AIG Misses Their 4:00 PM DeadlineAs promised, New York Attorney General Andrew Cuomo has issued subpoenas requesting the names of those members of AIG’s Financial Products division who will be receiving bonuses.

“We had given AGI up to 4 o’clock today to provide the information on the latest round of bonuses that they paid out,” Cuomo told reporters. “Four o’clock has come and gone.”

[Bizjournals] (Thanks, Tim!)

Comments

Edit Your Comment

  1. Nate425 says:

    I wish all AG’s were like this guy.

    • Papa Midnight says:

      @Nate425:
      Andrew Cuomo is not Harvey Dent.

      This guy has his own share of dirty laundry and has something of a scorched earth policy. For example, last year with ISPs, this is the same guy who forced Verizon and Comcast to kill 95% of their used net access (The entire alt. network is inaccessible) in order to prevent people from seeing underage pornography which was probably only available on less than 1% of the entire network.

      By the way, it is an election year.

      Nothing against him personally, as I do not live in New York, but the fact remains that some of his policies did not make many people very happy…

      This one being the apparent exception of course. Full Steam Ahead on this one. Since we collectively own (damn I love emphasizing that) 80% of the controlling stock in AIG, we should be able to compel them to do similar actions.

      • Trai_Dep says:

        @Papa Midnight: Hmm. Weighing free porn and warez* versus combatting these types of shenanigans. Perspective, perhaps? Is tentacle porn really that much more important than the global financial meltdown? Do you really think these guys should get a pass and a slap on the back for a job well done?

        The only thing more absurd is the people that think that a pol’s sex life is more important than his policy stance.

        * Which of course, you can STILL download, only you have to pony up a sub to someone providing unlimited Usenet access. Cheap bast*rd. :D

        • Papa Midnight says:

          @Trai_Dep: LoL. Good humor in that one. Obviously usenet is more useful for things than just porn and warez. Do I need to play the BetaMax card here? :P

          The only thing more absurd is the people that think that a pol’s sex life is more important than his policy stance.

          Welcome to America… Where your President can have a C Average, Smoke Weed, go AWOL during active duty, drive the country into the deepest of the crimson red pool, and implement torture policies. But Michael Phelps smokes a bong and “OMFG, He Did What?!”.

  2. Sam Oldenburg says:

    AIG Execs need to burn for what they have done to this country.

    • Pylon83 says:

      @Sam Oldenburg:
      AIG is not the one and only source of the meltdown. The spark that set this big fire was moronic consumers buying houses they knew that they couldn’t afford.

      • xsmasher says:

        @Pylon83: “AIG is not the one and only source of the meltdown.” No. The source were banks that fell over themselves to make bad loans, and sell them up the ladder before they exploded. The banks bankrupt themselves. Or were “moronic consumers” breaking in and giving themselves loans?

        • Pylon83 says:

          @xsmasher:
          Consumers were taking loans they knew they could not afford to payback. The banks carry some fault for not being stringent enough, but I believe the ultimate blame falls on the borrowers who took more than they should have and didn’t pay it back. I don’t buy “But the bank gave it to me, so it was OK” as an excuse for peoples failure to take responsible action.

          • floraposte says:

            @Pylon83: People are always taking loans they can’t pay back. It only sinks the economy when those exact loans become the cornerstone of investment products.

            • Pylon83 says:

              @floraposte:
              While I don’t necessarily disagree with you, I don’t think that’s an excuse for consumers to shift the blame to the big bad banks. Too many people jumped on the “I absolutely have to own a home, and a small, sensible one is just silly. Give me the biggest McMansion I can’t afford, using an ARM or an interest-only loan. I don’t really understand what any of that means, but I want a house” bandwagon. When those ARMs reset, it was all of a sudden “The bank screwed me, now I can’t payback this mortgage. This is in no way my fault, down with the banks, down with AIG, down with the wealthy!”

          • narq says:

            @Pylon83: It’s rather easy to just blame the victim isn’t it? You must not have many facts because the way I see it, banks were doing things 100 times more irresponsible and devious than the mortgage holders. We’re not talking a Nigerian scam here. These people were told they could afford it, they were duped into believing it and rather well. The banks, hedge fund managers, stock traders, and the rest of those people are to blame. Greed was not at the fault of the typical American. It’s cruel and stupid to blame a sub-prime mortgage holder.

