Resignation letter from Jake DeSantis, an executive vice president of the American International Group’s financial products unit;
It is with deep regret that I submit my notice of resignation from A.I.G. Financial Products. I hope you take the time to read this entire letter. Before describing the details of my decision, I want to offer some context:
I am proud of everything I have done for the commodity and equity divisions of A.I.G.-F.P. I was in no way involved in — or responsible for — the credit default swap transactions that have hamstrung A.I.G. Nor were more than a handful of the 400 current employees of A.I.G.-F.P. Most of those responsible have left the company and have conspicuously escaped the public outrage.
After 12 months of hard work dismantling the company — during which A.I.G. reassured us many times we would be rewarded in March 2009 — we in the financial products unit have been betrayed by A.I.G. and are being unfairly persecuted by elected officials. In response to this, I will now leave the company and donate my entire post-tax retention payment to those suffering from the global economic downturn. My intent is to keep none of the money myself.
I take this action after 11 years of dedicated, honorable service to A.I.G. I can no longer effectively perform my duties in this dysfunctional environment, nor am I being paid to do so. Like you, I was asked to work for an annual salary of $1, and I agreed out of a sense of duty to the company and to the public officials who have come to its aid. Having now been let down by both, I can no longer justify spending 10, 12, 14 hours a day away from my family for the benefit of those who have let me down.
h/t eljay
I'm told some of you are getting a NYT registration page - you can read the whole thing here.
"It’s now apparent that you either misunderstood the agreements that you had made — tacit or otherwise — with the Federal Reserve, the Treasury, various members of Congress and Attorney General Andrew Cuomo of New York, or were not strong enough to withstand the shifting political winds."
The last eleven words say it all, and we can anticipate more of this in the New and Changing America.
I hope the Country survives.
Our country is in the hands of the most immature, inexperienced pack of louts in our history. They lurch from reaction to reaction, then stand back, point fingers and let the chips fall where they may. It is impossible to conceptualize the uproar and outrage this same behavior would inspire in the MSM if perpetrated by Republicans. We are truly going to hell in a handbasket.
As predicted this would happen.
Say bye to the rest of the best now.
and this is a bit disconcerting:
Mr. Liddy, I wish you success in your commitment to return the money extended by the American government, and luck with the continued unwinding of the company’s diverse businesses — especially those remaining credit default swaps.
Anna Mac:
We have been going to hell in that handbasket for quite some time. For that you can thank the most spoiled, self-congratulatory generation in US history, my own (I was born in 1943). What else can you expect from folks who look back fondly at Woodstock as some sort of cultural achievement, or who take John Lennon's drivel as a philosophic cornerstone?
I've already shared this letter with a few of my "progressive" friends. Not that it will help...they love TOTUS.
Imagine there's no reason.
It's easy if you try.
Cry me a river Jake. Playing the blame game is just another reason why I have no sympathy for you (or anyone else that stoops to that level).
Anyone that expects government to cure their ills deserves $1 per year. Just be thankful it's a U.S. dollar!
An incredible letter.
First, my own view, and this letter supports it, was that in opposition to the recent statements made by Cuomo etc that the bonuses had been returned, my view was that they had not - and should not be returned. Cuomo was saying that because he, Obama and Congress had set up a mob lynch hysteria that could incite violence to AIG staff - and this violence could, in a court of law, implicate Congress, Obama, himself as inciters.
Remember how Obama told the public that he was 'angry', that wealth was a result of greed and that these executives were akin to terrorists with suicide vests, attacking the US. What a terrible thing to say..and he incited violence.
So, it was necessary to dampen it by stating that the bonuses had been returned. This letter denies that statement.
Again, an excellent letter. Note that he says that his salary, like that of Liddy was $1 a year; so, the bonuses were for the work. Interesting that Obama, Congress, Cuomo didn't mention this fact. Not one word.
Notice also that DeSantis clearly points out, several times, the false, harmful and baseless accusations made by Congress and 'elected officials'. That has to include Obama.
Excellent letter.
John Galt got to him.
