Tester to Treasury Department: Reject more A.I.G. bonuses

Senator urges Administration to use “common sense”

(WASHINGTON, D.C.) – Senator Jon Tester is urging the U.S. Treasury Department to reject a request by insurance giant A.I.G. to spend millions of dollars paying bonuses to its corporate executives.

Tester today sent a letter to Kenneth R. Feinberg, the Treasury’s “compensation czar,” who is charged with overseeing compensation for executives at companies that received a taxpayer-funded bailout.  It followed a request by A.I.G. to Feinberg that he sign-off on a multi-million dollar bonus payout to the company’s executives.

Tester has forcefully criticized taxpayer funded bailouts from his position on the Senate Banking Committee.  He is the only Democrat in the U.S. Senate to vote against both the Wall Street bailout and the bailout of the auto industry.

“A decision by AIG to spend hundreds of millions in deferred compensation to some of its top employees is unacceptable when the American taxpayer is now owed $180 billion from the company,” Tester wrote.  “Families, farmers, ranchers and small businesses in Montana are struggling during this economic crisis. Mills and mining companies are closing, workers are being laid off and Montanans are wondering how they will pay their monthly bills and keep their families afloat. This is not the time to use taxpayer backed resources to pay bonuses to corporate executives.”

In March, Tester blasted the insurance giant at a Banking Committee hearing, telling executives they would be “on the street” if taxpayers hadn’t bailed them out, saying “They need to understand that the only reason they have a job is because of the taxpayers.”

The full text of Senator Tester’s letter is available below.

Mr. Kenneth R. Feinberg
The White House
1600 Pennsylvania Avenue, NW
Washington, DC  20500

Mr. Feinberg,

It has been reported that AIG has sought your guidance, as the recently appointed compensation czar for the Administration, on possibly spending millions of dollars to pay bonuses to their corporate executives. I urge you in the strongest terms possible to reject this request.

A decision by AIG to spend hundreds of millions in deferred compensation to some of its top employees is unacceptable when the American taxpayer is now owed $180 billion from the company.

Just a few months ago, an identical situation materialized with AIG inexcusably attempting to spend more than $165 million in retention bonuses. The angry public sentiment was understandably palpable as folks across the country couldn’t understand how the executives at bailed out corporations were being rewarded with taxpayer dollars. Several legislative measures were introduced in the U.S. Senate and House of Representatives until many of the employees rushed to return the bonuses.

Families, farmers, ranchers and small businesses in Montana are struggling during this economic crisis. Mills and mining companies are closing, workers are being laid off and Montanans are wondering how they will pay their monthly bills and keep their families afloat. This is not the time to use taxpayer backed resources to pay bonuses to corporate executives.

Please utilize some common sense when reviewing AIG’s request and reject the proposal to spend millions of taxpayer dollars on corporate bonuses.

Sincerely,
(s)
Jon Tester
U.S. Senator