Quit the charades over AIG
Published 4:51 pm Friday, March 20, 2009
Like many of you, I have been following the “AIG Bonus Scandal.”
It was announced last week that American International Group, an enormous insurance and financial services company, had paid retention bonuses worth $165 million to more than 400 former and current employees.
Now, most times under normal circumstances, these payments wouldn’t have even garnered a second look by anyone outside the corporate boardroom. But these are not normal circumstances considering that AIG has received $180 billion in aid from the U.S. Treasury. These uncovering of these bonus payments have raised the ire of the general public and the Congress. As well it should.
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Now, Congress is demanding the employees who received the bonuses return the money. In fact, by a vote of 328-93, the House of Representatives voted Thursday to impose a 90 percent tax on the AIG bonus money. Congressman Sanford Bishop of the 2nd District of Georgia, our congressman, was one of the 328 yes votes. The only reason the payments were not taxed at 100 percent is that “the other 10 percent will be taken care of by state and local taxes.” That according to New York Rep. Charlie Rangel.
I wonder if the 328 Congressional members who voted for this tax realizes their actions are unconstitutional.
The U.S. Constitution does not allow for Congress to pass Bills of Attainder, which are a legislative acts that single out one or more persons and impose punishment on them, without benefit of trial. Although I am not a legal scholar, it seems that a Bill of Attainder is a perfect description of this bogus legislation.
The House bill was expanded to include all future bonuses in excess of $100,000 to employees with household income of more than $250,000, if the bonuses were paid by a company that received at least $5 billion in federal aid. But, let’s be clear, this new tax law is targeted at the 400 AIG employees.
What happened during the Congressional hearings when AIG Chairman Edward Liddy was questioned about the bonuses is scary to me. To see members of Congress out and out threaten private citizens makes me wonder where we are headed as a country. To see Congressman Barney Frank from Massachusetts demand a list of the employees who received the bonuses raises questions of how long we will remain a free society.
The fact that some of those who received the bonuses had received death threats and threats against their families did not seem to faze Frank. And don’t think I am only pointing out Democrats, the comments made by Sen. Charles Grassley, suggesting these employees “either give the money back or commit suicide” is ill-conceived and in incredibly bad taste.
But, in my view, the ire is aimed at the wrong people. To be clear, awarding bonuses of that magnitude to employees of company that lost $60 billion during the last reporting quarter is absurd. But the employees did nothing wrong by accepting the money. AIG was contractually bound, (these agreements were established well before any federal money changed hands), to pay these employees, right or wrong.
Punish the company, not the employees. Withhold $165 million from the next $30 billion that AIG is expected to receive. Heck, let the company go bankrupt. I don’t buy the concept that any company is “too big to fail.”
The actions of Congress and the White House surrounding this controversy is nothing more than a charade, a “look how mad we are over this, and we’ll get our money back” act.
If our president and members of Congress had actually read the 1,000-page stimulus package, they would have known about the scheduled bonuses, and it wouldn’t have come as such a surprise.
If Rep. Chris Dodd of Connecticut and Treasury Secretary Tim Geithner had better memories, they could get their stories straight about who wanted the “contractually obligated bonuses agreed on or before Feb. 11, 2009,” exclusion in the stimulus bill. If the president would quit worrying about the NCAA basketball bracket and disparaging participants in the Special Olympics, maybe we could get this economy moving again.
If members of Congress continue to believe that they are above the law and can single out private citizens with punitive legislation, then we are all in trouble.