Obama was Right the First Time: AIG Contracts Provide No Escape

by Benjamin Domenech on 9:31 am March 19, 2009

The AIG bonus scandal probably won’t lead to any forced return of those bonuses after all.

Instead, what emerged from the House Financial Services Committee hearing on AIG’s payment of $165 million in bonuses to executives was that there probably isn’t a legal way to avoid paying those bonuses now. Despite the expressions of outrage by members of Congress, these bonuses were all promised by the company in signed contracts — as Committee Chairman Barney Frank (D-Mass.) noted early in the hearing, waving his copies of the documents — and those contracts don’t appear to offer an escape hatch.

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