WASHINGTON — Tennessee and Georgia lawmakers were universal in their outrage over the $165 million in bonuses handed out by bailed-out insurer AIG, but they had different ideas on how to handle the situation.
While the House this past week passed legislation that would tax 90 percent of those bonuses paid to employees with family incomes above $250,000, Sen. Lamar Alexander, R-Tenn., said he would prefer an investigation by into whether the bonuses can be legally withheld.
The Justice Department should look into “whether there was fraud in any of these employment contracts, particularly in the London-based products division, which is a small group who almost singlehandedly brought the collapse of one of the most respected insurance agencies in the world,” he said.
“If there was fraud, the contracts can be abrogated and the bonuses won’t be paid,” he said.
DEAL PROTESTS RETROACTIVE AIG TAXING
Rep. Nathan Deal, R-Ga., said the House-passed bill, which he voted against, is of dubious constitutionality.
“I felt a better way to do it, and the constitutional way to do it, is to pass another piece of legislation that would say, to get further government funding, you will make sure we get back all this money,” he said. “That would create the proper leverage on them.”
DAVIS APPLAUDS OBAMA’S INTENT TO BLOCK BONUSES
Rep. Lincoln Davis, D-Tenn., called AIG “an American embarrassment of epic proportions.”
In a letter to Treasury Secretary Timonty Geithner, Rep. Davis and 94 Democratic colleagues said AIG “shamelessly lined up for a $170 billion bailout ... to cover up its own incompetence and irresponsible business practices” and urged the Justice Department to suspend the bonus payments until AIG’s legal standing is resolved.
“We are pleased to hear that President Obama intends to block the AIG bonuses and hope he will use any vehicle necessary to protect the American taxpayers’ interest,” the lawmakers wrote. “Our constituents deserve nothing less.”
ISAKSON PROPOSES INVESTIGATORY COMMISSION
Sen. Johnny Isakson, R-Ga., called for the creation of a bipartisan “Financial Markets Commission” to investigate the credit crisis and banking collapse and report any law-breakers.
“We were all reminded ... when word of the AIG bonus payouts hit the news of the frustration the American people have with the financial difficulties this nation is experiencing,” he said. “We can put in the transparency necessary to prevent it from happening in the future, and we can restore the confidence of the American people.”
Sen. Isakson has introduced a bill, along with Sen. Kent Conrad, D-N.D., to create such a commission that would have one year to investigate the circumstances that led to the financial crisis and report recommendations on regulatory changes.
The panel also would have the authority to refer to the U.S. attorney general or state attorneys general any evidence that institutions or individuals may have broken the law.
Compiled by Washington correspondent Herman Wang
E-mail Herman Wang at hwang@timesfreepress.com
