The Corner

Liddy’s Testimony

Edward Liddy, who became AIG’s CEO after the company’s meltdown, and is trying to manage its government-assisted comeback, is testifying right now before a House Financial Services subcommittee. He departed from his original, written testimony to announce that some AIG employees have volunteered to give back 100 percent of their bonuses, and that he has personally asked those who received more than $100,000 in bonuses to return half of the money.

This was what Liddy was going to say originally:

“We are essentially operating AIG on behalf of the American taxpayer, so that we can maximize the amount of money we pay back to the government. In order to do that, we have to continue managing our business as a business…Because of this, and becuae of certain legal obligations, AIG has recently made a set of compensation payments, some of which I find distasteful.”

The altered testimony will only slightly diminish the level of phony outrage that Democratic politicians can show over the next two hours about the easily foreseen results of legislation they themselves wrote, signed and voted for, which explicitly allowed the use of TARP money to pay such bonuses.

It is also worth noting that just after noon, as this very hearing was going on, there was a vote on the House floor on a Republican measure that would have actually done something about the bonuses and required Treasury approval of future bonuses for TARP-assisted companies. The vote was along party lines, and all but six of the 42 Democrats on the Financial Services Committee voted to block the measure. (The vote is here — a “yes” vote is effectively a vote to block the measure.)


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