The only logical response is to go on strike, like this guy did. If they won't pay you to work, then do not work.
POP! ~ KA-CHING!!
The sound of another golden parachute opening.
Hating Rush was lowering the approval of Obama, the first president of the US with his own personal brand *after taking office*. Now he hates those working at AIG, and rolls out his "digital brownshirts" to bash them and whip up the crowd.
Hitler did this. Not sure of any other precedents.
We are in for a reverse WWII. Europe is going to end up on top, and we are going to be begging them and China for assistance in about 8 years. But that's OK, because we can still blame Bush so it will all be all right!
Unilaterally renegotiating signed contracts is now acceptable in the US.
Nardelli & Wagoner, are you listening? No need to go to the UAW to alter signed contracts, just amend it yourself. Personally, I like the $1 per year with a performance incentive bonus. Better still, mimic the brilliant US congress: just add a clause that 90% of their wages will be returned to the organization.
Nice letter by Jake.
The morons in "control" haven't realized that the global credit crisis through credit default swaps is a $60 trillion dollar tsunami.
They call in the rescue squad to AIG, basically working pro bono, and then promptly put a political bullet in their head, while the house is continuing to burn down.
Hope and 'spare change' folks.
Complete and utter idiots on the government side of the equation.
Cheers
Hans-Christian Georg Rupprecht, Commander in Chief
1st Saint Nicolaas Army
Army Group "True North"
I receive a salary and optionally a bonus in which my performance, that of my unit and that of the company as a whole is factored in. Therefore in the case of a financial crisis I would get no bonus even if I were a genius, which I obviously ain’t.
My DeSantis, on the other hand, has entered into a different kind of contractual arrangement, pretty obvious given his base pay, and therefore I hope for his own sake that his employment contract stated that his own performance is the sole or far weightier factor when determining his bonus.
Still, it can’t look good to have AIG on your resume as your last employer.
By the time Obama is finished his term the only jobs left will be government bureaucrat. The underground economy and black market will be huge. There will be no taxes paid to fund all these government programs and the corruption will be pervasive.
not stirred enough you are an ignorant clod. Apparently you have know idea what is going on,.
Pay for work done! How would this sit with you.
Watched Glenn Beck last nite and a woman (can't remember her name) is investigating all those buses that showed up at the AIG's homes that got bonuses. Seems the buses were paid for by ACORN (taxpayers money) and the body count came from the Service Employees Union - mucho intimidation. Remember the Nevada Primaries. Now, this is the type of thugery you can expect coming in from Chicago. Boy, the US is really in trouble with this gang of thieves. I guess you get what you pay for.
This is what happens when you don't declare Bankruptcy and "open" your books to a legitimate Court. (Chapter 11 reorganization)
The solutions were obvious, but that would not have rewarded the speculators who lost/bet money they didn't have. A deadbeat financial system protected by corrupt political connections. It’s those worthless speculators that are been bailed out without consequences. Remember that "Junk Bond" Milken went to jail for his transgressions, but these bastards are protected. It may be that "insider" Bernie Madoff was acting prudently when he chose not to risk client money in the market. (Clients that thought they were getting an insiders advantage, screw them)
The worthless regulators had existing laws, but lacked the political will or support to enforce. We are actually a Nation of too many conflicting laws... The legal system is dysfunctional, even Clinton didn't trust or respect the Courts
To big to fail.. Nonsense, if the Regulators had/have that opinion they where/or are to big to fail, re-organization was/is absolutely required. Who allowed this condition to exist, are they the same people who now want expanded powers & and additional useless laws that won't be enforced
When anyone makes an argument based on a speculative Legal opinion, they are blowing
Smoke up your butt.. 99% of contracts are managed without legal argument (fixed pricing changed, mile stones changed, all conditions open to negotiation). When, and only when, a total breakdown occurs do the lawyers & courts get involved.
My rant for the day!
Scum now rule.
I agree with not stupid enough.
