Citi and AIG Didn’t Still Don’t Get It

Fox Business News has an article describing what it got in response to a FOIA request for Treasury documents on the bailout. While most of the interesting details were redacted because of attorney-client privilege, the documents do reveal the extent to which Citi and AIG were as arrogant when Treasury was negotiating this stuff as they have been in recent weeks.

While the documents lack many specifics, the broad tone conveys a sense of urgency. For instance, though the details of what specifically held up an agreement with Citigroup at the end of last year are muddy, it’s clear from the documents it dealt with compensation. What’s also clear is that government officials were amazed that, even at the eleventh hour, Citi officials still didn’t seem to understand that they would have to make concessions.

“Unbelievable,” wrote Stephen Albrecht, the counselor to the general counsel at Treasury, summing up the situation.

There was also obvious tension between AIG and the government — at least from Treasury’s standpoint. For example, an outside counsel, Marshall Huebner, an attorney at Davis Polk representing the government, was trying to clarify a meeting time for a conference call on Nov. 9. But AIG “rudely never replied to last night’s timing question,” the lawyer wrote. Another lawyer that same day said “I agree and I note that some of them do not have a sense of timeline.”

AIG’s tone appeared to be casual, even cavalier. Anastasia Kelly, executive vice president and general counsel at AIG, responding on behalf of herself and Paula Reynolds, AIG’s chief restructuring officer, told Huebner later that day: “Paula and I love you (in the most appropriate way).”

The volume of emails that cover compensation issues shows that from the very beginning, Treasury wanted to clamp down on executive pay and bonuses for workers at AIG and Citigroup. But in the end, Treasury bent (one email shows officials saying they are “trying to leave open as much flexibility as possible”), a decision that ultimately seems to have led to last week’s controversy over bonuses paid to AIG executive. [my empahsis]

Meanwhile, Obama’s still trying to get the bankers to get it. 

20 replies
  1. Ishmael says:

    From the link for Obama’s CBS interview:

    “The president also told Schieffer that, during a meeting at the White House Friday, he asked bank CEOs to “show some restraint” in their spending – especially when the financial institutions in question are recieving federal aid.”

    Seems to me that the President is putting rather too much of an emphasis on appearances than substance in terms of the bank bailouts. As Krugman said on Stephanopolous this morning, we owe the Japanese an apology for all the grief we gave them for not making their banks acknowledge that some were insolvent.

  2. PJEvans says:

    I think the only way some of them will ever get it will be for their banks to be seized (and broken up into smaller pieces, able to fail without killing economies) and for them to be fired, then investigated for fraud, embezzlement, and general incompetence in business.

    • readerOfTeaLeaves says:

      Agree completely, although antibanana makes the same point more narrowly.

      I’d say some of these asshats would probably actually be safer if the public saw charges brought against them, which would probably reduce the frustration of any nutjobs who fantasize about ‘taking the law into their own hands’.

      (I should probably watch Gran Torino, but don’t have the guts. The problem is, when people don’t see any law enforcement or charges, their sense of powerlessness and anger mounts. That makes me uneasy.)

  3. Ishmael says:

    OT, but a fascinating article by Seymour Hersh on the change in US policy towards Syria and the opportunities it provides for a Mideast peace in the New Yorker this week. Also an insight into the Cheney-Obama exchanges of late:

    “The Obama transition team also helped persuade Israel to end the bombing of Gaza and to withdraw its ground troops before the Inauguration. According to the former senior intelligence official, who has access to sensitive information, “Cheney began getting messages from the Israelis about pressure from Obama” when he was President-elect. Cheney, who worked closely with the Israeli leadership in the lead-up to the Gaza war, portrayed Obama to the Israelis as a “pro-Palestinian,” who would not support their efforts (and, in private, disparaged Obama, referring to him at one point as someone who would “never make it in the major leagues”). But the Obama team let it be known that it would not object to the planned resupply of “smart bombs” and other high-tech ordnance that was already flowing to Israel. “It was Jones”—retired Marine General James Jones, at the time designated to be the President’s national-security adviser—“who came up with the solution and told Obama, ‘You just can’t tell the Israelis to get out.’ ” (General Jones said that he could not verify this account; Cheney’s office declined to comment.)”…..rentPage=1

    • Loo Hoo. says:

      Hellhole by Atul Gawande is an excellent article too. Very important piece on how American prisons are putting so many people in solitary confinement and driving them crazy.

      No explicit reference to the analogy this has to torture in Gitmo and around the world, but it doesn’t need to be spelled out.

  4. TobyWollin says:

    “Paula and I love you…” WTF????? Definitely, definitely..these folks saw themselves as inhabiting an entirely separate dimension…they did not view their actions as having any consequences for anyone else…least of all themselves…

    • Nola Sue says:


      Did you see Matt Taibbi’s response to AIGFPer Jake DeSantis’ resignation letter in the NY Times?

      He points out how much this letter whine illustrates how very much they don’t get it. It is WELL worth the read. Taibbi’s voice on this is like rain ending a drought.

    • ShotoJamf says:

      “..these folks saw see themselves as inhabiting an entirely separate dimension…they did do not view their actions as having any consequences for anyone else…least of all themselves.”

      Fixed it for you.

  5. PJEvans says:

    Also in another dimension and not getting it: the LA Times editorial against EFCA, which claims it will eliminate the secret ballot.

  6. acquarius74 says:

    Maybe the AIG and CITI paychecks should be stamped: Welfare Payment, from the Department of the Dole, for Inferior Work Product gambling losses.

    • MarkH says:

      Maybe the AIG and CITI paychecks should be stamped: Welfare Payment, from the Department of the Dole, for Inferior Work Product gambling losses.

      Tough love!

  7. Radix says:

    They don’t get it because they don’t have to. What’s the downside for them? They loose their jobs, forcing them to live off their millions? Unlike the autoworkers, who have to keep working to survive, these folks’ survival isn’t in question. So they play hardball, they have everything to gain and not much to lose.

  8. Eureka Springs says:

    Perhaps GM should bring back the Cavalier.

    I’m just sitting here waiting on the public to realize Obama’s only hope is if he is met by a loud and angry mob of his supporters… and finally responds appropriately.

    • frandor55 says:

      Exactly, ES.
      More and more of Obama’s progressive supporters are seeing him taking a right-center tack and they need to let him know it ain’t the way to go.

    • ShotoJamf says:

      I’ve already crossed the threshold. I’m now referring to Obama as “Bush Lite”. He’s going to have to prove otherwise before I change that moniker.

  9. antibanana says:

    The only thing that is going to change the attitudes of highly compensated Wall Streeters is when a subtantial number of them face criminal sanctions. I don’t think that is going to happen anytime soon.

  10. Leen says:

    Obama/Afghanistan “this is going to be hard” “this is not going to be easy”

    Sure is sounding a great deal like someone else we used to know.

    Over at Democracy Now (am unable to link)

    Afghans Urge Obama to Send Aid, Not Troops, to Afghanistan

    President Obama is expected to unveil a revised Afghanistan strategy Friday that will focus on expanding and improving the Afghan national police force. The revised policy is also expected to send more US troops to counter the Taliban’s expanding influence in the southern part of the country. We speak with Pratap Chatterjee of CorpWatch, who recently traveled to Afghanistan. [includes rush transcript]

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