Tales from the Trail

Washington shocked Wall Streeters took money

Lawmakers were shocked, shocked, shocked that Wall Streeters at insurance firm AIG took bonuses with one hand while grabbing a government handout with the other.

They expressed outrage at a House financial services subcommittee hearing following public outcry that millions of dollars of retention bonuses were  given to employees at AIG while the floundering company used billions of dollars of taxpayer money to try to regain its footing.

Rep. Barney Frank wanted names, names, names, of those who took the bonuses, and he posted  AIG contracts (without the names) on the Web. Advisory: they’re full of legal-speak, not easily digestible for non-lawyers.

FINANCIAL/AIG

Rep. Gary Ackerman captured the emotion of the event: “Those of us who are laughing are crying,” he said. “There’s a lot of people trying to cover their bare assets.”

AIG chief executive Edward Liddy, who came out of retirement six months ago to take that job (which raises all sorts of other questions such as WHY would someone pick this over tee time?), started out with a line very familiar in Washington: “Mistakes were made.”

First Draft: AIG’s Liddy in the hot seat

The main event in Wednesday’s Washington circus has to be at the House of Representatives Financial Services Committee, where AIG chief executive Edward Liddy is set to testify this morning. The title of the hearing — “America International Group’s (AIG) Impact on the Global Economy: Before, During and After Federal Intervention” — doesn’t quite convey the catcalls and outrage expected. The $165 million in bonuses to AIG execs is the flash point, even though the company could get more than a $170 billion in taxpayer bailout money.

HONGKONG/Perhaps seeking to pre-empt the hearing, or at least soften the reception he’ll get, Liddy wrote an op-ed in the Washington Post, letting readers know that “I am mindful of the outrage of the American public and of the president’s call for a more restrained compensation system. I am also mindful that every decision we make at AIG has consequences for the American taxpayer.”

Liddy isn’t the only one who could feel the heat. Scott Polakoff, the acting director of the Office of Thrift Supervision and Joel Ario, representing the National Association of Insurance Commissioners, and Rodney Clark, managing director for insurance ratings at Standard & Poor’s, are all scheduled to testify.