The insurer, already bailed out by the government to the tune of $85 billion, is guilty of stupid spending, including an obscene $442,000 junket at a luxury California resort. Now, the WSJ says AIG kept lobbying for looser oversight rules even as it took the government's cash, which isn't prohibited at the moment but is obviously poor form.
So, it feels pretty good when New York Attorney General Andrew Cuomo says he wants to take back the bonuses of some top AIG's executives, and is threatening more formal action if it doesn't happen.
Too bad he's wrong. The question of bonuses is different. Unless the gains prove ill-gotten, is it now the job of regulators to take back every dumb dime made during the credit mess? Cuomo talks about a bonus and "golden parachute" worth $20 million that AIG gave then CEO Martin Sullivan in March, before the bailout and something the government presumably knew about when it made its rescue loan.
By that logic, local cops should be knocking down doors at real estate offices across the country, and setting up road blocks outside of a few half-finished Las Vegas subdivisions to confiscate whatever belongings are left to house flippers who got caught on the wrong end of the deal.
If Cuomo finds fraud at the insurer, then by all means break out the handcuffs. But if we assume the government knew what it was buying, retribution after the fact looks like an unfortunate bout of grandstanding.
Reader Comments Read all comments (4)
of PA 1:14PM October 21, 2008
Gina of NY 9:55AM October 20, 2008
smitty of TN 4:36PM October 16, 2008