TPM News

AIG CEO To Defend Company And Bonuses Before Congress Today AIG CEO Edward Liddy will be testifying today before the House Financial Services subcommittee, defending his company amidst the public uproar over the massive bonuses paid to its Financial Products division. The hearing begins at 10 a.m. ET.

Obama's Day Ahead President Obama is holding a closed meeting with the Congressional Hispanic Caucus at 10:45 a.m. ET.

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Since the AIG bonus brouhaha broke over the weekend, the hobbled insurance giant has essentially been claiming it had to make the payments because not doing so could have created a "defalt event," potentially exposing taxpayers to losses of hundreds of billions down the road.

That may or may not be a legitimate argument (most experts seem to be saying "not"). But it's worth noting that just a few short years ago, there was a case in which AIG wasn't quite so fastidious about honoring bonus agreements with its employees.

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Here's the newest ad from Jim Tedisco, the Republican candidate for Kirsten Gillibrand's former House seat -- seemingly tying himself to Barack Obama:



Tedisco says: "Like the President says, in these difficult times, we're not Republicans or Democrats -- we're Americans. And that's the team I'm on."

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We might all be waiting on a ruling from the Minnesota election court -- but even that doesn't stop the stream of interesting legal filings in this never-ending dispute.

The Star-Tribune reports that the the Franken campaign submitted over the weekend their specific list of rejected absentee ballots to be considered for counting, and it adds up to 430 envelopes -- 131 more than the number they'd given during closing arguments. All the ballots were already in evidence, so this is still allowable.

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Have you been wondering whether Treasury Secretary Tim Geithner is leaving some key details out in the chronology of his negotiations with AIG CEO Edward Liddy?

Since Geithner knew about Liddy's plans to pay out the company's now-infamous bonuses before they became public on Saturday -- and since the bonuses have been common knowledge in the media for months -- it's worth asking how directly Treasury was involved in okaying the payouts.

But it's too bad for Democrats that Republicans are the ones seeking the information.

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The Bradley Schlozman saga might have some life left in it, yet.

The Justice Department is reviewing a decision made earlier this year under the Bush Administration not to charge Schlozman, the former official who was found by an Inspector General report to have made false statements to the Senate about whether he considered political affiliations in hiring.

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The answer, of course, is fallen-from-grace New York Gov. Eliot Spitzer (D).

His pursuit of alleged wrongdoing at AIG was so relentless that some conservative-leaning commentators attempted to pin the company's downfall on Spitzer ... who had his own downfall to deal with by then.

But for no other reason than his insider's knowledge of AIG, it's worth reading Spitzer's take on the troubled company. The ex-governor agrees with Rep. Brad Sherman (D-CA), who told TPMDC yesterday that the brouhaha over bonuses is a "red herring" of sorts that distracts attention from the truth of the AIG bailout: $100 billion of the taxpayers' $170 billion went not to bonuses, but to bailing out AIG's counterparties.

House Speaker Nancy Pelosi (D-CA) just released a statement announcing that her Democrats will offer legislation this week to recoup AIG's now-infamous executive bonuses. Here's the statement from her office:

The House committees are considering several actions to recoup taxpayer dollars, such as:

· Authorizing the U.S. Attorney General to recover prior and future excessive compensation payments made by companies, such as AIG, that received federal financial assistance;

· Prohibiting abuse of retention bonuses by companies receiving capital infusions from Treasury; and

· Recouping a substantial portion of the bonuses through special taxation legislation.


Pelosi also noted that "Congress has already passed legislation signed into law by President Obama last month that protects taxpayers from excessive executive compensation."

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More from the Joseph Cassano files, which are proving to be very interesting indeed.

According to an SEC filing made this month by AIG, a company shareholder in January filed a lawsuit charging Cassano with concealing his financial product unit's massive losses. Cassano stepped down as the head of the unit -- which made the credit default swaps that drove AIG into the ground -- last year.

Here's the full relevant portion of the filing:

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Before he became White House budget director, Peter Orszag headed the non-partisan Congressional Budget Office -- and in a little-noticed blog post six months ago, he called for "more clarity" on the relative solvency of individual banks as a means to help heal the economic crisis.

Orszag's call for transparency about the financial health of banks came during the early days of the bailout debate, before the Bush Treasury Department abandoned its plan to purchase toxic assets from banks and decided to provide large-scale capital injections instead. The bulk of his blog post is dedicated to a defense of mark-to-market accounting standards, which government financial regulators are about to relax.

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