Elijah Cummings Knew About $1 Billion in AIG Bonuses for “Months” — Why Didn’t Timothy Geithner?
I chatted with Elijah Cummings briefly yesterday in the hallway at the AIG hearings. He had been the first member in the hearing room, and as others drifted in and out, he was there almost the entire time. I followed him out shortly after Kanjorski dropped the bomb about having known about the AIG bonuses over a month ago, and Liddy confirmed that Ben Bernanke both knew about the bonuses and had approved them. I asked him if Mr. Kanjorski had made him or members of the subcommittee aware of the bonuses at the time.
"I’m not on the subcommittee, I’m a guest today" he said.
I went back and sure enough, he’s not on the subcommittee — he’s not even on the Financial Services committee. Cummings is House Oversight, and I assumed he must have a burning question to ask. As it turns out, he did:
The media has been focused on the $165 million installment of the $450 million retention program for AIG Financial Products Division. However, for months, you and I have been going back and forth overall about the one billion dollars retention program that covers thousands of employees throughout AIG.
Then, as Marcy notes this morning, he blows holes in Liddy’s story that he was only given the "distasteful" task of paying out contracts he would never have approved. From Liddy’s Dec. 5 letter to Cummings:
On September 18, 2008 AIG’s compensation committee of the Board of Directors approved retention payments for 168 employees.
Cummings says that he met with Liddy on January 15, and at that time Liddy admitted that under his tenure, he had expanded the retention bonus program to cover 2100 employees. Cummings asked how many retention bonuses Liddy had approved, and he estimated 4500 to 4700. However, that number didn’t include bonuses agreed to by managers of other divisions. He asked how much money the company had paid in bonuses in 2008 and how much was scheduled to be paid out in 2009, and Liddy said he didn’t know.
Let’s underscore that — Edward Liddy comes to a subcommittee hearing and answers questions by every single member of the subcommittee for hours, called expressly to answer questions about the AIG bonus program, and he’s not prepared to answer a question about how much money they’ve paid out, or how much they will pay out. It is at the very end of the day when Cummings finally gets to ask his questions, and I admit I had to take off and interview Senator Merkley so I wasn’t even there at the time, but as far as I could tell it was the first time that day that anybody had asked that question.
I wrote yesterday about how thoroughly useless and uninformed the committee members and their faux rage were — well, at least those who weren’t giving Liddy a foot massage for being a great patriot working in the service of this country.
But the bottom line is — Massimo Calabresi’s "scoop" in Time Magazine is a sham. The story floated by "an administration official" to Jeff Mason of Reuters, that Geithner didn’t know anything until March 10 was a crock too. (Congratulations Jeff, you’re a reporter who willingly prints lies unless you expose your "anonymous" source). Now Calebresi says that there’s a rift between the Treasury and the Fed, and the Fed is letting us have the goods —
Geithner Treasury knew about the bonuses on February 28 (but nobody told poor hapless Geithner).
How convenient. Geithner was lobbying heavily at the time of the stimulus bill conference for the insertion of language that made sure the AIG bonuses got paid out in full, on February 11. Which means that if he was doing so with knowledge of the existence of the bonus contracts, he was trying to make sure they got paid. The "outrage" that caused him to reduce the total by $4.8 million before he approved them was a less than Oscar-worthy performance.
But voila! Now we hear that
Geithner Treasury KNEW NOTHING until February 28, which puts him outside the danger zone. Did Calabresi not have a calendar, or did that not seem worthy of mention?
Nor did he include the fact that Elijah Cummings says he knew about the bonuses for "months." Of course, neither do David Cho and Michael D. Shear of the Washington Post, who print the official administration-dictated pushback:
Treasury Secretary Timothy F. Geithner, a central figure in the decision to bail out AIG last fall as president of the Federal Reserve Bank of New York, said in an interview yesterday that he had not been aware of the size of the bonuses and the timing of the payments.
"I was stunned when I learned how bad this was on Tuesday [March 10]," Geithner said. "I shouldn’t have been in that position, but it’s my responsibility and I accept that."
It’s all just crap, of course. Elijah Cummings knew the details, Paul Kanjorski knew the details, Ben Bernanke knew (and approved) the details. Geithner is either a complete idiot who doesn’t know what’s going on or he’s lying through his teeth.
And no journalist should be writing about this stuff unless they’re willing to sit there and listen to what was said at these hearings. You could fire a cannon through the holes in the story of Calabresi, Cho and Shear. The quality of journalism on display here is truly shameful.