CURL: Lawmakers unleash rage at AIG

Political Theater column

The man hand-picked by the federal government to oversee the recovery of American International Group Inc. just six months ago unwittingly became the face of corporate greed and Wall Street hubris on Wednesday.

One by one, Capitol Hill Republicans and Democrats took aim at Edward Liddy, displaying “outrage” over $165 million in contract bonuses being doled out to the company´s top executives after it tapped $170 billion in federal bailout cash.

“Do you have anything to say for yourself?” asked an exasperated Rep. Stephen F. Lynch, Massachusetts Democrat.

“Yes, sir, I do,” said Mr. Liddy, clenching and unclenching his jaw. “As I mentioned, these contracts were all put together before I was at AIG. I would not have done these contracts. … I really do take offense.”

“Offense was intended, sir,” Mr. Lynch snapped. “This is like the captain and the crew reserving the lifeboats for themselves and saying to hell with everybody else!”

Some lawmakers were so enraged that they sputtered out mixed metaphors. “There’s a tidal wave of rage throughout America right now, and it’s building up, and it’s expressing itself at this latest outrage, which is really just the tip of the iceberg,” said Rep. Gary L. Ackerman, New York Democrat.

But the gray-haired man with the square jaw did not appear cowed by his unfriendly confines and quickly gave lawmakers exactly what they wanted - a pound of flesh.

“I have asked the employees of AIG Financial Products to step up and do the right thing,” Mr. Liddy told lawmakers gathered for a hearing in the Rayburn House Office Building. “Specifically, I have asked those who received retention payments of $100,000 or more to return at least half of those payments.” Some, he said, had offered to return all of their bonuses.

The declaration was a stark departure from his prepared remarks, which did not contain the dramatic offer when House aides passed out Mr. Liddy’s opening statement an hour before the hearing began. That text was mostly conciliatory, but the chief executive was occasionally feisty and defiant during questioning.

The day had all the marking of a circus - reporters lined up two hours before the hearing and TV crews roamed the hallway in front of Room 2128. At one point, a tall, gray-haired man spotted at the far end of the hall sent the crews running. But in the confusion, cameras and reporters ended up surrounding the short and balding Zippy Duvall, president of the Georgia Farm Bureau.

The antiwar Code Pink ladies were in the house to protest AIG, but the panel chairman had little patience for them and, banging his gavel loudly, said: “Are you going to surrender those signs so they can be held for you later on, or do you want to be removed from the room?” They handed over their signs.

“Given your method of dealing with this,” deadpanned Rep. Barney Frank, Massachusetts Democrat and chairman of the House Committee on Financial Services, “I assume it’s a good thing no one was wearing a T-shirt with their slogan.”

Lawmakers were bent on getting some camera time on the irksome issue, and Rep. Paul E. Kanjorski, Pennsylvania Democrat, said the day could be long because “I assume there’s nobody at this hearing today that isn’t going to want their five minutes with Mr. Liddy.”

He was right.

Story Continues →