Every organization, community, cultural group, business, corporation or individual expecting any money what-so-ever from any of our many layers of government, including but not limited to, government employment salaries and wages, payment for contract work completed, pensions, tax refunds, welfare, lottery and gaming prizes, awards, dues, grants, loans, transfer payments , interest, or any other kind of payment at all, will hereby be paid exactly one US dollar, one time only.
f*ck your contracts, outstanding invoices, and agreements, they're now worthless, get somebody else to cure your "ills".
Not stupid enough (his pwn-self) will be handing out pre-printed 1 USD, cheques in lieu of payment between 10 and 3 with an hour lunch break from monday to friday under a tarp beside the bus stop at Jane and Finch, for ever, for the usual pay.
Taxes will be redefined accordingly.
It might be advisable for all capitalist executives to quit and retire to another country while they still can.
It's only a matter of time before they are taken out back and shot by the growing Obongo dictatorship.
Perhaps if the entire private sector staged a strike and shut down the country there might be an appreciation of how it is they who provide the chicken in the pot and not Obongo.
I would have suggested perhaps they all stop paying their tax installments for a quarter or two, but that would just encouraged the Obongomites to print more money while they are waiting for the arrests and confiscations to be completed..
Phillip G. Shaw:
This is what happens when the CEO of a company does not support his own employees.
I watched Mr. Liddy in front of the Congressional Inquisition Committee, and he missed many opportunities to explain fully what was involved with these bonuses.
The culprits are gone. They have escaped the death threats and the vilification.
Good people are trying to put things right.
In effect, they are doing away with their own jobs, thus the "retention Bonus". Doesnt anyone realize that if they didnt make their jobs extinct, they get nothing?
Kate's link goes to a registered-only NYT page. For the full letter, go here (via Ace of Spades)
http://radioviceonline.com/dear-aig-i-quit/
Sad but true, this administration, msm and people today react only to hype and don't let facts get in the way.
The letter from Mr DeSantis lays it all out pretty clear but it doesn't sate the avenging angels of indignation. Kind of like Enron, not eveyone or every division at AIG screwed the pooch so to speak but everyone is painted with the same brush.
They talk of bonuses as if they were performance bonuses but in fact they were "signing bonuses" for the employees in key spots to stay with the company. Check with any pro sports team if you have trouble with understanding signing or retention bonuses.
It is truly troubling that in all of this witch hunt the political hacks that helped drive the basics of the economy into the toilet are sitting on high, thinking their sh*t doesn't stink. Dodd and Frank have had their fingers in this mess for a long time and have also received contributions for their efforts from AIG along with that other guy from Illinois... oh yeah, B.H. Obama.
I may not like that some of my tax dollars (yeah, I'm paying in two countries this year) is going to pay for employee benefits but a contract is a contract.
The FCC has not released any information on the naked short selling that killed Bear-Stearns and Lehman Bros. They watched it happen.
The thing I know for sure is this Presidents name on a contract is for souvenir purposes only.
Anyone that expects government to cure their ills deserves $1 per year. Just be thankful it's a U.S. dollar!
Posted by: not stirred enough said at March 25, 2009 11:04 AM
Do you ever proof your "contributions" before pressing POST?
Re-read the entire letter, or - more likely - read it for the first time. Do you think a man willing to work for $1 a year in the good faith of fair compensation afterwards is looking for the government to "cure their ills"? Of particular interest is the realistic analogy that AIG employees deserve their bonuses much the same as a plumber deserves to be paid for pipework, despite the fact that subsequent incompetence by an electrician burned down the house.
Apparently, DeSantis thought enough of his own ablities to take the hit on guaranteed salary in the hopes that he would be paid accordingly, according to his performance. When was the last time you worked under those conditions, NSE? Ever?
DeSantis' folly was in assuming that the US government wouldn't actually insert itself inside a legally binding contract, crying "foul" when the knowledge of the bonuses were in plain sight before the bailout was issued. And now obama's brownshirts have - effectively - demonized capitalism once again, and basically declared the contracts null by pushing to tax the bonuses at 90%+ after the fact.
This should disgust everyone in America. And those with the pitchforks shuttled hither & yon by ACORN to AIG executive's homes might ask themselves how much extra cash they have when the bonuses are taxed at confiscatory rates.
