AIG, Other Insurers Among Firms to Pay Proposed $90 Billion Tax
Jan. 18, 2010 – President Barack Obama last week announced a plan to implement a federal tax on large financial firms with at least $50 billion in assets and who accepted federal funding to survive the recent financial crisis – although some who declined taxpayer dollars would pay, too.
Corporations responsible for paying the proposed tax would include the American International Group (AIG), the Bank of America, Citigroup, Goldman Sachs and JP Morgan Chase. The tax would be levied over a 10-year period beginning June 30 and accrue an estimated $90 billion over a decade.
President Obama calls the proposed tax the “financial crisis responsibility fee,” which is designed to recoup much of an estimated $117 billion U.S. taxpayers have lost through the federal Troubled Asset Relief Program (TARP), which is a $700 billion fund created in 2008 to relieve ailing corporations like AIG of toxic assets mostly tied to various mortgage markets and largely blamed for the global economic meltdown over the past year. Federal law requires the President to recoup any TARP program funding losses by 2013.
Obama says the proposed tax would recoup lost taxpayer dollars by making only those firms most responsible for the recent downturn and who were primary recipients of taxpayer dollars repay the funds instead of adding to the federal deficit. The tax would levy a 0.15 percent fee on corporate assets while exempting “high-quality capital,” such as common shares, and retained and disclosed corporate earnings. If approved by Congress and signed into law, the Internal Revenue Service would collect the fee over a 10-year period beginning June 30. Only those firms with assets topping $50 billion and who own federally insured depository institutions would be levied.
While AIG was among firms cited as being liable for the proposed federal tax, several other insurance companies also would qualify for the additional levy. Allstate, Ameriprise Financial, The Hartford Financial Services Group, Lincoln National, MetLife, the Principal Financial Group and Prudential Financial all would be eligible for the proposed tax based on each firm’s adjusted assets even though many declined federal assistance, according to a report issued by Credit Suisse on Friday.
Of insurers that accepted federal TARP funds, AIG could owe up to $389 million if the tax is levied. The Hartford would owe about $28.2 million and Lincoln National $29.4 million, according to Credit Suisse.
But firms that declined federal assistance would pay large amounts as well. MetLife would be assessed up to $97 million, Prudential about $85 million and Allstate some $34 million despite none of the insurers having accepted taxpayer assistance, according to Credit Suisse and Citigroup analysts.
AIG General Counsel Resigns Over Restricted Pay
Dec. 31, 2009 – The general counsel and vice chair for struggling insurer American International Group (AIG) has resigned due to pay restrictions imposed by President Barack Obama’s “pay czar.”
Anastasia Kelly, 60, this week resigned from AIG for “good reason” and will receive a $3.8 million severance package. Kelly joined the firm in 2006 as its general counsel regarding global legal compliance and regulatory matters. She became AIG’s vice chair in charge of legal, corporate affairs, communications and human resources earlier this year. Kelly recently hired a New York law firm to review her conduct at AIG and determine an appropriate amount in severance, according to a Bloomberg news report.
AIG officials also reported the resignation of Suzanne Fulsom, the firm’s chief compliance and regulatory officer.
The resignations come during the same week an unidentified AIG executive was reported to receive a bonus equal to nearly 10 times his annual salary after President Barack Obama’s “Pay Czar” recently approved the additional pay.
Officials for AIG and the U.S. Treasury Department cited privacy concerns when refusing to identify the executive, but “Pay Czar” Kenneth Feinberg recently approved the bonus pay after the executive recanted a prior resignation from the fiscally challenged insurance company. The executive will have his or her 2009 salary of $450,000 supplemented by long-term compensation package that includes $3.26 million in stock options and another $1 million in financial incentives.
Feinberg said the long-term compensation is comparable to those he earlier approved for AIG’s 25 top executives and is necessary to retain employees critical for helping the firm repay its massive debt to U.S. taxpayers. Feinberg earlier announced pay restrictions for the 100 highest-paid executives at AIG, including controversial retention pay bonuses for “critical” employees.
