AIG: back at the trough

Weissman

They’re back at the trough. The folks at AIG don’t get it. Do they expect to be congratulated for taking $100 million in bonus payments instead of $110 million or $120 million? Payment of the bonuses is justified as contractually required but the government-owned AIG can honor such contractual terms only because the firm was rescued with $180 billion in taxpayer supports.

This latest outrage comes on top of reports that emerged in recent months that AIG employees en masse reneged on promises made last year to return bonus payments.

The refrain that bonus payments must be made to retain “talent” doesn’t even qualify as a cruel joke. This is the so-called talent that presided over the collapse of AIG and cost taxpayers countless billions.

Congress is not helpless on this issue, and has no excuse for failing to take action. When the AIG bonus scandal broke, there was serious talk of imposing a 90 percent tax on the bonus payments. Once fooled, it is time for Congress to return to this remedy.

AIG, of course, is only the most egregious example of bonus abuse. It is time for Congress to adopt an across-the-board windfall bonus tax on Wall Street and the financial sector. The place to start is by taking up the Responsible Banking Act, introduced by Rep. Dennis Kucinich (D-Ohio).

Robert Weissman is president of Public Citizen.