            Everyone wants to live the American dream and own a house, car, and have a family. That’s all they can be blamed for. If you make minimum wage and someone tells you “here’s a bunch of money, only catch is you have high interest but you can have everything you dream of” do you turn that down?

            Not everyone wants to steal your money, then burn half of it and keep the rest while watching you lose everything you own. That’s what these guys did. The guys like AIG are pure evil and greed. They are solely to blame. Not just AIG but all of them and not the victims. The unfortunate thing is, they did this not only with the people who can’t afford it but the people who are very well off. Don’t know if you’ve noticed but even people with plenty of money lost a lot because of these banks.

            People have the right to be irresponsible. Banks don’t.

            • Pylon83 says:

              @narq:
              Are you kidding me? People have a RIGHT to be irresponsible? I also don’t buy your argument that it’s the banks fault and people should just be fat, dumb and happy that the bank was handing them money they knew they couldn’t pay back. The bank shouldn’t be telling you what you can afford, you should KNOW what you can afford. There is no excuse for not knowing that you can’t afford a $300k house on $30k/year. The mortgage holders got greedy and wanted more house than they could afford, largely because people have been told and told that owning your own home is necessary to success. Not everyone deserves to own their own home, and many people have no business owning a home. Unfortunately, a lot of those people got mortgages, probably thinking at the time “Boy, I’m pulling the wool over this bankers eyes, I can’t afford this”. The banks have some fault here, but the ultimate cause of this meltdown is greedy, irresponsible home buyers who took exotic mortgages that they couldn’t afford, then defaulted. Wanting to live “The American Dream” is a piss-poor excuse for irresponsibility.

        • howie_in_az says:

          @xsmasher: Everyone failed, from the consumers who took out loans with adjustable rates under the mistaken assumption that they could simply refinance later to the banks that issued the loans knowing the customer had little/no chance of actually paying it back. Government failed due to lack of regulation in the default swap market. The Fed failed due to cheap, easy credit. Wall Street failed by using default swaps as betting tools, not to mention the incestuous purchasing of mortgages repackaged as special investment vehicles.

          Greed got the better part of everyone, and now we’re all responsible — even if we were responsible before, now we have to be responsible for the irresponsible. 20 years from now the cycle will repeat itself and we’ll be left wondering why it happened again when we should have learned from the mid-1980s and now.

      • Fineous K. Douchenstein says:

        @Pylon83: You couldn’t be more out of touch with that statement. These people who you are calling “moronic consumers” were promised by the lenders that their houses would appreciate in value, which would allow them to refinance at a level rate.

        The reason we are in this mess is because mortgages were being sold as investments at a rate that the mortgages themselves couldn’t keep up with. There was such a huge and heavy market for these investments that the banks were pressured to create more loans to fill the demand for the investments. What happens once you’ve given all the responsible people loans? That’s right, you have to lend to the less responsible people.

        • Pylon83 says:

          @wagenejm:
          A promise from a lender that your home will increase in value should be taken with the same amount of skepticism as a weather forecast; it’s might be right, but you shouldn’t rely on it.
          And really, it doesn’t matter what the lenders told them. When they were presented with paperwork to buy a house they knew the couldn’t afford, with payments that they knew were going to increase in the future to a level beyond their means to pay, it was the consumers fault for signing those papers.

  3. Pious_Augustus says:

    You should of seen their last AG he was a Crusader against everything and everyone especially Wall Street and those hookers, sadly he got caught with one and that meant the first black gov of New York

  4. floraposte says:

    Now I know what I want for my next birthday: subpoena power.

  5. RedSonSuperDave says:

    I didn’t get a subpoena at all. Now I’ve got a bad case of subpoenas envy.

  6. philmin says:

    From what I’ve ready, AIG knows that there is no real legal recourse against them, that’s probably why they didn’t give up the names.

    Is this just grandstanding by the government to show the people they are mad? I’m not sure what is supposed to come of a law suit.

    • xsmasher says:

      @philmin: Shareholders of AIG could sue the company for looting it like a korean grocery. I suggest that the New York state pension fund should buy 1 share, and then set their lawyers to “kill” mode.