Calling the retention bonuses “legally binding contracts,” Feinberg said he would allow them for “particularly critical” executives and managers AIG officials have identified as important to the ailing corporation’s long-term success and, more importantly, it’s ability to repay its staggering debt to U.S. taxpayers.
AIG executives and managers not receiving retention payments are limited to base salaries of up to $500,000. Salaries must be comprised of 45 percent cash with the remaining amount paid in company stock that must be held for at least a year. Any stocks paid as “incentive” pay and not salary must be held for at least three years. The salary guidelines apply to 2009 but likely will be carried over for 2010, according to news reports.
‘Pay Czar’ Approves $4.3 Million Bonus for AIG Exec
Dec. 30, 2009 – An unidentified executive at struggling American International Group (AIG) will receive a bonus equal to nearly 10 times his annual salary after President Barack Obama’s “Pay Czar” recently approved the additional pay.
Officials for AIG and the U.S. Treasury Department cited privacy concerns when refusing to identify the executive, but “Pay Czar” Kenneth Feinberg recently approved the bonus pay after the executive recanted a prior resignation from the fiscally challenged insurance company. The executive will have his 2009 salary of $450,000 supplemented by long-term compensation package that includes $3.26 million in stock options and another $1 million in financial incentives.
Feinberg said the long-term compensation is comparable to those he earlier approved for AIG’s 25 top executives and is necessary to retain employees critical for helping the firm repay its massive debt to U.S. taxpayers. Feinberg earlier announced pay restrictions for the 100 highest-paid executives at AIG, including controversial retention pay bonuses for “critical” employees.
Calling the retention bonuses “legally binding contracts,” Feinberg said he would allow them for “particularly critical” executives and managers AIG officials have identified as important to the ailing corporation’s long-term success and, more importantly, it’s ability to repay its staggering debt to U.S. taxpayers.
AIG executives and managers not receiving retention payments are limited to base salaries of up to $500,000. Salaries must be comprised of 45 percent cash with the remaining amount paid in company stock that must be held for at least a year. Any stocks paid as “incentive” pay and not salary must be held for at least three years. The salary guidelines apply to 2009 but likely will be carried over for 2010, according to news reports.
The executive pay limitations imposed by Feinberg apply to all firms accepting taxpayer bailout funds through the federal government’s $700 billion Troubled Asset Relief Program (TARP). Others firms affected are Citigroup, General Motors and GMAC.
Obama appointed Feinberg to oversee executive pay at seven U.S. firms accepting taxpayer bailout funds. Feinberg in October reduced pay for AIG’s 25 highest-ranking executives by an average 57 percent. He later assessed pay scales for the next 75 highest-paid AIG employees, including the five executives who threatened to resign.
The threatened resignations were not the first at AIG over Feinberg’s limitations on executive pay. Barely a month after receiving approval for an executive compensation package valued at up to $10.5 million per year, AIG’s newest chief executive officer threatened to quit and later recanted over potential federal limitations on executive pay.
Robert H. Benmosche, AIG’s current chief executive and formerly the top executive at MetLife, in November threatened to resign his new position after Feinberg said he would limit executive compensation at corporations that accepted funds through the TARP program, which was created last year during the economic meltdown and designed to relieve ailing corporations of their toxic assets, such as mortgage-backed securities, which were dragging them down into bankruptcy.
Benmosche threatened to step down when the AIG chief executive informed the company’s board of directors he would resign from the position he accepted in August in light of executive compensation limitations recently announced by federal officials and after Feinberg had approved Benmosche’s $10.5 million pay package.
Benmosche reportedly cited potential problems retaining top executives with federally limited pay amounts when telling AIG’s board of directors he would resign last week, according to the Wall Street Journal, which cited anonymous sources. Benmosche allegedly clarified his comments later, telling board members he intends to stay on at AIG and telling employees he would “fight” on their behalf while continuing to work with Feinberg.
