President Obama has told Treasury Secretary Geithner to "pursue every legal avenue" to block $165 million in bonuses to American International Group executives. Come on, this isn’t rocket science, it’s derivative trading. Here’s a simple way to get the job done without filing a lawsuit.
Just let every AIG exec know that each bonus check is going to be delivered by the FBI, which will be conducting a pre-screening process in conjunction with the Justice Department for every bonus recipient to see just what the executive knew about the fraud at the company.
If I were president, I would simply tell the executives who opt to take the bonuses that they will automatically be enrolled in a new government anti-fraud program called "AIG Bonus Watch," which will entail intensive FBI background checks of all their business dealings for the last decade to make sure they are worthy of taxpayer dollars. The names of the executives will be mailed to former associates with confidential forms asking for tips about misconduct. President Obama can bring retired FBI agents out of retirement to turn over every rock at AIG for a connection between the bonus and the fraud at the company. I bet a lot of those retirees are just as angry as me and would volunteer to dig around in an AIG executive’s file cabinet.
There’s never been a contract made that cannot be broken when fraud’s involved, and fraud at AIG does not appear to be isolated when you look at scandals at the company over the last many years. If I were these AIG execs I would refuse the checks. Executives that live in straw houses, in angry times, shouldn’t be begging the government to strike a match.