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More questionable payments from AIG

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American International Group (NYSE: AIG) just can't get out of its own way. Seriously, if you want a blueprint of how not to spend "free" money from taxpayers, just read the media's coverage of the bank.

According to MarketWatch, the company is going to pay $450 million to employees of the unit that was basically responsible for the bank's collapse, you read that right.

It definitely seems that this decision is not resonating well across the nation's capital, as Larry Summers (economic advisor to the President) said that the payments are "outrageous." Democratic senator Barney Frank told Fox News that the government needs to look into whether or not these bonuses are "legally recoverable." Yet another Democrat, Elijah Cummings, wants AIG CEO Edward Liddy to resign.

In a letter to Treasury Secretary Geithner, Liddy said that AIG had "binding obligations" to pay the bonuses to the employees of the financial-products unit. These obligations were ones that the company could not legally rescind. Liddy even stated that he didn't like the arrangements and found "it distasteful and difficult to recommend to you that we must proceed with them."

These bonuses were promised to 400 employees of the unit before the federal bailout. The bonuses range from $1,000 to $6.5 million ... really. I know I sure would love a job where I can not do my job well and get a $6.5-million bonus, no matter what.

If my tax money is going to pay these bonuses, or any of the $1.2 billion in payments that AIG is scheduled to hand out -- I want to work for AIG. It would be easy, put me in a corner office (in the basement) with my red Swingline stapler and I won't bother anyone. I'll file papers, I'll type, I'll staple sets of paper together ... just make sure to give me that fat, legally bound $2 million (I'm not greedy) bonus, no matter how poorly I do.

And the government wonders why this bank bailout isn't popular? If news like this continues to come out, the AIG execs may find a group of taxpayers at their door with pitchforks and torches demanding their money back, who's with me?

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Last updated: November 25, 2009: 11:31 AM

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