WASHINGTON – Rep. Leonard Lance (NJ-07), a member of the House Financial Services Committee, today said he was outraged with news reports that the American International Group Inc. (AIG) will pay an additional $450 million in executive bonuses. Lance said he did not support the bonuses because AIG received $173.3 billion in taxpayer dollars from the Troubled Asset Relief Program also known as TARP.
Specifically, Lance urged Treasury Secretary Timothy Geithner to examine immediately all legal options to recover taxpayer funds from companies like AIG that have abused the privilege of taxpayer assistance and to consider all options available that would block AIG executive bonuses.
“I am outraged by the massive bonus payments announced by AIG,” Lance told Geithner Monday. “I ask that you immediately examine all legal options to recover taxpayer funds from companies like AIG that have abused the privilege of taxpayer assistance. These levels of payments to executives are excessive considering AIG has accepted $173.3 billion in taxpayer funds and recently reported a 2008 fourth quarter loss of more than $60 billion. Equally troubling is the fact that these bonus payments are going to executives at the AIG financial products unit – the same business unit that the Wall Street Journal said was “at the heart of AIG's collapse last fall.””
Lance said as a member of the House Financial Services Committee he would remain steadfast in his efforts to work with the Obama Administration and congressional leaders in passing tough executive compensation and responsibility measures to ensure that taxpayers are protected.
Lance’s letter to Geithner is attached.
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March 16, 2009
The Honorable Timothy Geithner
Secretary
United States Department of the Treasury
1500 Pennsylvania Avenue, NW
Washington D.C., 20220
Dear Secretary Geithner:
I am outraged by the massive bonus payments announced by American International Group Inc. (AIG) and ask that you immediately examine options that are legally available to recover taxpayer funds from companies like AIG that have abused the privilege of taxpayer assistance.
According to news reports, AIG is now paying an additional $450 million in executive bonuses. This brings AIG’s total amount of bonuses or “retention payments” for 2008 to approximately $1.2 billion. Like many of my colleagues, I find these levels of payments to executives excessive considering AIG has accepted $173.3 billion in taxpayer dollars and recently reported a 2008 fourth quarter loss of more than $60 billion.
Equally troubling is the fact that these bonus payments are going to executives at the AIG financial products unit – the same business unit that the Wall Street Journal said was “at the heart of AIG's collapse last fall.”
It is my understanding that AIG’s Chief Executive Officer Edward Liddy has been advised that these payments are “legal, binding obligations of AIG” entered into by the company before the bailouts were received. It is imperative that Treasury acts on behalf of the U.S. taxpayer and investigate this claim. I also ask that you consider any option available to block AIG executive bonuses.
As a member of the House Financial Services Committee I am proud to have worked with you, the Obama Administration and congressional leaders in a bipartisan manner in passing tough executive compensation and responsibility measures to ensure that taxpayers are protected. I hope you will continue to work with the Congress to take all action necessary to ensure transparency and accountability in the Troubled Asset Relief Program (TARP).
Best personal wishes.
Sincerely,
Leonard Lance
Member of Congress
