Following front-page headlines Sunday in both The New York Times and The Washington Post that American International Group, which has received $170 billion in bailout funds, plans on paying out $165 million in bonuses to employees, Rep. Barney Frank threatened to fire those receiving bonuses during an appearance on NBC's Today show Monday morning .
"These people may have a right to their bonuses, but they don't have a right to their jobs forever," said Representative Frank, who chairs the House Financial Services Committee, adding that the federal government now owns a majority of the company.
Frank did a little fancy political footwork before his rant against the company, suggesting that Treasury secretary Timothy Geithner was "trying very hard" to rein in the bonuses and noting that the Federal Reserve Bank decided to put $80 billion into AIG "before Congress even passed the rescue plan."
After shielding Congress and the Obama administration from primary responsibility, Frank continued, "Clearly, not enough was done at the very beginning to put conditions on AIG. And people may have noticed we've now got complaints from some banks that did get some of the subsequent money we voted (for) that our conditions were too tough and they're going to quit the program. My answer is, 'Goodbye. Please leave quickly and send back the money.'"
AIG executives have argued that they are contractually bound to pay the bonuses. Frank said he wanted to research that allegation "very carefully," then continued, "But there's another point here. These people may have a right to their bonuses, but they don't have a right to their jobs forever. The federal government now is the 80% owner... And by the way, it does appear to me we're rewarding incompetence. Forget about the legal matter here for a second -- these bonuses are going to people who screwed this thing up enormously, who made terrible decisions...
"So since the federal government now ... essentially owns that company, maybe it's time to fire some people. We can't keep them from getting their bonuses, but we can keep some of them from continuing in their jobs..."
Later in the day, President Barack Obama took time during a White House press conference on small businesses to say that he has asked Sec. Geithner to "pursue every single legal avenue to block these bonuses and make the American taxpayers whole."
