“A glimpse into the cesspool”: Robert Scheer on AIG Bonuses, the “Backdoor Bailout”, and Why Obama Should Fire Geithner, Summers (with a/v)

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Appearing on Capital Hill, AIG CEO Edward Liddy was repeatedly questioned over why the failed insurance giant is paying out over $165 million dollars in bonuses after it received a $170 billion dollar taxpayer bailout. While the Obama administration is expressing outrage, more details have come to light indicating that some officials have known about the bonuses for months. And meanwhile little attention has been paid to what might be a bigger scandal: AIG’s funneling of tens of billions of dollars in taxpayer bailout money to other banks.

We speak to veteran journalist and Truthdig editor Robert Scheer, author of the forthcoming “The Great American Stickup: Greedy Bankers and the Politicians Who Love Them.”
The CEO of AIG, Edward Liddy, testified on Capitol Hill Wednesday and was repeatedly questioned over why the failed insurance giant is paying out over $165 million dollars in bonuses after it received a $170 billion dollar taxpayer bailout. While President Obama and other officials are expressing outrage over the bonuses, more details have come to light indicating that some officials have known about the bonuses for months.

During an exchange with Congressman Paul Kanjorski of Pennsylvania, Liddy revealed the Federal Reserve had directly approved the AIG bonuses. During the hearing, AIG CEO Edward Liddy said he had already asked a few hundred AIG executives and employees to give back at least half of the extra pay but he refused to give details on who was keeping their bonuses. More than 70 AIG employees are receiving bonuses worth a million dollars or more.

Lawmakers grilled AIG’s Edward Liddy about the bonuses, but little attention was paid to what might be a bigger scandal. Earlier this week AIG revealed it had funneled tens of billions of dollars in taxpayer bailout money to other banks facing huge losses AIG had insured. Goldman Sachs received nearly $13 billion in what has been described as a backdoor bailout. Bank of America, Merrill Lynch, JPMorgan Chase and Morgan Stanley also received billions. So did several foreign banks including Société Générale of France, Deutsche Bank of Germany, Barclays of Britain and UBS of Switzerland.

Robert Scheer is a longtime journalist and editor of the political website Truthdig. He is the author of several books, his forthcoming one is called “The Great American Stickup: Greedy Bankers and the Politicians Who Love Them.” His latest article on Truthdig is, “Perp Walks Instead of Bonuses.” He joins us from San Francisco.