Although I am not surprised that AIG came back to beg the government for additional taxpayer assistance, I am disturbed that it happened so soon -- particularly after CEO Edward Liddy told me on January 15th that he expected to re-pay the government early. To me, this means that Mr. Liddy was either once again being less than honest or that he has no idea what is happening with his company -- and both of these scenarios are unacceptable.
American taxpayers have already invested so much in keeping AIG afloat because of the risks to our financial system posed by the obligations the company is supporting, and it is important that we continue to do everything we can to keep it from going under. However, there are still too many unanswered questions about how AIG spent its first portion of TARP assistance. We cannot allow the pattern of deception by this company to continue. Transparency and accountability are more critical than ever.
AIG's 10-K filing this morning has raised even more questions about how the company is being managed. Spending $57 million on 'retention payments' for employees expected to be terminated is ludicrous, and it tells me that this company has no respect for the aid it is receiving or for the Americans whose hard-earned taxpayer dollars are keeping the company alive.
Equally disturbing in the 10-K filing are AIG's strong complaints against the limits on executive compensation that were established by the American Recovery and Reinvestment Act. If it were not for TARP assistance, these executives would not be making any money at all. It is audacious to reject the commonsense accountability measures put in place to protect taxpayer dollars, and it is time for Mr. Liddy to come back from whatever planet he is on and visit us here in reality. I am puzzled by AIG's statement that it has 'embraced a pay-for-performance philosophy.' Surely this cannot be in reference to the approximately $450 million in retention payments being given to employees of the Financial Products division whose performance brought the company down in the first place.
American taxpayers now essentially own AIG, and we are thus entitled to complete disclosure of how the business is being run and where these funds are being spent. This information must include a complete review of the company's compensation policies, with particular emphasis paid to the more than $1 billion in 'retention payments' that have been distributed even while the company is failing.
We also need to seriously re-evaluate the leadership at AIG and determine whether a change would be appropriate at this point. Each passing week brings to light more recklessness and disorganization by this company. As millions of taxpayers who are footing the bill for AIG's bonuses and parties are losing their jobs and homes, we continue to see examples of profligate spending and irresponsible decision-making by the company's leadership.