On the AIG Debacle from an Insider
I will be paraphrasing and placing those elements from a family friend who was an executive at AIG in quotes.
Thank you for contactingn me about the current AIG crisis. I am very worried about my wife and the pressure that she has been under in regards to this situation.
I have not been with AIG since October, but I did receive a retention plan payment (way under the $ 1 million payment though). The vast majority of people working at AIG-Financial Products Division had nothing to do with the transactions that are causing so much trouble. 10 employees out 400 executed and priced those transactions. The rest of us at the company were pretty much clueless in regards to how these products were underwritten. The AIG employees were told that the underwritten securities contained no risk. However, the current AIG-FP employees (those who account for the 390 who had nothing to do with the underwritings) are enduring the most anger from the public.
I can understand why there is anger, however, AIG-FP did not cause the ruin of AIG, that distinction belongs to AIG itself through its security lending program that has lost billion more than AIG-FP. Why is that not being discussed? because it does not fit the class warfare discussion that is going on now. Its not conducive to the “crisis” to say that senior management at AIG was irresponsible and incompetent its much easier to say that and entire division of AIG (AIG-FP) and those greedy employees and credit derivatives destroyed the company.
Now the History:
AIG goes to AIG-FP employees in late March of 2008 (not March of 2009 – these contracts were signed way in advance) with a retention plan because the head of FP is fired for the credit derivatives that are causing so many problems. The employees did not ask for the retention plans and most employees were not very happy about signing them either.
AIG gives us two weeks to decide whether we want to sign these agreements. As an AIG employee, if you did not sign the agreement you weren’t considered a “team-player” and your days at the office were numbered. Yes, we benefited by signing the retention agreements, but the offset is that AIG wants to make sure that its employees do not walk out the door with the specific knowledge they have to deal with these products and the problems at hand. Most of the employees sign the agreements, and most employees work their butts off figuring out how best to get us out of the mess. The problem is that we did not know how bad the mess was and the economy continues to unravel, which exascerbates the problems.
Milk Dodd’s Wife a Former Director of Bermuda-Based IPC Holdings, an AIG Controlled Company
Hmm… The Corruptocrats keep getting in trouble and the stories keep getting juicier. Who will Dodd try to throw under the bus for this little tidbit? I can’t wait to see how he tries to spin this one.
No wonder Senator Christopher Dodd (D-Conn) went wobbly last week when asked about his February amendment ratifying hundreds of millions of dollars in bonuses to executives at insurance giant AIG. Dodd has been one of the company’s favorite recipients of campaign contributions. But it turns out that Senator Dodd’s wife has also benefited from past connections to AIG as well.
From 2001-2004, Jackie Clegg Dodd served as an “outside” director of IPC Holdings, Ltd., a Bermuda-based company controlled by AIG. IPC, which provides property casualty catastrophe insurance coverage, was formed in 1993 and currently has a market cap of $1.4 billion and trades on the NASDAQ under the ticker symbol IPCR. In 2001, in addition to a public offering of 15 million shares of stock that raised $380 million, IPC raised more than $109 million through a simultaneous private placement sale of 5.6 million shares of stock to AIG – giving AIG a 20% stake in IPC. (AIG sold its 13.397 million shares in IPC in August, 2006.)
Clegg was compensated for her duties to the company, which was managed by a subsidiary of AIG. In 2003, according to a proxy statement, Clegg received $12,000 per year and an additional $1,000 for each Directors’ and committee meeting she attended. Clegg served on the Audit and Investment committees during her final year on the board.
IPC paid millions each year to other AIG-related companies for administrative and other services. Clegg was a diligent director. In 2003, the proxy statement report, she attended more than 75% of board and committee meetings. This while she served as the managing partner of Clegg International Consultants, LLC, which she created in 2001, the year she joined the board of IPC. (See Dodd’s public financial disclosure reports with the Senate from 2001-2004 here.)
Dodd is likely more familiar with the complicated workings of AIG than he was letting on last week. This week may provide him with another opportunity to refresh his recollections.
Move over and make some room on that couch! Time to grab me a handful of popcorn – you can’t make this stuff up!
More Smoke And Mirrors
Will Geithner ever take full responsiblity for his part in this AIG fiasco?
The French Revolution Part Duex
AIG’s Financial Products Division is located in Wilton, Connecticut, of Fairfield County. Fairfield County has always ranked as one of the top 3-5 richest counties in the nation. In fact I grew up in Fairfield, CT and spent the first 18 years of my life there. Taxes and snooty, elitist attitudes lead me further south. The chip on my shoulder in regards to CT, still does not make me feel ok with what is happening in this country and to these AIG executives.
The Democrats want nothing more than mob mentality to use as another manufactured crisis or a smoke screen, as some have been calling it, to pass other big legislative measures under the radar. If the public was made aware of what the Democrats were really attempting to do, they would be in an uproar over the unconstitutional and costly bills being passed.
The French Revolution started much the same way – let’s take a look at one major parallel:
There were also social and political factors, many of which involved resentments and aspirations given focus by the rise of Enlightenment ideals, which included resentment of royal absolutism, resentment by the ambitious professional and mercantile classes towards noble privileges and dominance in public life, many of whom were familiar with the lives of their peers in commercial cities in the Netherlands and Great Britain, resentment by peasants, wage-earners, and the bourgeoisie toward the traditional seigneurial privileges possessed by nobles, resentment of clerical advantage (anti-clericalism) and aspirations for freedom of religion, and resentment of aristocratic bishops by the poorer rural clergy, continued hatred for Catholic control and influence on institutions of all kinds, by the large Protestant minorities, aspirations for liberty and (especially as the Revolution progressed) republicanism, and anger toward the King for firing Jacques Necker and A.R.J. Turgot (among other financial advisors), who were popularly seen as representatives of the people.
Finally, perhaps above all, was the almost total failure of Louis XVI and his advisers to deal effectively with any of these problems.
Could we be experiencing the creation of the same mentality and attitudes? Our sitting president is inept and cannot make a decision, besides his horrible NCAA picks. The government is also inciting rage and chaos on purpose to play at class warfare to distract and take the attention off of themselves, their policies, and their own corruption.
We now havea lynch mob/pitch fork mentality against rich executives who gave out valid retention bonuses to keep people on board until all of AIG’s mess was resolved – these bonuses were allowed by little Timmy Geithner during the architecture of the first TARP as well as Chris Dodd and Obama in the American Recovery Act (The Porkulus). These were private contracts that were legal and were done before the FED gave money to AIG to bail them out.
Some AIG executives are fearing for their lives and the safety of their families since they are receiving death threats. Some employees are too afraid to show up at work and others are being publicly harassed by groups, organizations and even neighbors in the area.
Here are some quotes from the International Herald Tribune:
NEW YORK:An A.I.G. executive who had been nicknamed ‘‘Jackpot Jimmy’’ by a New York tabloid walked up the driveway toward his bay-windowed house in Fairfield, Connecticut, on Thursday. ‘‘How do I feel?’’ said the executive, James Haas, repeating the question he had just been asked. ‘‘I feel horrible. This has been a complete invasion of privacy.’’
Mr. Haas walked on, his pink shirt a burst of color on a slate-gray afternoon. The words came haltingly. ‘‘You have to understand,’’ he said, ‘‘there are kids involved. There have been death threats. …’’ His voice trailed off. It looked as if he were fighting back tears.
