Now that Congress, Barack Obama, and the media feel thoroughly satisfied in their two-week screechfest over AIG’s retention bonuses, the bill may come due for American taxpayers who invested in the company’s bailout to the tune of over 1,000 times the amount of the bonuses. The New York Times reprints a resignation letter from one of the targets of Official Ire over the bonuses, a man who worked for the huge salary of $1 apart from the bonus he was promised for helping rescue the company from bankruptcy. He blames Edward Liddy for not defending his employees, and refuses to work any longer for no compensation:
It is with deep regret that I submit my notice of resignation from A.I.G. Financial Products. I hope you take the time to read this entire letter. Before describing the details of my decision, I want to offer some context:
I am proud of everything I have done for the commodity and equity divisions of A.I.G.-F.P. I was in no way involved in — or responsible for — the credit default swap transactions that have hamstrung A.I.G. Nor were more than a handful of the 400 current employees of A.I.G.-F.P. Most of those responsible have left the company and have conspicuously escaped the public outrage.
After 12 months of hard work dismantling the company — during which A.I.G. reassured us many times we would be rewarded in March 2009 — we in the financial products unit have been betrayed by A.I.G. and are being unfairly persecuted by elected officials. In response to this, I will now leave the company and donate my entire post-tax retention payment to those suffering from the global economic downturn. My intent is to keep none of the money myself.
I take this action after 11 years of dedicated, honorable service to A.I.G. I can no longer effectively perform my duties in this dysfunctional environment, nor am I being paid to do so. Like you, I was asked to work for an annual salary of $1, and I agreed out of a sense of duty to the company and to the public officials who have come to its aid. Having now been let down by both, I can no longer justify spending 10, 12, 14 hours a day away from my family for the benefit of those who have let me down.
Last week, I wrote that I expected Liddy to say this to Congress in response to their entirely hypocritical, false, and calculated outrage. Liddy apparently didn’t have the courage of Jake DeSantis, who refuses to stick around and be abused by people who have no clue as to what he does and how he got compensated for it. DeSantis does, and the Times should get some kudos for giving him a voice.
The US has invested over $150 billion in AIG, expecting to get at least some of that value returned. If not, we could simply have made direct payments on behalf of AIG to its creditors and allowed the company to go bankrupt. In order to get value back out of the company, we need to have people on board who understand the complicated financial provisions of AIG’s problems and can apply the investment towards resolving them. In other words, we needed Jake DeSantis on that wall, and we just did everything we could to knock him off of it, along with the rest of his colleagues.
People have been calling the AIG bonus outrage “understandable.” That’s a load of crap. It springs from a fundamental lack of understanding in Congress about the business world and an almost criminal lack of curiosity about the nature of retention bonuses in general, and these retention bonuses and their recipients in particular. The screeching and hollering was only “understandable” as complete and total ignorance and stupidity. And that’s not even accounting for the fact that Treasury, Congress, and the Obama administration knew all about these bonuses long before being “outraged” by them.
Now DeSantis is leaving, and the rest of the people that we’ve pilloried without having a clue who they were, what they did, and what they’re doing now will probably follow as soon as they can find jobs. Why rescue a bunch of ingrates, after all? Let Obama, Barney Frank, and Chris Dodd rescue AIG instead.