Dodd, who in fact was the one responsible for the last minute changes to the bill that protected the bonuses. Coincidentally, Dodd was the largest recipient of contributions from AIG in the last election cycle with Obama a close second.
These are the clowns who are constantly preaching the need for greater regulation of financial institutions and business by government entities. Yet it was Barnie Frank, now chairman of the House Financial Services Committee, who dismissed President Bush’s warnings back in April of 2001 that Fannie Mae and Freddie Mac presented a potential catastrophic financial disaster that could be triggered by a simple 4% decline in real estate values. And now, the collapse of the residential real estate market has precipitated the disaster of derivatives issued by AIG that exacerbated the credit crisis and the demise of an otherwise healthy insurance giant. We have seen what Senator Dodd is willing to do. In addition, he has received suspect residential loans at preferential rates from Countrywide Home Loans that have come under scrutiny. During the 1990s he authored legislation that tore down the walls for accounting firms that recognized a conflict of interest to act both as an auditor and financial consultant that brought about the bogus financials that went unrecognized at Enron destroying the retirement benefits of thousands of workers, the wealth of unsuspecting investors, along with Enron and the participating accounting firms as well.
The SEC has the tools and responsibility to regulate publicly traded securities. None the less, they failed to recognize the pending disaster at Enron. And as more facts come to light about the greatest fraud of all time it appears they failed to head repeated warnings about Bernie Madoff’s operations even though they reviewed his operations on several occasions. What they want for public companies they have fought at Fannie and Freddie, blocking efforts to apply the same regulations for these publicly traded entities they have for others even though these have been the conduit for excess bonuses like the $26 million paid to Obama campaign advisor Franklin Raines who was at the center of a $6.3 billion accounting scandal during his tenure. Even Rohm Emanual, Obama’s Chief of Staff received more than $300,000 for spending a year on the board.
If these clowns had used the tools at hand and let AIG go into receivership they could have let the bankruptcy courts break out the viable insurance operations form the speculative toxic assets, legally dismissed the bonuses or dicided they were in fact part of a valid compensation package. They, along with Treasury Secretary Tim Geitner handled it badly and are trying to pass the blame while furthering their desire to gain greater control over the private sector. This would only expand their sphere of political corruption and hinder the true growth engine of America which is Free Enterprise.