Obama, Pelosi, Reid, Geithner, Frank, Dodd... the list goes on: they are a "Clear & Present Danger" to the US. Q.E.D.
not stirred... Were you trying to say that EVERYONE who voted for obama only deserves 1 dollar a year? I couldn't agree with you more. Hope and Change!
My opinion is the responsibility for the activities of A.I.G. over the last ten years is with the Board's of Director during this period. I do not understand why there has not been any mention of this responsibility, that has come to my attention, in all the blather from the Politicians. An appropriate action would be indictment for avoidance of insurance regulations through the use of irresponsible documentation of the transactions. If each individual transaction is not documented to show the individual mortgage signer acknowledges he or she is at least aware of terminology used by acknowledged trader of "swap transactions" then the various members of the Boards of Directors must step up to their individual sworn duties.
As I mentioned just a Without Prejudice opinion from an individual who has no understanding of "swap transactions. Cheers;Mike Sr.
Yes, their only motivation now is fear.
Fear of not having a job. Welcome to the recession. Its what is motivating all of us right now. Why should the folk at AIG be any different? They are lucky to have a job at all after their colossal blunders.
If you re going to celebrate the good times, learn how to accept and tolerate the bad times.
mhb, I did read the entire letter and I do re-read before posting.
dj, So far your the only one who gets it.
Anybody who expects a politician to come to their aid is dreaming. Just like Ayn Rand said in The Fountainhead, "the meaning of life is to take something this earth offers and do something with it." Jack should do the same...my guess he's a self-righteous red state rightoid seeking sympathy by bashing Democrats. Jack, if you're worth more than a dollar a year stop complaining and follow Rand's advice!
nailed it RSP
Thats rich "not stupid enough" quoting Ayn Rand.
Next he will stop worshipping the big zero, oops the big O.
"Of particular interest is the realistic analogy that AIG employees deserve their bonuses much the same as a plumber deserves to be paid for pipework, despite the fact that subsequent incompetence by an electrician burned down the house."
The analogy doesnt hold. In this case, the plumber, who ostensibly got paid for his previous plumbing, wants to be paid for a continuing to do pipework AFTER the house has burned down. Its his own choice, but he shouldn't expect anything for it.
I don't know about this particular fellow, but htere are plenty of people at AIG who accumulated a lot of wealth at great risk. In other words, they made a hell of a lot more money in the years leading up to this debacle than they would have if they hadn't taken risks. That extra money that the company made at great risk and distributed amongst them, is what they should be drawing on right about now.
In simple terms, if you are making 1.5 million by taking risks, instead of 1 million wihtout taking risks, then don't complain if you are forced to dip into that extra 0.5 million when your pillars of sand come crashing down. This chap almost definitely benefitted financially from the risks the company took and now its come to bite him. Did he choose to take the risks? No. But he didn't oppose them either, or else he would be working for a risk averse firm right about now.
Common sense isn't as common as it once was.
Feared:
Have you ever worked for a company as big as AIG?
Would you be surprised to learn that many different departments are not aware of what other departments are doing?
Nonsense is more common than ever.
FREE, It's odd you've chosen a blog name that panders to the big zero.
not stirred enough - heh - trying to cover your tracks?
You did NOT say that everyone who voted for Obama only deserves $1 a year. You wrote:
"Cry me a river Jake. Playing the blame game is just another reason why I have no sympathy for you (or anyone else that stoops to that level).
Anyone that expects government to cure their ills deserves $1 per year. Just be thankful it's a U.S. dollar!"
Who was 'playing the blame game'? Obama, Congress, the Press, ACORN. Perhaps you think it is not objectionable that a Congressman suggest that the CEOs of AIG should 'commit suicide'; perhaps you think it is correct that Obama should compare such executives to terrorists out to destroy Americans.
DeSantis was, quite correctly, objecting to this outrageous and unethical promulgation of lynch mob hysteria by Congress, the Press and the President.
