Angry reaction to AIG bonuses

March 16, 2009 9:09:13 PM PDT
President Obama is vowing to try to block AIG employees from pocketing $165 million dollars in bonuses. But despite the insurance giant getting more than $170 billion taxpayer dollars to stay afloat, it may be too late. Outrage over AIG's actions could be heard all over the country on Monday. There was anger from the White House to Congress to Chicago's Loop on Monday night.

But most of the bonuses have been paid already so getting any of that money back from individuals may be impossible.

"They're getting bonuses for not doing their job," said Joey Bachewicz, a Chicago taxpayer. "Guess what, if I don't do my job, I don't get paid."

Taxpayers were disgusted in front of AIG's downtown Chicago offices on Monday evening.

"I work really hard for my money and I don't want to give it to people who don't even do what they're supposed to for their own company," said Mary Mendel, another Chicago taxpayer.

President Obama tried to make it clear on Monday he is just as angry.

"I mean, how do they justify this outrage to the taxpayers who are keeping the company afloat," the president said.

But there may not be much can do to take back the $165 million in bonuses AIG has already paid -- much of that money going to executives in the Financial Products division, the same people blamed for AIG's near collapse.

"They probably are bound legally," said Harold Krent, dean of the Chicago-Kent College of Law.

Krent says legally AIG appears to be contractually bound to pay these bonuses. He says Congress could have prevented this by attaching conditions to the $170 billion in bailout money AIG received.

"There will be some bonus payments I understand in several months. It might be possible to work out a plan to renegotiate some of these bonus payments with the employees," Krent said.

Mayor Daley expressed what many Chicagoans are feeling, saying, "To just give them bonuses, I think the American public does not understand it."

And there seems to be consensus in Congress now that if AIG is to get anymore bailout money, it will come with very specific conditions.

"If AIG and their leaders are dumb enough to pay these bonuses, we should be smart enough not to give them a further dime," said Republican Congressman Mark Kirk, who represents Chicago's North Suburbs.

The president directed Treasury Secretary Timoty Geithner to pursue every legal avenue to try to block these bonuses. If that doesn't work, however, the White House is looking ahead to the additional $30 billion pledged to AIG.

The White House says it will try to modify conditions on that money to try to recoup all these millions paid out in bonuses.