Senate Approves Unpopular Health Care Reform Bill, Tax Increases
Dec. 24, 2009 – With its first Christmas Eve vote in more than a century, U.S. Senate Democrats at 7 a.m. today voted strictly along party lines to approve their version of national health care reform along with some 17 tax increases on the middle class and others despite public opinion polls showing a majority of Americans oppose reform efforts.
The Senate voted 60-39 to approve the health care reform measure with 58 Democrats and two independent Senators voting in favor and 39 Republicans voting against. Republican Senator Jim Bunning of Kentucky was absent.
The measure requires all American citizens to purchase health insurance and creates regional health insurance exchanges where individuals can shop for health insurance coverage tailored to more specific needs. People earning too little to afford health insurance would receive federal subsidies to purchase coverage.
Some 17 new taxes have been proposed to pay for the estimated $849 billion cost of initiating the Senate plan over a 10-year period.
Among taxes proposed to pay for the Senate’s version of national health care reform is a “marriage penalty” levied on “families” earning at least $250,000 per year. Because the tax on individuals isn’t levied until their annual income levels reach at least $200,000 while married couples would be taxed on dual incomes of $250,000 or more, opponents have dubbed the proposed tax a “marriage penalty.” The “marriage penalty” would not be assessed unless both spouses earn at least $150,000 per year, but an unmarried couple living together and earning the same amount would not be taxed until their individual incomes reach at least $200,000 annually.
Other proposed taxes include levying a 40 percent tax on individuals with “generous” health care plans. The Senate plan also would increase the Medicare payroll tax on high-income employees.
Officials representing two labor unions, the A.F.L.-C.I.O. and the Service Employees International Union (SEIU), last week announced they do not support the Senate health care plan and instead favor the version approved in the House of Representatives, which includes a public health care option. Union officials said they will continue demanding a public health insurance option in the Senate version before endorsing the plan.
Several recent public opinion polls also indicate a majority of those surveyed oppose the reform measures. A poll conducted from Dec. 15 – Dec. 20 by Quinnipiac indicates 53 percent oppose reform efforts versus only 36 percent supporting. The most recent polling by CNN shows 56 percent opposed and 42 percent in favor, and Rasmussen shows 55 percent opposed versus 41 percent supporting health care reform efforts.
Because the Senate’s version of health care reform differs greatly from the version approved by the House of Representatives, a conference committee comprised of members of both chambers will have to work out a compromise plan. President Barack Obama has said he wants to sign a final bill before delivering the President’s annual State of the Union Address in January.
National Flood Insurance Program to Expire; Millions of Homes Affected
Dec. 16, 2009 – As federal lawmakers continue grappling over proposed health care reform measures that have been watered down and wouldn’t take effect for years, a matter with immediate impact on more than 5 million U.S. families continues being pushed aside.
The National Flood Insurance Program is scheduled to expire on Dec. 18, potentially leaving more than 5.5 million U.S. homes in flood-prone areas without flood insurance protection. Federal lawmakers have balked several times this year at enacting long-term changes to the program, instead twice opting to extend it for months at a time.
And federal lawmakers are expected to extend the program without changes once again.
The National Flood Insurance Program is the insurer of last resort in areas where private insurance companies deem it too risky to provide typical flood insurance protection. The federal program covers homes located across America in high-risk flood areas.
The flood insurance program’s expiration date already had been extended twice this year to give members of the U.S. House of Representatives and Senate time to work out differences in the program’s direction. House members are demanding the program be expanded to provide insurance protection against wind damage, according to Rep. Barney Frank (D-Mass.), chairman of the House Financial Services Committee.
The National Flood Insurance Program initially would have expired at 11:59 p.m. on March 6, but Congress passed continuing resolutions temporarily extending funding for federal programs under an omnibus bill while legislators hammer out a final compromise. The recent passage of the omnibus funding measure ensured a temporary extension of the National Flood Insurance Program while additional program reform is debated, but federal lawmakers have been sidetracked while debating proposed national health care reform measures that won’t take effect for several years.
