CodePink protesting AIG in March

If you were to put together a list of the most well-publicized U.S. political stories of 2009, “AIG bonusgate” has to be right up there. We learned in March that the AIG financial products division — the part of the company most responsible for last year’s international financial meltdown — rewarded employees with a total of $165 million in bonuses. Since the federal government owns 79.9 percent of AIG, the Obama administration looked liked fools for not heading off these bonus payments and Congress and New York state Attorney General Andrew Cuomo dramatically stepped in. Shortly after “bonusgate” faded from the headlines, Cuomo had reached a compromise with the AIG employees that they would return $45 million in bonus payments to the Treasury Department.

Well, the Washington Post’s Brady Dennis reports that AIG has only paid back $19 million of this $45 million. And, financial products division employees are getting a new round of bonuses in March 2010. Whether the Obama administration can get more bonus money back and also prevent another p.r. debacle this March seems dependent on the savvy and heroism of “compensation czar” Kenneth Feinberg and, to a lesser extent, Cuomo. This is despite the fact that the federal government owns, again, 79.9 percent of AIG. Media outlets like the Post and New York Times overrated the importance of bonusgate. But I think the story had, and continues to have, significance in revealing how financial firms exert power over the Obama administration — even defy the Obama administration — despite the fact that the Bush and Obama administrations bailed these firms out.

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