This morning’s New York Times features a letter from one of those greedy guys from AIG who’s collecting a hefty bonus, courtesy of the U.S. taxpayers. The letter gives us some remarkable insight into the mindset of today’s AIG employees.
Jake DeSantis is a ten-year employee of AIG. Until last year, he worked for one of their more profitable divisions, and was quite successful there. He started out as an equity trader, worked his way up to head that business, and then was named head of business development for commodities.
Then, when AIG went all pear-shaped last September, the company scoured its ranks for the best and brightest to take on a truly unpleasant job — overseeing the dismantling of the company’s Financial Products division, at a going salary of $1.00 per year. The carrot was that if they made it through the process (and the company did as well), they’d be handsomely rewarded with bonuses. The stick was that if they couldn’t amputate the division before the patient died, they’d be out of work entirely.
Well, Mr. DeSantis took the offer and went to work. And, apparently, satisfactorily — he wasn’t fired and the company has not yet completely fallen apart.
But then AIG’s new owner, the federal government, decided it needed some scapegoats. The most convenient ones they could find were AIG employees like Mr. DeSantis — those who, in the midst of the company’s peril, stood to collect hefty bonuses. That was just what the people in D.C. needed, so they started whipping up a frenzy about those bonuses.
Bonuses that people like Mr. DeSantis had counted on — and why shouldn’t they? They had signed contracts guaranteeing them, contracts both they and AIG’s management had signed in good faith. Those bonuses were promised in exchange for essentially no salary while working at a dead-end job, doing thankless, ugly work.
The contracts couldn’t be set aside readily. So AIG’s owners — Congress and the Obama administration — figured that if they couldn’t just prevent the bonus payment, they’d get the money back somehow. Special taxes on the bonuses — usually in the neighborhood of 90% to 100% — were proposed. Demands were made of the employees to give the money back. And the Attorneys General of New York and Connecticut started demanding a complete list of the bonus receipients, threatening to expose those who wanted to keep the money.
That tied in nicely with ACORN’s bus tours of the homes of AIG employees, showing the rabble just how (and where) the “greedy SOB’s” lived. (Pitchforks and torches optional, of course.)
Well, Mr. DeSantis has had enough. He’s resigned from AIG, and will start looking for employment elsewhere. (If his successes in the equity trading business are as he describes, he should be very quickly snapped up.) He’s also keeping his bonus, and vows to fight for it — and then donate it to charity.
I suspect Mr. DeSantis’s attitude is emblematic of those still working at AIG. If they don’t have posters on the wall reading “THE BEATINGS WILL CONTINUE UNTIL MORALE IMPROVES,” they should.
Rudyard Kipling once famously said, “once you pay the Dane-Geld, you never get rid of the Dane!” There is a variant here — once you take the King’s gold, you are forever at the King’s bidding.
The federal government owns AIG. That translates into a whole slew of bosses — from the 535 members of Congress to the entire Obama administration. The vast majority of them have never run a business, or worked in the private sector — and it shows. (Try and figure out just what co-CEO Maxine Waters (D-CA) is trying to get at here, when she is grilling Treasury Secretary Timothy Geithner:
[youtube]http://www.youtube.com/watch?v=OFvnL3npQgY[/youtube]
I think she’s trying to put together some great conspiracy theory involving Goldman Sachs, but I’m not even sure she knows what she’s talking about.)
This is the price one pays when selling oneself to the federal government. A deal is a deal — right up until the government finds it politically advantageous to renege.
