AIG Bonus Debacle Threatens to Derail Obama Agenda

Posted by Bill Dupray on Mar 17 2009 Filed under Politics. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry

Didn’t we hear about how the Obama Administration was going to watch carefully to be sure not a penny of the stimulus money was wasted?

From the U.K. Times.

President Obama has announced the creation of a new website which he says will enable the public to monitor how effectively the US state spends and distributes his proposed $825bn stimulus package.

The president said the site, www.recovery.gov, would be part of his plan to create a more transparent administration.

Visitors to the site today see a message asking them to, “Check back after the passage of the American Recovery and Reinvestment Act to see how and where your tax dollars are spent“. . . .

“An oversight board will routinely update this site as part of an unprecedented effort to root out waste, inefficiency and unnecessary spending in our government.”

But the President said he hoped the American public would be convinced that his administration would be accountable for one of the largest spending programmes in US history.

So when the story broke yesterday about AIG’s blowing $165 million in taxpayer stimulus money on bonuses, I immediately thought of Obama’s crack team over at recovery.org and knew they would be all over this “waste, inefficiency, and unnecessary spending.” After all, this administration is accountable, or whatever.

So I took the president’s advice to “check back” with recovery.gov, and it turns out nobody over there has ever heard of AIG. Indeed, here is the result of a site-wide search for the term this morning.

The Washington Post thinks this AIG debacle might take a chunk out of Obama. Which is only just and fair. He asked us to hold him accountable right?

President Obama’s apparent inability to block executive bonuses at insurance giant AIG has dealt a sharp blow to his young administration and is threatening to derail both public and congressional support for his ambitious political agenda.

Politicians in both parties flocked to express outrage over $165 million in bonuses paid out to executives at the company, demanding answers from the president and swamping yesterday’s rollout of his efforts to spark lending to small businesses.

The populist anger at the executives who ran their firms into the ground is increasingly blowing back on Obama, whom aides yesterday described as having little recourse in the face of legal contracts that guaranteed those bonuses.

Little recourse? How about telling those guys at AIG something crazy like, “you can’t use bailout money to pay bonuses.” If AIG had the contractually required $165 million just kicking around in the company coffers, they can use that. But if they had that kind of money lying around, maybe they didn’t need the bailout in the first place.

But don’t worry, Obama and recovery.gov are watching out for us.

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