AIG CEO Liddy: Chairman Bernanke and the Federal Reserve approved of bonuses

Thinkprogress:

During his appearance before Congress today, AIG CEO Edward Liddy said that the Federal Reserve was aware the bonuses would be paid out and “acquiesced in that decision.” In fact, Liddy claimed that Federal Reserve members were present at AIG’s “compensation committee meetings” with the ability to say “yea or nay”:

REP. KANJORSKI (D-PA): Am I to understand that you’re saying that Chairman Bernanke or his designated person at the Federal Reserve was informed that you were going to make these payments and acquiesced in that decision?

LIDDY: Yes, everything we do, we do in partnership with the Federal Reserve. The Federal Reserve is at our board meetings and our compensation committee meetings, at our various meetings on strategy and they have the ability to weigh in — either yea or nay — on anything that we decide.

In November 2008, Liddy penned a letter to New York Attorney General Andrew Cuomo in which he claimed that the top 60 AIG executives “will forego any salary increase through 2009 and their 2008 and 2009 bonuses will be restricted.” During his opening statement today, Liddy asked the employees who received bonuses to give half the money back.

Interesting that Liddy is trying to throw the FED chief under the bus. The media is not looking at Hank Paulson's role in this mess. I saw this interesting piece in New Yorker:

On Wednesday, September 17th, a day after the Fed agreed to inject eighty-five billion dollars of taxpayers’ money into A.I.G., Bernanke asked Paulson to accompany him to Capitol Hill and make the case for a congressional bailout of the entire banking industry. “We can’t keep doing this,” Bernanke told Paulson. “Both because we at the Fed don’t have the necessary resources and for reasons of democratic legitimacy, it’s important that the Congress come in and take control of the situation.”

Paulson agreed. A bailout ran counter to the Bush Administration’s free-market principles and to his own belief that reckless behavior should not be rewarded, but he had worked on Wall Street for thirty-two years, most recently as the C.E.O. of Goldman Sachs, and had never seen a financial crisis of this magnitude.

On October 3rd, Congress passed an amended bailout bill, giving the Secretary of the Treasury broad authority to purchase from banks up to seven hundred billion dollars in mortgage assets.

Also, Barney Frank wants the names of the people that received the bonuses from AIG. Liddy tried to make it a confidential list and Frank refused even after Liddy read off a few death threats from a piece of paper.

By the way, Liddy only read two threats. Click here to watch video.