  7. SonicMan says:

    Actually NY does have laws about this. If the company knew it was going under and paid out the bonus anyway, it could be fraud under NY law.

    • Pylon83 says:

      @SonicMan:
      The actual law your talking about applies if the company makes payments before going into Bankruptcy. It’s called a fraudulent conveyance. It’s certainly not an open and shut case for the AG, since AIG didn’t actually file for bankruptcy. They also have to prove that the company knew they were going downhill, and that the company didn’t get reasonably equivalent value for the payment. Not that it’s by any means impossible for the AG to prevail, but it’s certainly not a slam dunk. It’s all about what they can prove.

  8. TheMonkII says:

    It sounds so very much like when Chamberlain told Britain that they were at war with Germany.

    “Germany was given until 12 o’clock today to remove their troops from Poland, I must inform you, no such action has been taken and subsequently, this country is at war”

    LOL, now, lets hang them up and have a good ol killin’

  9. Bahnburner says:

    These bonuses were agreed to and protected by a provision Chris Dodd WROTE INTO THE BAILOUT! TAKE YOUR OUTRAGE TO THE GOVERNMENT WHERE IT BELONGS!

  10. LegoMan322 says:

    Still having issues responding to other Consumerist members………..This should be considered fraud anywhere. And I do not understand why this has gone this way. Stop giving them money and let them fail and go into bankruptcy. If they come out of it so be it….but why are we holding their hands while they are pissing on us?

  11. idip says:

    AIG are being a bunch of greedy bastards. They should revoke the bonuses. If the company cannot, fine, the government should do something to recoup the monies. If that means taxing the company, fine, do it.

    ALSO, if the company does not revoke the bonuses we should NO LONGER PROVIDE THEM WITH BAILOUT MONEY.

    Let the company collapse. It’s not like it’s doing well anyway. Yea things will get bad but at least we won’t be throwing money down the toilet.

  12. tgrwillki says:

    Ironically, Pandora just started playing “If I had a million dollars” while I read this.

  13. 1stMarDiv says:

    In response to philmin (am I the only one having trouble with the comment button? It hasn’t worked for me in weeks), it kind of reminds me of the past couple of summers when oil was at its peak. The government would then say they’d probe the oil companies to find out if they’re inflating the prices(you think?). Of course nothing ever came out of it – the prices remained sky high and griping amongst the people continued unabated. I think they just do it to feign interest and act like it bothers them, because it never did a damn thing.

  14. MrsLopsided says:

    No more taxpayer money for AIG. Let the chips fall where they may.

  15. oneliketadow says:

    Does AIG sell subpoena insurance?

  16. kreatre2009 says:

    I’m curious… What law did AIG break? The bailout money came with NO STRINGS ATTACHED. I’m not happy that they did this either, but one thing that isn’t being mentioned by the “news” media is that AIG is under contract to pay these bonuses whether they want to or not. Another thing worth mentioning is that the government has no right whatsoever to hound a PRIVATE company over paying bonuses. This was very bad PR for AIG, but they did not break any laws. All of this mock outrage over this crap needs to stop. I’m more outraged by the mortgage bailout. People who have been paying their mortgages are getting screwed while people who cheated on their mortgage paperwork are getting a handout from government to keep the homes that they should not have been able to purchase in the first place. Thank you, Obama!

    • ZekeSulastin says:

      @kreatre2009: You expect people to pay attention to little things like contracts and reality here when they can instead be EPIC RAGEing against the ebil corporations?

      Yeah, they screwed up bad by not ensuring there was an escape clause, but when you have politicians calling for suicide and people replying that we should have the execs STONED you know your little piss-fit has gone way too far.

      • Pylon83 says:

        @kreatre2009:
        I agree whole-heartedly. AIG has a contractual obligation to pay the bonuses, they should pay them. If they told Exec. A that if he started on X date, and was still there on Y date, that he’d get $Z bonus, come Y date, he’s most certainly entitled to that bonus regardless of how bad the company is doing.