President Barack Obama made health care reform a top domestic priority, but disagreement among Democratic lawmakers and unified opposition among Republicans have slowed reform efforts. In the U.S. Senate, Majority Leader Harry Reid (D-Nevada) cannot secure the 60 votes necessary to advance a legislative package and now has a watered-down package that Democrats in the House of Representatives say doesn’t do enough to reform the nation’s $2.5 trillion-a-year health care industry.
But while federal lawmakers continue battling over health care measures not scheduled to take effect for years, millions of U.S. families could lose important flood insurance protections for their homes and other properties. If the flood insurance program expires, insurance agents and brokers cannot write, renew or endorse National Flood Insurance Program policies.
Obama Angles for Health Reform Votes; Medicare Expansion Likely Out
Dec. 15, 2009 – A proposed expansion of the federal Medicare health program likely will be nixed as President Barack Obama and U.S. Senate Democrats struggle to find the 60 votes needed to pass national health care reform legislation being debated.
The President today held a closed-door meeting with Senate Democrats to try to work out a compromise in order to get the President’s top domestic priority approved during a time when public opinion polls show his approval ratings continue to fall. The latest Rasmussen Reports poll indicated more people surveyed, 53 percent, disapprove the job done so far by President Obama versus 44 percent indicating their approval.
Already divided over the possible creation of a public health care plan, Senate Democrats were divided on a proposed expansion of the federal Medicare program. Some Senators last week proposed lowering the eligibility age from 65 to 55 for people choosing to “buy in” early to participate in the federal health care program for the elderly.
Senator Joe Lieberman, an independent from Connecticut and former running mate of Democratic Presidential nominee John Kerry in 2004, is among Senators whose vote is needed to approve any health care reform measures. But Lieberman has threatened to filibuster any measures creating a public health plan or expanding Medicare.
Without Lieberman, Senate Democrats do not have the votes necessary to pass legislation or end a filibuster. Other Senators, such as Democrat Ben Nelson of Nebraska, also have threatened to vote against health care reform. Nelson earlier introduced an amendment restricting federal funding of abortion procedures. The Senate defeated the amendment on a 55-45 vote and placed Nelson in a position of opposing a measure President Obama and most Democrat lawmakers badly want passed.
President Obama today said there is general agreement on health care reform, but Democrats apparently have not secured the 60 votes necessary to advance a health care reform measure. After joining other Democratic U.S. Senators in meeting with the President today, Sen. Dick Durbin (D–Illinois), said expanding Medicare likely would not emerge as part of Senate’s health care reform efforts.
Although Medicare expansion likely is out, several Senators have said a public health insurance plan administered by the government likely would be part of Senate reform efforts. The proposed plan would utilize private health insurance companies operating on a non-profit basis and regulated by the federal Office of Personnel Management, which administers the health insurance plans for Congress and federal employees.
Republicans remain united in their opposition to the proposals, citing some $500 billion in proposed cuts to Medicare funding, $400 billion in new taxes and increased health insurance premiums for American families among reasons for their opposition. Senate Democrats are trying to get their version of health care reform passed by the end of the year.
‘Pay Czar’ Okays AIG Retention Bonuses, Limits Executive Pay
Dec. 14, 2009 – Having already limited pay for the top 25 executives at taxpayer-rescued insurer American International Group (AIG), President Barack Obama’s “Pay Czar,” Kenneth Feinberg, recently announced pay restrictions for the next 75 highest-paid executives but also approved controversial retention pay bonuses for “critical” employees.
Calling the retention bonuses “legally binding contracts,” Feinberg said he will allow them for “particularly critical” executives and managers AIG officials have identified as important to the ailing corporation’s long-term success and, more importantly, it’s ability to repay its staggering debt to U.S. taxpayers.
