I'm trying to figure out the logistics of all this and it blows the mind. Wouldn't any money AIG does receive have to go to the lawyers, and they'll probably get a few more bailouts.

Wow, its like you give your neighbor cash to stay alive, and they sue you with that same cash. Meanwhile you have to keep giving your neighbor cash so they don't go bankrupt and ruin the neighborhood. You have to have a pretty screwed up morale compass to be a lawyer who is working on AIG's side for this.

We gave them money so that they could, in an orderly fashion, disintegrate. Where in that process are we, exactly?

Why the constant insistence from everyone that AIG ruined the economy? AIG wasn't the sole damning force that got us to where we are today, yet everyone (the media, Congress) wants to use their new favorite whipping boy as a scapegoat for the entire meltdown now. It would be nice to see some slightly more neutral (and correct) reporting from all sources that recognize that the greedy consumers that wanted more house than they knew they could afford, the sleazy mortgage brokers that would do anything to get a commission, the banks that looked the other way in approving loans brought to them by said sleazy brokers, the investors who bought those loans after they were packaged into securities, and back again to the homeowners who defaulted, knocking down the entire string of dominos.

Further, is AIG not allowed to continue to do business? Are they now supposed to dismiss any lawsuit that the govt doesn't like? Are they no longer allowed access to the legal system as a means of redress from what they truly believe was an improperly denied tax credit? As far as these tax shelters go, I don't buy the "abuse" argument. If AIG followed the letter of the law when setting up their structure, they are entitled to the credits. The fact that the IRS later decided that they don't like the way the law is written, and are going to simply refuse to follow it, is BS. There are a lot of smart tax lawyers out there who will always find creative solutions to lowering companies tax burdens. The IRS is just mad that they can't effectively close all the loopholes, so they use terms like "Abusive tax shelter" as a means of denying credits/deductions, etc. to companies that followed all the rules.

You know, the powers that be seem intent on closing Gitmo, couldn't we rather just keep it open and send these obviously corrupt, corporate douchebags there instead?

Im pretty sure the United States is the laughing stock of the universe.

reply to Pylon83:

Agreed - The government loaned money (not given, loaned) to AIG to prevent them from failing under the weight of their own liabilities. Now they have used this money to pay their liabilities - money to foreign banks as insurance payouts, payment of contracted employee compensation and the continued cost of doing business, including ongoing litigation. Now, if you were against the initial loans in the first place, by all means be upset. However, this is WHY we bailed them out. If we didn't want money going to foreign banks or paid as bonuses, then we should not have bailed them out. I know the government owns 80% of AIG and people are calling for them to have more of a say. But that's not how shareholders control companies. They elect directors, and occasionally pass a proposal, but shareholders have very little to no say in the day to day or even month to month operations of a company. Hopefully more of the population will learn how shareholders control companies through this.

So AIG was so important to the financial health of the economy that we had to bail them out. But for them to keep the managers and lower level executives that can fix or undo the damage is unacceptable???

Isn't the bonus crap exactly what the opponents of the rushed Stimulus bill had in mind when they demanded more than 48-hrs to read the 1,100 page bill BEFORE they had to vote?

Outrage over $165 million but a wink & a nod over $800 billion???

With the whole situation I feel like it's a really bad movie that I paid for...got raped when I bought my popcorn and treats...and now I do not like the movie and they are not letting me leave! Pushing me back into my seat.

Why we cannot go in there.. and fix what is right is completely wrong.

So important that the company MUST be bailed out but so objectionable that we must destroy them with the tax code?? How childish

Let's just badger and hobble Citi, BoA, AIG, etc. until they go completely under, taking any chance of any repayment of all this money with them. Sure, that will mean we might as well have set all that money on fire but think how smug and superior we'll feel.

If you want to thump your chest and let everyone know how outraged you are, that's fine, but the fact is that these companies already have the money and if we ever want to see any of it again these companies need to be allowed to operate as something other than lepers and, gasp, that should actually include access to the legal system.

I guess one benefit of having all these new found counters of the federal pennies will be a lot of upcoming Consumerist articles about "Why is that welfare recipient suing the government for benefits" and "It isn't right for handout recipients to be buying cellphones." If people are going to take federal money, it is our obligation to tell them how they are allowed to spend it, after all.

The problem is "moral compass" and "lawyer" don't usually belong in the same sentence in the first place.

