AIG Bonuses

Floor Speech

AIG BONUSES -- (Senate - March 19, 2009)

Mrs. SHAHEEN. Madam President, I would like to applaud my colleague, Senator Whitehouse, for his comments, particularly around health care. I know all of us believe that is critical for us to address.

I rise to express my outrage that AIG has paid over $165 million in bonuses to executives at the company, after they received a $173 billion bailout in taxpayer funds. We all know the economic conditions we are facing are very difficult. Unemployment continues to climb around the country and in my home State of New Hampshire. Families are struggling to make ends meet. Existing home sales are at their lowest levels in more than a decade. Small businesses around the country and in New Hampshire are working hard just to make payroll, to buy inventory, and to keep their businesses viable. In fact, this morning I heard from a small businessman in New Hampshire, Mark Lane, who is the head of Coed Sportswear and Printed Matter, talk about the challenges he faces in this recession, trying to get access to credit to keep his business going.

Yet while small businesses and middle-class families are struggling to make it through these difficult times, the very people whose reckless decisionmaking helped put us in this precarious economic situation are rewarding themselves with bonuses paid for with taxpayer dollars. This is unconscionable.

We have been told nothing can be done about the bonuses to AIG employees because they are contractual commitments. Yesterday, we heard the CEO of AIG say he has asked the recipients of the bonuses to give the money back. I believe those employees should do that, and I hope they will. But we should make sure that when taxpayer money is used, we have done
everything possible to prevent the kind of excesses we have seen with AIG.

As a condition of providing financing to General Motors and Chrysler, the Treasury Department required the automakers to renegotiate their collective bargaining agreements with their workers. In order for their employers to get loans from the Treasury, autoworkers gave up cost-of-living increases to their wages and bonuses, among other benefits. It is our obligation, as we did with General Motors and Chrysler, to protect taxpayer dollars. That is why, in January of this year, I voted against releasing an additional $350 billion in TARP funding. I opposed the release of this funding because I believed we did not have adequate accounting of the money the United States had already spent in the bailout. At the time I said: We need legislation to enhance transparency and to enhance taxpayer protections before we release additional money.

Earlier this year, Senator Dorgan introduced the Taxpayer Protection Act, something I quickly signed on to as a cosponsor. This legislation is designed to limit executive compensation, to prohibit the kinds of bonuses companies such as AIG, which have received Federal economic assistance, can provide to their employees or their executives. Today we are reminded that the use of taxpayer money should be held to the highest standards of transparency and accountability.

I am hopeful this administration--and we have heard the President say he is committed to doing something about the situation at AIG, and we know this Senate is committed to doing something about the situation at AIG with their executive bonuses--and this body will take the appropriate action to recover the taxpayer dollars AIG has so recklessly spent on bonuses. I intend to do everything I can to support those efforts.

I yield the floor.

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