AIG executives and managers not receiving retention payments are limited to base salaries of up to $500,000. Salaries must be comprised of 45 percent cash with the remaining amount paid in company stock that must be held for at least a year. Any stocks paid as “incentive” pay and not salary must be held for at least three years. The salary guidelines apply to 2009 but likely will be carried over for 2010, according to news reports.
The executive pay limitations imposed by Feinberg apply to all firms accepting taxpayer bailout funds through the federal government’s $700 billion Troubled Asset Relief Program (TARP). Others firms affected are Citigroup, General Motors and GMAC.
Obama appointed Feinberg to oversee executive pay at seven U.S. firms accepting taxpayer bailout funds. Feinberg in October reduced pay for AIG’s 13 highest-ranking executives by an average 57 percent. He later assessed pay scales for the next 75 highest-paid AIG employees, including the five executives who threatened to resign.
The threatened resignations were not the first at AIG over Feinberg’s limitations on executive pay. Barely a month after receiving approval for an executive compensation package valued at up to $10.5 million per year, AIG’s newest chief executive officer last month threatened to quit and later recanted over potential federal limitations on executive pay.
Robert H. Benmosche, AIG’s current chief executive and formerly the top executive at MetLife, reportedly threatened to resign his new position after Feinberg said he would limit executive compensation at corporations that accepted funds through the TARP program, which was created last year during the economic meltdown and designed to relieve ailing corporations of their toxic assets, such as mortgage-backed securities, which were dragging them down into bankruptcy.
Benmosche threatened to step down when the AIG chief executive informed the company’s board of directors he would resign from the position he accepted in August in light of executive compensation limitations recently announced by federal officials and after Feinberg had approved Benmosche’s $10.5 million pay package.
Benmosche reportedly cited potential problems retaining top executives with federally limited pay amounts when telling AIG’s board of directors he would resign last week, according to the Wall Street Journal, which cited anonymous sources. Benmosche allegedly clarified his comments later, telling board members he intends to stay on at AIG and telling employees he would “fight” on their behalf while continuing to work with Feinberg.
Feinberg in October ordered an average 50 percent pay cut for the top 25 executives at AIG and six other corporations that accepted taxpayer funds through the federal TARP program. Although Feinberg’s decision only applies to the remainder of 2009, executives at affected companies anticipate he will base 2010 compensation levels on the same criteria.
Proponents say the scaled-back compensation amounts are justified for firms that would be bankrupt but for taxpayer intervention. But opponents say the reduced pay levels only punish people not responsible for current company woes and make it harder for struggling firms to get back on their feet and retain critical staff capable of finding jobs elsewhere – as well as make it more difficult for firms to repay their respective debts to U.S. taxpayers.
U.S. Senate Plans Saturday Night Vote on Health Care Debate
Nov. 20, 2009 – The U.S. Senate is scheduled to hold a rare Saturday night vote on whether or not to schedule debate on the Senate’s proposed national health overhaul plan seeking to expand health care coverage to 31 million people and levy at least 17 new taxes to cover the plan’s estimated $849 billion price tag over 10 years.
Although the plan would not take effect until 2014, Senate leaders want to schedule debate to begin Nov. 30. The 2,074-page overhaul of the $2.5 trillion per-year U.S. health care system would start a year later and cost an estimated $151 billion less than a version proposed by the U.S. House of Representatives. The House version would begin in 2013 with an estimated cost of more than $1 trillion over 10 years to expand coverage to an estimated 36 million people, according to the non-partisan federal Office of Management and Budget.
Among taxes proposed to pay for the Senate version of national health care reform is a “marriage penalty” levied on “families” earning at least $250,000 per year. Because the tax on individuals isn’t levied until their annual income levels reach at least $200,000 while married couples would be taxed on dual incomes of $250,000 or more, opponents have dubbed the proposed tax a “marriage penalty.” The “marriage penalty” would not be assessed unless both spouses earn at least $150,000 per year, but an unmarried couple living together and earning the same amount would not be taxed until their individual incomes reach at least $200,000 annually.
