AIG CEO Liddy Confronted On Capitol Hill
MICHELE NORRIS, host:
From NPR News, this is ALL THINGS CONSIDERED. I'm Michele Norris.
MELISSA BLOCK, host:
And I'm Melissa Block.
President Barack Obama weighed in again today on the AIG controversy. He said the bonuses that have caused such a public uproar are only part of the problem.
President BARACK OBAMA: Just as outrageous is the culture that these bonuses are a symptom of - that have existed for far too long. A situation where excess greed, excess compensation, excess risk taking have all made us vulnerable and left us holding the bag.
BLOCK: That sentiment was echoed on Capitol Hill. That's where the current chairman and CEO of AIG, Edward Liddy, endured withering criticism from lawmakers. Liddy said he's asked employees to give some of the bonus money back.
NPR's John Ydstie reports.
JOHN YDSTIE: Members of Congress seem prime for a confrontation with Liddy as they made opening statements at the financial services subcommittee hearing. Here's Ron Klein, a Democrat from Florida.
Representative RON KLEIN (Democrat, Florida): When I'm back in my district in south Florida, I talk to people who have lost their jobs, their health care, their homes or the value of their pension and investments. And here we are sitting today, or we will be sitting before the chairman and CEO of AIG who distributed million dollar bonuses to those who drove the company and possibly our economy into the ground. There's a tremendous disconnect between the American people and the executive officers of AIG.
YDSTIE: And the hearing did have its theater. Several women dressed in pink waving signs reading, among other things, crooks. Subcommittee Chairman Paul Kanjorski of Pennsylvania attempted to restore order.
Representative PAUL KANJORSKI (Democrat, Pennsylvania): Those of you that are in pink with the signs - or you're going to surrender those signs so they could be held for you later on, or do you want to be removed from the room?
Unidentified Woman: We want to surrender our signs, sir.
Rep. KANJORSKI: Officers, take the signs. Now, if I see any more signs on camera, you're going to be physically removed from this room.
YDSTIE: But when Liddy showed up at the witness table, he almost immediately began to diffuse the situation. He said he'd heard the American people loudly and clearly in the last few days.
Mr. EDWARD LIDDY (CEO, American International Group): Accordingly, this morning I have asked the employees of AIG financial products to step up and do the right thing. Specifically, I've asked those who received retention payments in excess of $100,000 or more, to return at least half of those payments. Some have already stepped forward and offered to give up 100 percent of their payments.
YDSTIE: Liddy further calmed the waters by asserting that there were no performance bonuses paid to the employees responsible for bringing AIG down -only payments aimed at retaining employees to wind down the company.
Mr. LIDDY: The people who were primarily responsible for credit default swaps that brought us to our knees, they're gone. The people who were responsible for regulatory capital trades that are - have some exposure, they're gone. But the people who still operate a $1.6 trillion trading book of business, we aren't losing the kinds of dollars on that that we've lost on credit default swaps, they are still there.
Unidentified Man: Those are the ones…
Mr. LIDDY: And they're the ones that are winding that book of business down.
Unidentified Man: They got the retention bonuses.
Mr. LIDDY: Yes they did.
YDSTIE: The point of the retention payments, Liddy said, was to keep employees in place while they essentially work themselves out of a job. Massachusetts Democrat Barney Frank wanted to make sure he'd heard correctly.
Representative BARNEY FRANK (Democrat, Massachusetts): So you're telling me the only bonuses that were paid recently were the retention bonuses.
Mr. LIDDY: Yes.
Rep. FRANK: There were no other bonuses paid?
Mr. LIDDY: Not at AIG FP. No, I don't believe so.
YDSTIE: But Frank said he still wanted a list of all the employees who had received bonuses. Liddy said he would provide it only if it remained confidential because of threats his employees have received.
Mr. LIDDY: I'm just really concerned about the safety of our people. So let me just read two things to you. All the executives and their family should be executed with piano wire around their necks. My greatest hope - if the government can't do this properly, we the people will take it in our own hands and see that justice is done. I'm looking for all the CEO's names, kids, where they live, et cetera. You have a legitimate request.
Rep. FRANK: Well…
Mr. LIDDY: I want to protect the well-being of our employees.
Rep. FRANK: I understand that. Many of us get these kinds of threats. Clearly, those threats are despicable.
YDSTIE: Frank said he would be guided by the advice of House security officials, but did not withdraw the request. Treasury Secretary Timothy Geithner has taken a lot of criticism for the AIG bonuses, especially from Republicans who've argued he should've known about them. But Liddy said his point of contact with the government was the Federal Reserve, with whom he'd been discussing the bonuses for months.
He said he'd only recently talked to Geithner about them. While that may take some of the heat off of Geithner, lawmakers still seem interested in recovering the bonuses, either by taxing them 100 percent, or through legal suits on behalf of the government.
John Ydstie, NPR News, Washington.
NPR transcripts are created on a rush deadline by a contractor for NPR, and accuracy and availability may vary. This text may not be in its final form and may be updated or revised in the future. Please be aware that the authoritative record of NPR’s programming is the audio.