AIG Still Hasn't Paid Back The Bonuses That Sparked Outrage
This is a story about what happens when populist outrage flares white-hot and then quickly fades away.
Last spring, thousands of angry protesters stormed Wall Street and stalked the driveways of AIG executives, some of whom reported receiving death threats over the revelation that the bailed-out firm was paying out $168 million in bonuses. President Obama called the bonuses an "outrage" and the anger spread from demonstrations around the country and cable news shows to the halls of Congress and newspaper front pages.
This firestorm of rage was only fueled by the fact that the insurance giant received $180 billion in taxpayer funds during the bailout and was paying out huge bonuses to employees at its financial products division, which caused the company's meltdown and helped fuel the financial crisis.
The firm sought to tamp down the outrage by quickly vowing to return $45 million in "retention payments" by the end of the year. But as of August, only $19 million had been repaid by the unit's traders and only four of five managers made good on their pledges, according to TARP Special Inspector General Neil Barofsky and Bloomberg News.
An AIG spokeswoman emphasized at the time that the firm expects the workers to honor their commitments.
Now, in a little-noticed development, it looks like that money may not be repaid by the end of the year -- if ever. A spokesperson for AIG tells Huffington Post that "we have no update on the $19 million figure."
AIG claims that the additional $26 million in repayments is being discussed in negotiations over compensation with Obama's pay czar Kenneth Feinberg. A spokesman for Feinberg confirmed that the repayments are part of ongoing negotiations.