The head of the nation’s most vilified corporation sat before irate lawmakers at a U.S. congressional hearing Wednesday and was assured, “We don’t intend to harass you.”
Then the harassment began.
Edward Liddy, chairman and chief executive of insurer American International Group Inc., had the unenviable job of batting back questions from a congressional panel eager to express outrage at the company for paying $165 million in employee bonuses after getting up to $180 billion in government aid.
“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 Representative Gary Ackerman, a New York Democrat, mixing his metaphors.
Democrat Paul Hodes of New Hampshire, chimed in, “You know, as far as the American people are concerned, I think AIG now stands for arrogance, incompetence and greed.”
The flap over the bonuses has lawmakers and President Barack Obama on the defensive for not including better safeguards in the bailout that saved AIG, and while Liddy found himself in the hot seat, there seemed to be plenty of blame to go around.
Liddy — being paid $1 a year to rescue the once mighty AIG — took pains to appear neither arrogant, incompetent nor greedy, politely shaking hands with protesters before taking his seat and calmly answering lawmakers’ questions.
“Six months ago, I came out of retirement to help my country,” said the 63-year-old Liddy.
“At the federal government’s request, I have had the duty, honor and extraordinary challenge of serving as chairman and chief executive officer,” Liddy said.
PATIENCE RUNNING THIN
Liddy said the “cold realities of competition” compelled the insurer to pay $165 million in bonuses. But he also made it clear he understood AIG must clean up its act — setting off a wave of nods from the assembled lawmakers.
“We are acutely aware not only that we must be good stewards of the public funds … but that the patience of America’s taxpayers is wearing thin,” Liddy said.
Liddy announced he had asked employees who received more than $100,000 in bonuses to repay at least half and he said some had already offered to give back their entire bonus.
The hearing lasted several hours with Liddy fending off and fielding a variety of often hostile questions.
Liddy said he was confident AIG could be rescued, but that the company had been “disgraced” and its name so muddied it would eventually have to be changed.
Shortly before Liddy arrived, Republican Representative Ed Royce said Congress itself should have known better.
“I voted against the bailout of AIG, and I wrote an editorial at the time, ‘Bailout Plan could Mutate Into a Gravy Train of Tax Money,”‘ Royce said. “Well it has.”
Ackerman, who said future congressional inquiries into the AIG mess could resemble the “waterboarding” interrogation techniques recently disavowed by the Obama administration, urged Liddy to cooperate and said he was there to help the beleaguered executive.
“I need all the help I can get,” Liddy conceded.
Ackerman then gave a helpful tip: “Pay the $165 million (in bonuses) back.”