UPDATE (at bottom): NY Attorney General subpoenas AIG
Obama coughed during his speech and joked, "Excuse me. I'm choked up with anger here."
Responding to a populist firestorm over the news that AIG planned to pay out millions in bonuses to many of the executives viewed to be responsible for the firm's near-collapse in 2008, President Obama announced he has directed Treasury Sec. Timothy Geithner to "pursue every legal avenue to block these bonuses."
Noting the substantial sums AIG has received from the federal government, Obama said late Monday morning Geithner should use that leverage in pursuing a block of the bonuses.
"This is a corporation that finds itself in financial distress due to recklessness and greed," said Obama. "Under these circumstances, itís hard to understand how derivative traders at AIG warranted any bonuses, much less $165 million in extra pay. How do they justify this outrage to the taxpayers who are keeping the company afloat?"
He added that Geithner is working "to resolve this matter with the new CEO, Edward Liddy, who came on board after the contracts that led to these bonuses were agreed to last year."
"This isnít just a matter of dollars and cents. Itís about our fundamental values.All across the country, there are people who work hard and meet their responsibilities every day, without the benefit of government bailouts or multi-million dollar bonuses. And all they ask is that everyone, from Main Street to Wall Street to Washington, play by the same rules," he added.
Barney Frank told NBC's Meredith Vieira that he want to consider taking action against some of the AIG executives receiving bonuses. "These people may have a right to their bonuses, they don't have a right to their jobs forever. The federal government is now an 80% owner. One of the things we can do to make sure this doesn't happen again," he said.
"We've got people who are so irresponsible. It does appear we're rewarding incompetence. Forget about the legal matter. These bonuses are going to people who screwed this thing up enormously, who made terrible decisions," said Frank.
If the bonus payments can't be stopped then Frank wants to consider firing some executives. "Since the federal government -- thanks to the Federal Reserve's use of the power under the 70-year-old statute -- now essentially owns the company, maybe it's time to fire some people. We can't keep them getting the bonuses, but we can keep some of them from continuing in their jobs," he said.
UPDATE: Cumo subpoenas AIG for executive bonus details
"New York Attorney General Andrew Cuomo has issued a subpoena to American International Group Inc. seeking a list with the names of executives receiving bonuses," reported Albany Business Review.
"'We had given AGI up to 4 o'clock today to provide the information on the latest round of bonuses that they paid out,' Cuomo said. 'Four o'clock has come and gone.'"
"During a conference call with reporters, Cuomo said the subpoena had been issued 'as we speak.'"
"In the letter to AIG's CEO Edward Liddy, Cuomo said he was disturbed to learn over the weekend of AIGís plans to pay millions of dollars to members of the Financial Products subsidiary through itís Financial Products Retention Plan."
This video is from MSNBC's News Live, broadcast Mar. 16, 2009.