        Further, the “outrage” has gotten ridiculously over-dramatic. It’s amazing how people can get so worked up because someone that isn’t them is making a lot of money. It could cost AIG a lot more if they don’t pay the bonuses. Under CT law, if an employer refuses to pay a wage in bad faith, the employee is entitled to receive 2x that amount owed, plus attorney’s fees. Knowingly refusing to fulfill a contractual obligation is probably bad faith. So if AIG does what Barry O. and everyone else on Capitol Hill is telling them to, it could cost $320mil instead of $160.

        • jc364 says:

          @Pylon83: I don’t care that someone made money. I do care that greedy irresponsible people are now being rewarded with money taken from American taxpayers.

          • Pylon83 says:

            @jc364:
            Greedy and irresponsible home owners are also being rewarded with taxpayer money in the form of mortgage assistance, etc.

    • rubyist says:

      @kreatre2009: AIG isn’t a private company – it’s a publicly traded company with shareholders, of which I believe the US government to now be the largest.

  17. coren says:

    So did the AG call them AGI, or is the source article just misquoting him? You’d think their editor would catch that…

  18. MrsLopsided says:

    kreatre2009: Thank you, Obama!

    The AIG bailout started under Bush’s watch. All gov’t is the same.

    Ask a dentist to cure an emergency room patient and he’ll recommend capping the teeth. Ask gov’t to fix a problem and they’ll recommend spending money.

  19. metaled says:

    I am sure AIG had a lot of outstanding debts that were WAY overdue before they decided on the bonuses, with no money to cover them.. They handed out the money to their employees and said screw their debts, not caring if they were ever covered. The bonus should have at least gone to the end of the list (not that they should have been paid.) some money laundering or racketeering laws should cover this.
    Bonuses should only be paid out of company profit, not out of bailout money. Everyone says the bonuses were a contract between AIG and the employees and that it HAD to be paid. I got news for all you, the federal government own 80% of AIG. The government does not have those contracts, so the governments money should not have been used for them. AIG funneled that money to those people (if in fact it really did, sounds fishy to me). The government cn say what the money is to be used for, NOT AIG. So they do have to answer for that. Also, maybe the FEDS can’t do anything, but NEW YORK has different laws and can go after them on state an local laws if they want.

    • Pylon83 says:

      @metaled:
      The problem is the government DIDN’T attach any strings to the money it gave to AIG, so they don’t get any say on how it is used. For them to attach strings/conditions later is simply unconscionable.
      While the govt does own 80% of AIGs stock, that doesn’t mean they get to directly make corporate decisions. They are a mere shareholder. They can elect/remove board members and approve fundamental transactions. The day to day power of running AIG still rests with the board of directors, not the US govt. If they don’t like the way AIG is running things, the proper thing to do is to simply replace the board with Directors that are better aligned with the governments interests.

  20. cvpsmith says:

    How is it that AIG is both legally bound to pay out these bonuses, yet they do not have the money to do so without a government bailout? Shouldn’t these bonuses be based on the amount of money that has been brought in? I’m no business exec or anything; I’m just basing this on good ole fashioned common sense. It seems to me that some “creative accounting” is at work here. I think it’s time for the gubment to break open the books and see what’s up. In fact, I think that an accounting review should be a prerequisite for any sort of bailout!

  21. MrsLopsided says:

    @Pylon83

    If over-extended homeowners were the only problem it would be a manageable problem. But the problem is that AIG & investment banks leveraged these “assets”, bundled the bundles, sold derivatives on derivatives, & sold insurance on these derivatives.

    Most investment banks were leveraged by a ratio of 30 to 1. Suddenly a single $300,000 defaulted mortgage becomes a $10 million dollar problem.

  22. Pylon83 says:

    @MrsLopsided:

    I have never said that the banks and insurance companies like AIG don’t have any blame. What bothers me is most people leave out the fact that the over-extended homeowners are the root of this entire problem. They started the fire, the actions of the banks and AIG simply added fuel to it. The fact is, had the homebuyers been more responsible, they wouldn’t have defaulted, the Mortgage back securities wouldn’t have become bad assets, the credit-default swaps wouldn’t have come due and we wouldn’t be in this crisis. There is plenty of blame to go around, but it really infuriates me when many people conveniently leave the greedy homebuyers out of the mix.