@Pylon83: I'll agree that AIG was not the sole cause of the mess we're in. However, not being privy to their accounting books, assuming they followed "all the rules" is a bit of a leap of faith.

Any benefit they get out of this - any tax refund, any lawyers fees, any court costs, right down to the last penny - should be immediately deducted from any future bailout payments they are set to receive.

AIG, BoA... Iran, Iraq... govt will always generate red herring to get our minds off the fact that the economy sucks and govt has no idea how to make it better.

Why buy into this crap! Stop protesting in front people's homes, you're now govt pawns!! Notice that it's not one financial co -- it's every sizable financial company here and worldwide that had trouble. So let's hang a AIG stiff because he's not good enough to switch jobs to Procter Gamble??? Good gawd, stop the lynching!

@Yossarian: +1 Well said.

@wrjohnston19283: So shouldn't they be working overtime to oust the current board of directors and put in a new one that does what they "should"?

@wrjohnston19283: True most shareholders don't take an active role in the running of a company . . . most shareholders also don't have an 80% controlling force though, so the situation is totally different.

Not to go tabloid here, but this sounds like Britney Spears and that jackass that impregnated her. She pays him large sums of money every month, he turns around gets a lawyer to extort more money out of her, and makes her pay for his lawyers as well. So, she's paying for a lawyer to sue herself. Un-freaking-believable.

@Biswalt:
The fact the Govt. owns 80% of AIG doesn't change the powers that they have. All they can really do is oust the board, which can only be done at an annual meeting or at a special meeting. Owning 80% of the shares doesn't give them some special powers or the ability to take a more active role, save for the power to unilaterally replace the board.

Clearly, it's time to release the hounds.

I feel sorry for the grunts who are associated with this company, if such exist. If they know what's good for them they will jump ship and try to find a sympathy job.

Ok, see, I was sort-of ambivalent towards the bonuses. I mean, it's less than a thousandth of what they received in bailout, it's a drop in the bucket. This pisses me off though. Not just because it's a waste of money, but because they are being incredibly stupid, short-sighted, and greedy, instead of just short-sighted and greedy.

At this point, if there is any... trouble, it's not the media whipping the public into a frenzy with sensationalist reporting, it's just a bunch of idiots provoking a mob. It's one thing to be unfairly singled out, and another thing entirely to keep on dicking around once the spotlight is on you

Really? Then why are we the only country who seems to be able to borrow money at decent interest rates?@albokay:

@Pylon83: AIG is the reason those mortgage backed securities were rated so highly, so that all those investors would buy into them - because AIG held credit default swaps on them in order that they would take on AIG's risk rating. See how well that worked?

99% of AIG employees are just working for the weekend and trying to pay the mortgage like everyone else. But because we've all got our undies in a bunch over bonuses to a few hundred people, we're going to sink the whole ship and lose billions of dollars of taxpayer money. @aguacarbonica:

I believe the phrase is, "Don't bite the hand that feeds you."

@johnfrombrooklyn

I believe you and that's been my position all along. The only reason I qualified it with "if such exist" is because it's my personal opinion. I'm rather sick of people talking about EVIL AIG employees like the majority of them even know the company structure.

I hope the nonguilty employees of AIG can recover from having their work history tarnished by this scandal. Times are hard.

Wait, am I misunderstanding this here? It sounds like "we paid countries X, Y, and Z the amount of $TTT dollars in taxes, and are claiming a deduction in that amount." This actually sounds legitimate.

For reference, I live in Vermont. If I were to work in Mass, I'd pay my Vermont income taxes, then pay whatever Mass taxes I'd owe minus the amount of Vermont taxes I'd already paid.

As I said, am I misunderstanding their claim?

The general public is not pissed off because AIG is going about their daily business. AIG has become the picture of complete pomposity of their own volition. The media may have latched onto this story, but AIG seems to not know what AIG is doing, and that makes it so much worse - how could the media ignore it? It's like watching a train wreck in slow motion; every step along the way someone should be doing something to stop it, but instead the finger pointing begins....Too bad the Snowe-Wyden amendment wasn't dropped.

A simple, common-sense approach to this is: use off-shore tax dodges, lose your US citizenship. And dealings with any Federal or state contracts. And pay an "escape fee". And a special tariff.

Needless to say, protection of this hair-brained scheme? Conservatives. Yay, consistency!

