Washington Babylon — March 18, 2009, 7:28 am

Can Those AIG Contracts Be Broken?

From Steven Pearlstein of the Washington Post:

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.

Share
Single Page

More from Ken Silverstein:

Commentary November 17, 2015, 6:41 pm

Shaky Foundations

The Clintons’ so-called charitable enterprise has served as a vehicle to launder money and to enrich family friends.

From the November 2013 issue

Dirty South

The foul legacy of Louisiana oil

Perspective October 23, 2013, 8:00 am

On Brining and Dining

How pro-oil Louisiana politicians have shaped American environmental policy

Get access to 165 years of
Harper’s for only $45.99

United States Canada

CATEGORIES

THE CURRENT ISSUE

December 2016

With Child

= Subscribers only.
Sign in here.
Subscribe here.

Standing Rock Speaks

= Subscribers only.
Sign in here.
Subscribe here.

Prose by Any Other Name

= Subscribers only.
Sign in here.
Subscribe here.

The New Red Scare

= Subscribers only.
Sign in here.
Subscribe here.

Separated at Birth

= Subscribers only.
Sign in here.
Subscribe here.

The Priest in the Trees

= Subscribers only.
Sign in here.
Subscribe here.

view Table Content

FEATURED ON HARPERS.ORG

Article
With Child·

= Subscribers only.
Sign in here.
Subscribe here.

"She glanced across the waiting room at a television playing a birth-control ad and laughed darkly. 'Jesus, Lord, it would be so nice if someone just pushed me down a flight of stairs.'"
Photograph (detail) by Lara Shipley
Article
Swat Team·

= Subscribers only.
Sign in here.
Subscribe here.

"As we shall see, for the sort of people who write and edit the opinion pages of the Post, there was something deeply threatening about Sanders and his political views."
Illustration (detail) by John Ritter
Article
Escape from The Caliphate·

= Subscribers only.
Sign in here.
Subscribe here.

"When Matti invited me on a tour of the neighborhood, I asked about security. 'The message has already been passed to ISIS that you’re here,' he said. 'But don’t worry. I guarantee I could bring even you in and out of the Islamic State.'"
Photograph (detail) by Alice Martins
Article
In This One·

= Subscribers only.
Sign in here.
Subscribe here.

"She glanced across the waiting room at a television playing a birth-control ad and laughed darkly. 'Jesus, Lord, it would be so nice if someone just pushed me down a flight of stairs.'"
Illustration (detail) by Shonagh Rae
Article
“Don’t Touch My Medicare!”·

= Subscribers only.
Sign in here.
Subscribe here.

"Medicare’s popularity, however, comes with almost no understanding of what the program is and how it works."
Illustration (detail) by Nate Kitch

Estimated number of people who watched a live Webcast of a hair transplant last fall:

8,000

A rancher in Texas was developing a system that will permit hunters to kill animals by remote control via a website.

A man in Japan was arrested for stealing a prospective employer’s wallet during a job interview, and a court in Germany ruled that it is safe for a woman with breast implants to be a police officer.

Subscribe to the Weekly Review newsletter. Don’t worry, we won’t sell your email address!

HARPER’S FINEST

Who Goes Nazi?

= Subscribers only.
Sign in here.
Subscribe here.

By

"It is an interesting and somewhat macabre parlor game to play at a large gathering of one’s acquaintances: to speculate who in a showdown would go Nazi. By now, I think I know. I have gone through the experience many times—in Germany, in Austria, and in France. I have come to know the types: the born Nazis, the Nazis whom democracy itself has created, the certain-to-be fellow-travelers. And I also know those who never, under any conceivable circumstances, would become Nazis."

Subscribe Today