    • SonicPhoenix says:

      @Pylon83: I think you have it backwards. The homebuyers were stupid and/or ignorant; the financial companies were greedy.

      • Pylon83 says:

        @SonicPhoenix:
        The home buyers were greedy in the fact that they wanted more than they could afford, and proceeded to get it by taking mortgages they knew they couldn’t afford to pay back. Greedy, stupid and ignorant.

  23. richcreamerybutter says:

    @Pylon83

    What bothers me is most people leave out the fact that the over-extended homeowners are the root of this entire problem.

    You’re confusing “irresponsible” with “misinformed.” If an electrician decides to buy a home and if a so-called professional mortgage broker/banker says, “you can afford this,” why shouldn’t he or she believe them? It’s one thing for the broker to say, “you cannot afford this, and are therefore unqualified for a loan,” but if loans are handed out carelessly it’s not the homeowners’ fault.

    You wouldn’t expect a mortgage broker to have the skills to perform a licensed wiring job, so why do you expect one who is not paid to play with money to know the intricacies involved with mortgages?

    • Pylon83 says:

      @richcreamerybutter:
      Being able to “Afford” something and being able to qualify for a loan are not necessarily the same thing. The electrician should be able to say “Well, I make $10 per month. I have $3 per month in bills and expenses and a $1 per month car payment. I like to spend $2 per month on entertainment and save $1 per month. I can afford a $3 per month mortgage payment. When the mortgage broker says “You can afford a $5 per month mortgage payment”, the electrician should know better. Or when the broker says “Your payment for the first 3 years will be $2, less than you can afford, but after 3 years will go up to $6, but you’ll just figure it all out in 3 years”, that should set off alarms in any rational person. Many of these borrows were simply greedy and irrational. They wanted to believe what the broker was telling them they could afford over what they knew they could afford. Their greed and irresponsibly caused them to enter into mortgages against (what should have been) their better judgment.

  24. SonicMan says:

    Ha, I like what the house is doing about this now. Looks like they may craft a new tax law. Stating that companies that take Fed bailout money and payout bonuses over 100k will have the bonuses taxed at 100%. Nice.

  25. worrytron says:

    Ummm 4pm in what time zone?

  26. rellog321 says:

    So just like credt card companies, we the people reserve the right to change the rules after the fact. If it’s legal for a credit card company to lower your limit and cause you them to be over your limit, then as the creditor for AIG, we can change the rules as well….

  27. richcreamerybutter says:

    Many of these borrows were simply greedy and irrational.

    No, they simply didn’t know any better. If your trusted real estate, mortgage brokers, and bank all confirm that you “can” afford it (along with a lot of pressure to sign), then the buyer will think otherwise.

    Really, most of the responsibility lies on those who should know better, the ones who were trained in money. That’s why you enlist their services.

  28. EBounding says:

    It’s stunning all this rage towards AIG when the government gave them the bailout to do just this in the first place (ie continue business as usual).

    Try applying just half of this rage towards the federal government and maybe things will actually change.

  29. lakecountrydave says:

    While I will agree that some blame needs to be placed on those that took out loans that they could not repay, especially those who took interest only loans (is not that called wagering). Those that were playing flip this house certainly need carry a good amount of the blame. I feel differently when the subject turns to the average person/family that was just trying to fulfill the American dream. However, these people were paying licensed professionals to look after their interest. They hired a Realtor and a lawyer to to assist them with their purchase. These people are bound by a code of ethics to act in their clients best interest (see links at bottom of post). In addition, a banker has a responsibility to only loan money to those who are able to repay. The people I am defending here were almost exclusively purchasing real estate for the first time in their lives. These people have nor did they infer to have any training or special knowledge of this process. When you purchase a property you must sign a great deal of paper work all written in “legaleeze”. These people hired professionals to ensure that these contract were in their fare, and that it was in there best interest to enter into these contracts. These people were not properly represented. I am unaware of what actions they could have taken to better protect themselves.

    Code of Ethics and Standards of Practice
    of the NATIONAL ASSOCIATION OF REALTORS ® (Note: Duties to Clients and Customers):

    [www.realtor.org]

    New York Lawyer’s Code of Professional Responsibility (See: Duty of the Lawyer to a Client):

    [www.law.cornell.edu]