Other proposed taxes include a 5 percent tax on elective plastic surgeries – popularly called the “Botox tax” – and levying a 40 percent tax on individuals with “generous” health care plans. Whether such a tax would be levied only on benefits received as an employee or on any “generous” health care plan – whether purchased individually or through a group plan – is yet to be determined in the Senate’s more than 2,000-page version of national health care reform. The Senate plan also would increase the Medicare payroll tax on high-income employees.
The Senate’s proposal requires all American citizens purchase health insurance and creates regional insurance exchanges where individuals can shop for health insurance coverage tailored to more specific needs. People earning too little to afford health insurance would receive federal subsidies to purchase coverage.
The Senate bill also creates a federal health insurance option in which state legislatures would choose to participate and prevent health insurance companies from refusing coverage to individuals with pre-existing health problems.
Senate Democrats need 60 votes to advance the measure to a floor debate. But independent Senator Joe Lieberman of Connecticut – who sits with the Democratic Caucus – has said he would oppose the Senate version even though he likely would vote to allow the floor debate.
Lieberman, who was Democrat John Kerry’s running mate during the 2004 presidential election, opposes a public option as provided in the Senate bill and earlier announced he would filibuster the measure unless amended to remove the public plan proposed by Senate Majority Leader Harry Reid (D-Nevada). Lieberman says a public option would drive up costs for people with health insurance. Reid contends states would have the option of whether or not to participate in the proposed federal health care option.
Because Democrats would need 60 votes to quell a potential filibuster, at least one Republican would have to vote to end any filibuster initiated by Lieberman. But no Republicans have voiced support for the plan proposed by Reid and are unified in their opposition thus far.
Any differences between the House and Senate bills would have to be worked out and approved by both chambers before President Barack Obama could sign a health care reform package into law.
AIG’s Top Executive Threatens to Quit, Recants Over Executive Pay
Nov. 16, 2009 — Barely a month after receiving approval for an executive compensation package valued at up to $10.5 million per year, the newest chief executive officer of taxpayer-rescued American International Group (AIG) last week threatened to quit and later recanted over potential federal limitations on executive pay at firms rescued by U.S. taxpayers.
Robert H. Benmosche, AIG’s current chief executive and formerly the top executive at MetLife, last week reportedly threatened to resign his new position after President Barack Obama’s “Pay Czar,” Kenneth Feinberg, said he would limit executive compensation at corporations that accepted funds through the $700 billion federal Troubled Asset Relief Program (TARP), which was created last year during the economic meltdown and designed to relieve ailing corporations of their toxic assets, such as mortgage-backed securities, which were dragging them down into bankruptcy.
The Wall Street Journal last week reported Benmosche might step down after the AIG chief executive informed AIG’s board of directors he would resign from the position he accepted in August in light of executive compensation limitations recently announced by federal officials and after Feinberg had approved Benmosche’s $10.5 million pay package.
Benmosche reportedly cited potential problems retaining top executives with federally limited pay amounts when telling AIG’s board of directors he would resign last week, according to the Wall Street Journal, which cited anonymous sources. Benmosche allegedly clarified his comments later, telling board members he intends to stay on at AIG and telling employees he would “fight” on their behalf while continuing to work with Feinberg.
Feinberg in October ordered an average 50 percent pay cut for the top 25 executives at AIG and six other corporations that accepted taxpayer funds through the federal TARP program. Another decision is coming regarding the next 75-highest paid positions at the same seven firms.
Although Feinberg’s decision only applies to the remainder of 2009, executives at affected companies anticipate he will base 2010 compensation levels on the same criteria. Proponents say the scaled-back compensation amounts are justified for firms that would be bankrupt but for taxpayer intervention. But opponents say the reduced pay levels only punish people not responsible for current company woes and make it harder for struggling firms to get back on their feet and retain critical staff capable of finding jobs elsewhere – as well as make it more difficult for firms to repay their respective debts to U.S. taxpayers.