As for your 'anyone who expects government to cure their ills' - were you referring to the woman who expected Obama to provide her with a house? [He did]. Or to those people who took out mortgages they could not pay? Or to union leaders who want Obama to enable them to enlarge their empires? Or to Democrats who want to ensure their re-election by having Obama and Congress validate their pork projects? What were you referring to?
Or are you against government bailouts of any and all private institutions? In most cases, I'd agree with that position. The problem is, you didn't say this.
You refer to 'doing something that is offered'. Isn't that what a financer does? Isn't that what even a politician does? Then, you inform us that DeSantis (you call him Jack, which implies either friendship or contempt)...is a 'self righteous red state rightoid'. Whew. What's your evidence? Or is it your 'self righteous leftoid bias showing through?
DeSantis was absolutely correct to criticize Liddy, Congress and, by extension, Obama, for their deliberate incitement of lynch mob hysteria.
And, his contract stated that he WAS worth more than $1 dollar a year; it was given as a bonus - but Congress and Obama instead, used these bonuses as red herrings to divert attention from the pork stimulus package and the trillion dollar deficit.
There is one silver lining in this. Companies will now be wary, as they should, of taking government money.
You should fight like heck to keep your company from taking aid from taxpayers because this is what happened. The letter writer might not have been responsible but did he take any other action earlier that could have prevented this.
If the plumber saw the electrician putting in bad wiring then he has an obligation. And if the electrician burns down the house and the plumber cannot get paid 100 cents on the dollar...is sad, its tragic, it is even unfair but thats life.
I am curious, if the Credit Default Swap team delivered exroidinary gains to the AIG FP group, would the letter writer have got a bigger bonus than if his just his group contributed?
Look I dont like Congress breaking contracts, but it happens in bankruptcy situaations all of the time. The answer is don't let your company get into a situation where the government needs to bail it out.
That the letter writers side of the story wasnt said by the CEO is the sad part. There was a defence, and Congress should be ashamed for not stopping this BEFORE rather than after.
Same lesson, take government money you are subject to political whim.
stphen - no, Congress doesn't break contracts. The rule of law is primary in the US and not subject to political will.
In bankruptcy situations, contracts can be renegotiated but only because of that bankruptcy clause. AIG didn't move into bankruptcy. Perhaps it should have but that is a different question. It didn't and therefore, those contracts were valid.
And no, taking government funding should not set up an institution to operate outside the rule of law and only by political whim. Governments cannot operate, even by bribes, outside the rule of law.
Oh, and does a plumber also know about electrical wiring?
not stirred enough - how does a name of Free, 'pander to the big zero'? Please enlighten us. I, for one, don't get it.
Posted by: Feared at March 25, 2009 1:31 PM
Sorry the analogy is too complex for you, Feared. Many of the bonuses targeted for coveting confiscation by the obama crew were retention bonuses, promised to keep employees on the payroll and keep the business afloat. Thus, employees gave up chances at alternate employment in good faith AIG would pay retention as promised. Think of it as the plumber's "final payment" was held in escrow until some agreed-upon time after the pipework was complete, but was still legally owing. Do you understand it now, Feared? And do you see why it is bad faith to go back on the bonuses?
The bonuses - to repeat - were legal contracts. The government has no justification to alter 3rd party contracts whether or not it bails out a company or not; contract law is a cornerstone of democracy and capitalism. To abrogate legal contracts on a whim, or - worse yet - for transparently political reasons undermines the core of the US legal and capitalistic system. Considering the players involved, however, this goal is not entirely beneath their plans, as it is clear that obama & co. are bent on damaging, if not destroying, western capitalism.
To paraphrase, "Marxim IS as Marxism DOES". And all Americans should realize that if their company is taken over by the democrats, individual salaries and other forms of compensation are up for similar unlawful renegotiation; after all, they are "just contracts", too.