This is like your rapist suing you for giving him an STD.

Is anyone else amused by this?

I don't exactly know how well this is going to work out... considering the Government has a majority stake in the company, and their using the bailout money to sue the people who gave it to them >_>

Beggars aren't choosers. AIG should take the money, use it responsibly like how a lot of other businesses are doing these days, and just shut the F up.

Call me a xenophobe but fuck the global economy and fuck the large corporate whores who are ruining this country, and while I am at it fuck all politicians who take donations from large corporations and lobbyists. If we had public finance of political races with mandatory full financial disclosure of all politicians and their immediate family members this shit would stop. Don't cry about privacy rights this is the same group of people who have abused their positions of public trust for there own financial gain over and over. If you are an honest politician sorry but you know better then anybody why this is necessary. All trade with others should be balanced against a scale including worker pay, standard of living, human rights, and environmental impact and appreciate tariffs applied to level the field for everyone. Face it folks our standard of living in the U.S.A. is going down the tubes ( for average folks ) as we increase the standard of living every where else

uh... just from a person's perspective that doesn't know much. After hearing about how AIG help screw over the economy, now they're suing our government which is in debt do the economy, this just makes AIG look really bad, and I would take my business elsewhere if I haven't already. Honestly, they want to get more money from the gov, which in turn out make the economy crappier, which in turn would probably hurt them? I'm baffled by these people. Honestly, can't they just live off like 50% of what they already have, which is probably like 5 times more than any normal person makes but still lives by it. >.>

When a dog goes bad and starts biting the master, you take it out behind the shed. Maybe it's time to take AIG out behind the shed.

I think AIG automatically wins Worst Company 2009.

@PittDragon:

Agreed. Talk about a head-scratcher. Certain phrases like "biting the hand that feeds you" and "monetary black hole" come to mind. Seems like it would be better to avoid all these problems and let them go bankrupt.

@johnfrombrooklyn: Because its imaginary money. It doesnt actually exist (The recession is correcting that by removing imaginary assets).

@Pylon 83: (by the by, replying to someone hasn't worked for me in weeks...)

Even if - *IF* - AIG played by the rules, firms like them have pumped millions in political donations and lobbying in order to change those rules in ways which did ruin the economy (along w/ NAFTA, the WTO, the Taft Hartley Act and Dickensian minimum wage laws.)

@albokay: You exaggerate. We are only the laughing stock of this galaxy. I hear the planet over in galaxy 247-B are the laughing stock of the universe.

@ Kimaroo: at this point comcast would have to burn up about 100 houses this year to beat AIG. Its kind of sad really.

I know there;s a bigger picture, but as just an everyday, normal citizen, I'm still pissed off that money I busted my ass for went to some company suits that I have absolutely no dealings with, and to top it off the used even part of it to fund their lavish lifestyle. I say screw them, I didn't get them into this mess and I have no obligation or desire to help them get out of it.

"...ruined our economy..."

I want a source for that.

Or can you just make things up and call it "journalism"?

@MooseOfReason: If, at this late stage in the game, you're not up with events, it's not the shared responsibility of Consumerist commentators to school you.
I hear the internet is a source of information. Perhaps you can find a bright sixth-grader to show you how to use it?

At one time, Exxon was was practically declared too big to succeed, and talks of "windfall" taxes where discussed. Now AIG is declared too big to fail, and is receiving windfall benefit of all our taxes.

In both cases, the consumer is hurt via higher prices or higher taxes.

And no, I do *not* think AIG is too big to fail.

Okay, apparently, I need a bright sixth grader to help me understand the internet.

Trai_Dep, would you mind explaining it to me?

@Yossarian: Well, AIG cannot earn back or replace the money we've given them. Their business plan was fraudulent and the company's whole purpose became to be the ground zero for a financial collapse after making a lot of rich people even richer. Mission accomplished.

So no, screw AIG. Once their liabilities (which are the keystone to the overall financial fraud we've been subjected to) are paid out, they should be closed down, all branches, all divisions.

The real answer to the problem is for the government to truly nationalize AIG. They could then go in and clean out the mess, firing those deserving souls and getting new people who are willing to get on with the job of salveging that which is savable and dumping that which is not. They can then return the now viable company to privet hands, under, we hope, a much more stringent regulatory system. No fuss no mess.