AIG officials last year accepted what has become a nearly $183 billion, taxpayer-funded federal rescue package after what formerly was the world’s largest insurer became its most indebted on bad bets tied to various mortgage markets. Federal officials approved the bailout funds for AIG and other firms to stave off what they claimed would be a devastating domino effect on global financial markets.
Obama’s ‘Pay Czar’ Slashes Executive Pay at AIG, Others
Oct. 23, 2009 – Only weeks after approving an up to $10.5 million compensation package for the newest chief executive at taxpayer-rescued American International Group (AIG), President Barack Obama’s “pay czar,” Kenneth Feinberg, yesterday announced he was slashing executive pay by up to 90 percent for top employees at AIG and other firms bailed out by U.S. taxpayers.
The move means AIG executives will have their 2009 pay reduced by up to 90 percent from a year ago with a 58 percent reduction the average for the top 25 earners at the ailing insurance giant. Feinberg did not indicate whether the decision would affect AIG’s newest chief executive, Robert Benmosche, but he set a $500,000 ceiling for executive pay, unless a higher amount was deserved for “good cause.” Most executive compensation is to be paid in company stock rather than cash.
Other firms affected by Feinberg’s decision include Bank of America, Chrysler, Chrysler Financial, Citigroup, GMAC and General Motors.
The move comes about six months after President Obama found himself in hot water over executive bonus pay at AIG. After accepting a taxpayer-funded bailout valued at up to $182.5 billion, AIG intended to pay its executives hundreds of millions of dollars in “retention” pay designed to retain key employees at firms being sold to repay the insurer’s massive debt to U.S. taxpayers. U.S. Senator Chris Dodd (D-Connecticut) had amended the unread and non-debated $787 billion federal stimulus to require the bonuses be paid.
When a public furor arose over the bonus pay, Dodd and Obama initially claimed they knew nothing of the matter. But when reporters pointed out Dodd sponsored the amendment requiring the bonus pay be distributed, Dodd said he sponsored it only after being requested to do so by Obama’s administration. Compounding the problem, Dodd and Obama were among the largest recipients of campaign contributions from AIG employees, and the appearance of political corruption caused the President to demand the bonus pay be taxed heavily.
In the wake of the subsequent public outrage, Obama appointed Feinberg as the federal “compensation czar” in charge of reviewing executive bonus payments at companies accepting federal assistance. AIG earlier paid out $165 million in retention bonus payments to employees at subsidiary AIG Financial Products, which is responsible for crippling its parent company through exposure to risky credit default swaps tied to various mortgage markets.
When Democrats were preparing for their successful run for control of the U.S. Congress during the 2006 mid-term elections, Dodd sought campaign donations from executives and managers at AIG Financial Products. A top executive at a Connecticut-based unit of AIG Financial Products in 2006 told colleagues Dodd needed donations and instructed colleagues to donate and provide proof of their donations to company officials, according to the Washington Times report.
A Nov. 17, 2006, e-mail message sent to workers from AIG Financial Products Chief Executive Officer Joseph Cassano said Dodd was to become chairman of the Senate Banking, Housing and Urban Affairs Committee, which has federal oversight over the insurance and finance industries.
“Given his seniority in the Senate, he will also play a key role in the Democratic Majority’s leadership,” Cassano said in the e-mail message obtained by The Washington Times. “As he considers running for president in 2008, Senator Dodd has asked us for our support with his reelection campaign and we have offered to be supportive.”
Dodd’s campaign soon after collected more than $160,000 from AIG Financial Products employees at its Connecticut facility just before the Senator became committee chairman in 2007. Dodd later transferred the funds to his failed 2008 presidential campaign.
AIG employees and their spouses donated $121,378 to Dodd’s 2006 political campaign, $224,278 to his 2008 effort and $183,700 so far for Dodd’s 2010 campaign cycle, according to opensecrets.org. Cassano donated $7,118, according to the Center for Responsive Politics.