The entire bonus scandal is a wholly-owned kleptocrat "bait & switch", anyway. The AIG bonuses are less than 1/10 of 1% of the total bailout, and pale in comparison with the $trillions wasted by the democrats on liberal causes (Great Society, War on Poverty, etc.) that are abject failures. Here's a thought: why not take back the bonuses granted to franklin raines, jamie gorelick & other sleazeballs of Freddie/Fannie fame who were paid after ensuring those GSEs were run into the ground?
mhb
mhb: "The AIG bonuses are less than 1/10 of 1% of the total bailout, and pale in comparison with the $trillions wasted by the democrats......"
Exactly. Hey! Dems never waste a good crisis especially when they facilitated it in the first place.
For TJ*, the AIG bonus "issue" = the Reichstag fire.
* Teleprompter Jesus
ET,
You torn off a huge chunk and I'll try to comment on it as best as I can.
Jack is playing the blame game but he's not the only one. I've centered him out because in his well written letter he plays himself as a victim. I'd like to see his tax returns for the last 10 years to find out exactly how much of a 'victim' he actually is.
What were you referring to? I'm referring to everybody and anybody that expects government to help them; leftard and rightoid alike.
I have stated in several previous posts that my position is no to bailouts. The market should prevail.
I call him Jack out of contempt, contempt for the culture of greed, excess and risk he has been a part of for a good many years. He tries to distance himself but the fact remains he is part of the problem.
I'm a centrist so my bias can go either way.
It seems there exists a great opportunity to lure some of these experienced executives to Western Canada where they will be most welcome.
ET
When you get something for FREE it costs you zero. FREE's post tries to exploit the need for self expression.
Alway figured you swung both ways stirred.
not stirred enough - I don't see what DeSantis' income over the last ten years has to do with this current situation. His income over these years is totally irrelevant. It would be an error to assume that IF someone's annual income is very high, THEN this means that they are operating out of greed.
The current situation is that his income is defined as 'bonus' or 'retention' rather than a salary of $1 dollar a year and that, despite this income being outlined in a legal contract, Congress and the President were trying to ignore the Rule of Law and insist on its negation. And, both the current CEO Liddy, Congress and Obama, were vilifying and motivating a lynch mob hysteria against AIG executives for accepting these legal contracts. That's the only issue.
I agree - the market should prevail. BUT, since the government DID choose bailouts, THEN, it cannot nullify and importantly, cannot vilify legal contracts. Again, the Rule of Law is above political whim and will. And because the government cannot walk over the law, then, this same government was unethical, amoral and frankly, corrupt, in vilifying the AIG executives for those same contracts.
I don't think that you have the knowledge base or moral right to define DeSantis' work as based on greed or excess. The fact is, banking and financial institutions have a specific role in industrial economies. Certainly, excess (such as the sums paid to sports people, film stars, etc) and divorce agreements are evidence of greed.
Risk? Most certainly but I'm puzzled why you view risk with contempt. Risk-taking is the basis of all progress, whether it be in the research lab, in the development of new technology or in developing new industrial ventures.
I don't see why DeSantis is 'part of the problem'. The problem, as I see it, is that Congress and the President ignored the Rule of Law and openly, unethically, vilified legal contracts, setting up lynch mob hysteria. That's what DeSantis was talking about. And Congress and Obama were doing this to set up a red herring diversion from his pork stimulus package and his trillion dollar deficits.
As for the operation of AIG and the banks, that's a different issue and does merit criticism. But so does the government, particularly, that of Clinton, which insisted on setting up an ungrounded mortgage and loan fiscal infrastructure.
If I was a leader of a country like Canada, New Zealand, Australia or Switzerland, I would be organizing efforts to lure U.S. companies - can't imagine it would take much for them to leave.
RSP, exactly. My mom's been saying that to me, a boomer, for more years than I'll share here.
The company for which I work has long refused to take government money, two different chairmen, because of the strings attached. Some in this industry have and survived but with this anti-business administration, now is not the time.
Jake DeSantis worked at a troubled company for $1 a year with a retention bonus if he stayed on through the hard times. I wonder if Obama is willing to give up his $400k plus salary and work for a dollar until the US deficit is less then $1 trillion?
"not stupid enough" doesn't realize that freedom isnt FREE. what a dolt. OH Ive been on here longer than "One Big Ass Mistake America" has been voting present.