- Current Issue
SIGN IN to access the Harper’s archive
ALERT: Usernames and passwords from the old Harpers.org will no longer work. To create a new password and add or verify your email address, please sign in to customer care and select Email/Password Information. (To learn about the change, please read our FAQ.)
The legal argument for honoring these ill-considered contracts is that a deal is a deal and that trying to abrogate them will only wind up costing the government even more in legal fees and punitive damages. But that doesn’t mean the government and its handpicked new management team at AIG were powerless to renegotiate those contracts long before last weekend’s deadline.
After all, if the government hadn’t stepped in, AIG would have gone bankrupt and those whiz-bang traders could have lined up with all the other unsecured creditors at the bankruptcy court to see how much money they might receive three or four years down the road. And the government could still put the company into bankruptcy anytime it chooses.
Moreover, the Justice Department would surely have been within its rights to launch an extensive civil and criminal investigation into whether those bonuses were granted as part of an ongoing conspiracy to defraud shareholders — a conspiracy in which the traders were knowing participants. As part of that investigation, prosecutors could have also prepared a public report to the Treasury, the Federal Reserve and Congress listing the names and home addresses of all the traders who were slated to receive the bonuses, along with a detailed description of their role in creating the mess that brought down the company. There could even be a chart listing their salaries, bonuses and other perks over the past decade.
More from Ken Silverstein:
Lucas Mann on hope and change in a minor-league-baseball city
Minimum number of baboons forced to smoke crack in a 1989 study testing the efficacy of cigarettes as a drug delivery device:
A reduction in distrust toward atheists was documented among pious Canadians who are reminded of the Vancouver police.
A Missouri cinema apologized for hiring an actor dressed in body armor and carrying a fake rifle to appear at a screening of Iron Man 3.
Subscribe to the Weekly Review newsletter. Don’t worry, we won’t sell your email address!
Winner of the 2012 Olivier Rebbot Award for best photographic reporting from abroad in magazines or books