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"Real Leaders Do Not Need to Grandstand"

I promised myself that I would steer clear of politics on this site because of the divisiveness and negative attitude that can often come about.  But as I was trying to come up with a topic for this week’s letter, I kept coming up to the topic of the day – AIG and the bonuses that were recently announced.

I didn’t want to poke fun at the left or at the right, but it wasn’t so hard to find one target from each side.  Two loud-spoken Senators stood out to me – one Democrat and one Republican – both of whom I believe irresponsibly and recklessly overreacted in their efforts to grandstand and be noticed without being aware of the possible consequences.  In my opinion both men looked foolish and perhaps have helped stir up a mob-mentality that may threaten harm to individuals involved.

Please note, it is not the intent of this letter to begin a debate as to whether or not the AIG bonuses were legitimate.  Instead, the debate is about whether or not our public representatives acted irresponsibly by grandstanding and making radical statements on the issue of the moment without asking the proper questions and having all of the information.  I just want our leaders to display leadership and I don’t feel like we’re getting that.  I do not think it is too much to ask that our politicians to be capable, responsible and honorable leaders.  Perhaps we need to start with “capable” before we can work our way up to the next two.

------------------------------

TO:
Chuck Schumer (D) New York
Chuck Grassley (R) Iowa

SUBJ:
Your reactions to AIG bonuses

Senators Grassley and Schumer:

I am a concerned citizen of the United States, specifically the State of Massachusetts.  Like many, on March 15, 2009 I was appalled to read that executives at AIG were going to receive bonuses totaling $165 million+ despite the billions of dollars that the American taxpayers had pledged to bail them out.  We wondered, “How in the world this could happen?” We sought answers from the people in charge – namely our publicly elected officials.

Senator Grassley, on Monday, March 16, you were quoted as saying the following towards recipients of these AIG bonuses:

“The first thing that would make me feel a little bit better towards them if they’d follow the Japanese model and come before the American people and take that deep bow and say I’m sorry, and then either do one of two things — resign, or go commit suicide.”

Senator Schumer, on Tuesday, March 17, you were quoted as saying the following:

“My colleagues and I are sending a letter to Mr. Liddy (CEO of AIG) informing him that he can go right ahead and tell these employees that are scheduled to get bonuses that they should voluntarily return them, because if they don’t, we plan to tax virtually all of it.  He should tell these employees if they don’t give the money back, we’ll put in place a new law that will allow us to tax these bonuses at a very high rate so that it’s returned to its rightful owners – the taxpayers.  So for those of you who are getting these bonuses be forewarned – you will not be getting to keep them.”

Your comments seemed to more than justify our concerns. Wall Street was trying to sucker us all again and the citizens of this country were not going to stand by and take it.

On March 18, AIG’s CEO Edward Liddy was scheduled to testify in front of Congress.  Liddy calmly and thoroughly explained the justification and reasoning behind the bonuses.  These were not performance bonuses, rather they were retention bonuses.  These bonuses had not only been contracted a year prior to their payment, but they were guaranteed by a clause in the $787 billion stimulus bill, which provided an “exemption for contractually obligated bonuses agreed on before February 11, 2009”. 

Senator Schumer, you voted in favor of this stimulus bill.  Senator Grassley, though you did not vote for the bill it is certainly your responsibility as a member of Congress to know what the bill included - no matter how many pages you have to read.  To feign surprise and outrage at the issuance of these retention bonuses is insulting to the intelligence of the American people and perhaps dangerous to the well-being of the potentially innocent workers at AIG.

Most of America thinks of the term “bonus” as something you earn for good performance, which is often times the case.  But these retention bonuses were contracts written and signed so that employees, many of whom may have been minimally responsible for the failures of AIG, would stay on board to see the organized wind-down of parts of the company.  Many of these employees would be terminated upon completion of this contract.  If not for these contracts, there was no motivation for these employees to stay and the inner-workings of a company that the American people now own could be in even worse shape. For all intents and purposes, these bonuses were salary.

Both of you knew that Mr. Liddy was testifying publicly on March 18.  Yet instead of waiting for answers as to why these bonuses were being paid, you figuratively grabbed your torches and led the mob to the castle doors of AIG to burn the witches shortly beforehand.

I must also point you to the letter of resignation from AIG employee Jake DeSantis which was printed in the New York Times.  Mr. DeSantis explains how he “was asked to work for an annual salary of $1 and [he] agreed out of a sense of duty to the company and to the public officials who have come to its aid.”  Outside of this, his only other form of compensation was this contracted retention bonus.

Senator Grassley, I would like to know how you could outwardly call for Mr. DeSantis’ resignation without a discussion of why he might have been a valuable employee or why he thought he deserved this money.  Senator Schumer, I would like to know how you could support taxing “virtually all” of this money after you yourself had signed a bill that supported such a payment. Either way, I'm sure that Mr. DeSantis' last year of work deserved compensation greater than one dollar.

As elected Senators, you have responsibilities to the American people – including those that work at AIG.  You sirs, have shirked these responsibilities in a major way.  You helped start a witch hunt that has caused threats of personal harm to these workers.

Here were some of the reported threats:

-- All you motherf***ers should be shot.  Thanks for f***ing up our economy then taking our money.

-- Dear Sir: Ya'll should have the balls and come clean and give back the bonuses. I know you would never do this so the gov't ought to take you out back and shoot everyone of you crooked sonofb****es...I would be very careful when I went out side. This is just a warning. If I were ya'll I would be real afraid. Thanks, Bill.

-- I don't hope that bad things happen to the recipients of those bonuses. I really hope that bad things happen to the children and grandchildren of them!  Whatever hurts them the most!!

-- You f***ing suck. Paying bonuses to the d*****s that made bad bets losing your company billions of dollars.  I want to f***ing puke.  Publish the list of those yankee scumbags so some good old southern boys can take care of them.

-- If the bonuses don't stop, it will be very likely that every CEO @ AIG has a bulls-eye on their backs.

-- We will hunt you down. Every last penny. We will hunt your children and we will hunt your conscience. We will do whatever we can to get those people getting the bonuses.  Give back the money or kill yourselves.

-- All the executives and their families should be executed with piano wire around their necks --- my greatest hope.

-- You mother-f***ing, c***s***ing, d***l****ers need to be taken out one by one and shot in the head. There's a special place in hell for you pond scum. Watch your backs because someone will come to get you, you can be sure.

-- The Revolution is coming. The family members of your executives are not safe. Your blood will run through the streets in the coming months.

People who received these threats might be hard-working people working to right the greater wrongs of the company to which they had devoted their entire careers.  Surely, many of them worked in areas of the firm that were profitable, or at least less responsible for the failure of the entire firm.  As Mr. DeSantis’ letter suggests, some of them may have been working for an annual salary of $1.

But before you bothered to figure that out, you jumped at the first camera or microphone and rallied the mob.  That is simply not a responsible response from someone in an occupation that demands honesty and integrity.  A responsible response might have been to gather the facts, debate the validity of the bonuses, and attempt to re-negotiate  any contracts that may have been misguided or undeserved.

Your child-like grandstanding comes off as a desperate attempt for a fleeting moment of fame.  You are United States Senators - you are not rock-stars, you are not comedians and you are definitely not America’s Next Top Model.  You should work on bringing qualities like responsibility, honesty and integrity to your posts.  We could really use some right about now.

Sincerely,

Scott Riecke

 

If you would like to comment on this letter, Scott can be reached at info@aletteraweek.com.

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