OFFICE OF THE MAJORITY LEADER

TRANSCRIPT

Indignation Over AIG Executive Bonuses on Bloomberg
March 17, 2009

... AIG PAID EXECUTIVES $165 MILLION IN BONUSES AFTER IT GOT $170 BILLION IN BAILOUT FUNDS. PUBLIC SENTIMENT HAS TURNED FROM FRUSTRATION TO FURY. KEN, AS DO ANYTHING TO GET THIS MONEY BACK AND MAKE SURE IT DOES NOT HAPPEN AGAIN? I'M JOINED NOW BY HOUSE MAJORITY LEADER STENY HOYER. CONGRESSMAN, THANK YOU VERY MUCH FOR JOINING US. EARLIER IN THE PROGRAM, WE HEARD FROM A CORPORATE GOVERNANCE EXPERT WHO SAID THERE IS ABSOLUTELY NO WAY FOR THE GOVERNMENT TO GET THIS MONEY BACK. WHAT IS YOUR REACTION TO THAT? >> WE ARE LOOKING TO SEE WHETHER LEGALLY THAT IS THE CASE. FRANKLY, SOME OF THESE PEOPLE HAVE NO SHAME. THE FACT OF THE MATTER IS THAT THEY'RE THE ONES THAT PUT AIG AT GREAT RISK. WHEN THE BUBBLE BURST, THE FEDERAL GOVERNMENT HAD TO STEP IN THE TIME. THE WAVE OF RAMIFICATIONS WOULD NOT UNDERMINE NOT JUST THE ECONOMY OF THIS COUNTRY, BUT INTERNATIONALLY, AS WELL. IT'S NOT A QUESTION OF WHETHER OR NOT WE CAN TURN IT AROUND. AS CHRISTOPHER DODD, BARNEY FRANK, AND OTHERS HAVE SAID, WE ARE LOOKING FOR WAYS THAT THIS CAN BE TURNED AROUND. WE ARE STAKEHOLDER IN AIG. THE SHOCKING THING TO ME IS THAT THESE EXECUTIVES HAVE THE TEMERITY TO TAKE THESE BONUSES. THEY SHOULD GIVE THEM BACK. >> SHORT OF GIVING THEM BACK, YOU SAID YOU'RE LOOKING AT WAYS FOR CONGRESS TO GET IT BACK? >> WE ARE A MAJORITY INTEREST HOLDER IN AIG AT THIS POINT IN TIME. WHAT WE CAN DO FROM THAT PERSPECTIVE, WE'RE LOOKING AT THAT. WE'RE LOOKING AT IT FROM A TAX PERSPECTIVE. A NEW MEMBER FROM MICHIGAN IS LOOKING AT THE TAX FOR BONUSES, SIMILAR TO WHAT CHRISTOPHER DODD IS LOOKING AT. THE ADMINISTRATION HAS DIRECTED TIM GEITHNER TO LOOK AT ALL THE WAYS POSSIBLE. IN ADDITION, THE NEW CEO OF AIG OPINES THAT ONE OF THE PROBLEMS IS THAT WE CANNOT HAVE THESE PEOPLE LEAVE BECAUSE THEY'RE THE ONLY ONES THAT UNDERSTAND HOW TO GET OUT OF THE MESS THAT THEY CREATED. I CANNOT BELIEVE THAT THE AIG EXECUTIVES WHO ARE GETTING THIS BONUS MONEY DO NOT REALIZE HOW DYSFUNCTIONAL THEY LOOK, HOW GREEDY THEY LOOK, AND HOW INSENSITIVE THEY LOOK, HAVING THE AMERICAN TAXPAYER PONY UP BILLIONS OF DOLLARS, BUT NONETHELESS, THEY HAVE THE TEMERITY TO TAKE THESE BONUSES. >> YOU JUST MENTIONED SOME OF THE MEASURES YOU'RE LOOKING TO LEGALLY. IS THIS PART OF THE LANGUAGE? I KNOW THAT 80 HOUSE DEMOCRATS SENT A NOTE TO THE PRESIDENT. THERE WAS A HINT THAT IF THE SITUATION WAS NOT ADDRESSED IN A WAY THAT THE MAJORITY WOULD LIKE, THERE WOULD BE CONSEQUENCES. IS THAT THE LIST THAT YOU JUST GAVE BETTY, OR ARE THERE OTHER THINGS YOU'RE CONSIDERING? >> THERE ARE A LIST OF OPTIONS. THERE'S A LIST OF OPTIONS THAT ARE BEING CONSIDERED. THE PRESIDENT ALSO MADE A VERY THOUGHTFUL COMMENT, AS HE ALWAYS DOES, THAT THEY CANNOT SIMPLY ACT OUT OF ANGER. WE NEED TO ACT AND THE BEST INTEREST OF OUR ECONOMY AND IN THE BEST INTEREST OF OUR COUNTRY. AS ANGRY AS WE MAY BE AT AIG, WE NEED TO GET OUT OF THIS DEEP HOLE. THE $1.6 TRILLION, NOT BILLIONS, BUT TRILLIONS OF ADDITIONAL LIABILITY THAT AIG MAY HAVE IN THESE DERIVATIVES AND CREDIT DEFAULT SWAPS THAT THEY CREATED. NOW WE SEE THAT THE RISK WAS REAL. IT HAS COME HOME TO ROOST. THESE EXECUTIVES WHO WERE TAKING BONUSES TO NOT TAKE RESPONSIBILITY FOR IT. THAT IS A SHAME. WE CONTINUE TO LOOK AT THE OPTIONS AVAILABLE. >> I WAS TALKING TO FORMER SEC CHAIRMAN ARTHUR LEVITT EARLIER. HE ARGUES THE OPPOSITE. HE SAYS THAT IF YOU BREAK THESE CONTRACTS, THEN WHAT ABOUT OTHER CONTRACTS AT OTHER COMPANIES? ARE YOU GOING TO BREAK THOSE? YOU SET A VERY DANGEROUS PRECEDENT. >> YES, BUT MY MAJOR MESSAGE IS THAT THESE EXECUTIVES OUGHT TO GIVE THIS BACK VOLUNTARILY. I UNDERSTAND THAT MR. ARTHUR LEVITT MAKES A STRONG POINT. THERE IS CONCERN ABOUT BREAKING CONTRACTS. PEOPLE HAVE TO HAVE FAITH AND TRUST IN THE CONTRACT THEIR ENTRY INTO. MY POINT IS THAT THESE EXECUTIVES ARE TOTALLY INSENSITIVE IN TERMS OF THE AMERICAN PEOPLE'S INVESTMENT IN THEIR COMPANY, TO PROP UP THEIR COMPANY, SO THAT THEY DO NOT IN FACT -- SO THEY DO NOT INFECT THE ENTIRE COUNTRY. THESE EXECUTIVES SHOULD VOLUNTARILY SAY THAT WE UNDERSTAND THE EFFECT ON THE AMERICAN PEOPLE. ...