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Congress Played Large Part in Excessive AIG Bonus Mess

If President Barack Obama wants to find a scapegoat for the mess at American International Group, he needs only to look east from the White House to the halls of Congress.

That’s where the legislation was enacted that laid the groundwork for AIG’s collapse, its subsequent multibillion-dollar bailout and even the millions of dollars in bonuses being paid to AIG executives that have so outraged Obama, members of Congress and taxpayers.

Call it the law of unintended consequences.

The controversy boiled over Monday when Obama took aim at the bonuses going to executives who oversaw the risky bets that sank the giant insurer.

AIG has taken out $170 billion in federal funds, and federal officials overseeing the company say it is not out of the woods yet. The backlash intensified over the weekend when the company, now 80 percent owned by U.S. taxpayers, said it was locked into paying $165 million in bonuses to key executives.

“We’ve asked the car dealers to restructure their organization, including workers restructuring their union contracts in order to save the auto industry,” said Sen. John Cornyn, R-Texas. “We ought to be asking the leadership at AIG to make the same kind of concessions to save AIG and the taxpayers’ dollars.”

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