[Congressional Bills 111th Congress]
[From the U.S. Government Publishing Office]
[H. Con. Res. 76 Committee Discharged House (CDH)]
111th CONGRESS
1st Session
H. CON. RES. 76
Expressing the sense of the Congress regarding executive and employee
bonuses paid by AIG and other companies assisted with taxpayer funds
provided under the Troubled Assets Relief Program of the Secretary of
the Treasury.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
March 19, 2009
Ms. Kilroy (for herself, Mr. Van Hollen, Mr. Hall of New York, Mrs.
Dahlkemper, Mr. Heinrich, Mr. Loebsack, Mr. Boccieri, Mr. Carson of
Indiana, Ms. Castor of Florida, Mr. Cohen, Mr. Connolly of Virginia,
Ms. Fudge, Mr. Griffith, Mr. Massa, Mr. McNerney, Mr. Nye, Mr.
Perriello, Mr. Rodriguez, Mr. Schauer, Ms. Sutton, Ms. Titus, Mr.
Welch, Mr. Wilson of Ohio, Mrs. Halvorson, and Mr. Moore of Kansas)
submitted the following concurrent resolution; which was referred to
the Committee on Financial Services
March 19, 2009
The Committee on Financial Services discharged; considered and failed
of adoption
_______________________________________________________________________
CONCURRENT RESOLUTION
Expressing the sense of the Congress regarding executive and employee
bonuses paid by AIG and other companies assisted with taxpayer funds
provided under the Troubled Assets Relief Program of the Secretary of
the Treasury.
Whereas the Chairman of the Federal Reserve, Ben Bernanke, said in testimony to
Congress on March 3, 2008: ``If there is a single episode in this entire
18 months that has made me more angry, I can't think of one, than AIG.
AIG exploited a huge gap in the regulatory system; there was no
oversight of the financial products division. This was a hedge fund
basically that was attached to a large and stable insurance company,
made huge numbers of irresponsible bets, took huge losses. We had no
choice.'';
Whereas, on March 15, 2009, Chairman Bernanke said on the news program ``60
Minutes'' that ``we must address the problem of financial institutions
that are deemed too big--or perhaps too interconnected--to fail. Given
the highly fragile state of financial markets and the global economy,
government assistance to avoid the failures of major financial
institutions has been necessary to avoid a further serious
destabilization of the financial system, and our commitment to avoiding
such a failure remains firm.'';
Whereas the Treasury and the Federal Reserve have committed almost $200 billion
in various forms of taxpayer assistance to AIG for the company's
liquidity shortages, the purchase of certain assets, and to dispose of
other assets for an orderly wind-down of the company;
Whereas the commitment of almost $200 billion in taxpayer assistance represents
one of the largest Federal government rescues of a single private
corporation in United States history;
Whereas the Federal Reserve has committed tens of billions of taxpayer dollars
in a combination of facilities to purchase AIG's mortgage-backed
securities and liabilities tied to collateralized debt obligations;
Whereas the Federal government has taken a 79.9 percent stake in AIG in exchange
for providing financial assistance extending credit;
Whereas, under the Emergency Economic Stabilization Act of 2008, the Bush
Administration and the Obama Administration have provided AIG with
access to $70 billion in direct capital infusions, which in turn have
been used, in part, to cover AIG's collateral for positions taken by the
company in unregulated and risky credit default swaps;
Whereas AIG's Financial Products division's irresponsible practice of not
setting aside sufficient capital to cover its exposure on more than $1
trillion of complex financial products, including credit default swaps,
have threatened the stability of the financial system and resulted in
substantial losses to the company, to pensioners, to investors, and
ultimately to the taxpayer;
Whereas, despite the irresponsible actions of AIG executives that threatened the
company as a going concern, and exposed taxpayers to almost $200 billion
to cover losses from excessive risks, these executives will receive
hundreds of millions of taxpayer money in retention payments and bonuses
for performance in 2008 and 2009;
Whereas, in a letter to Treasury Secretary Geithner, AIG CEO Edward Liddy said
that ``AIG also is committed to seeking other ways to repay the American
taxpayers for AIG Financial Products retention payments.'';
Whereas, in the same letter, Liddy said that ``AIG's hands are tied. Outside
counsel has advised that these [retention payments] are legal, binding
obligations of AIG, and there are serious legal, as well as business,
consequences for not paying. Given the trillion-dollar portfolio at AIG
Financial Products, retaining key traders and risk managers is critical
to our goal of repayment [to the taxpayer].'';
Whereas the appropriate committees in the House of Representatives and the
Senate have already convened hearings to examine the sizable government
assistance provided to AIG, and the House Financial Services Committee
has focused its oversight on the excessive compensation provided AIG's
executives and employees, among other matters;
Whereas common sense dictates that a company such as AIG that was so mismanaged
as to threaten the stability of the financial system of the Nation and
that requires billions of dollars of taxpayer money for its survival
should not reward that mismanagement through lavish bonuses; and
Whereas, on March 15, 2009, President Obama stated: ``In the last six months,
AIG has received substantial sums from the U.S. Treasury. I've asked
Secretary Geithner to use that leverage and pursue every legal avenue to
block these bonuses and make the American taxpayers whole'': Now,
therefore, be it
Resolved by the House of Representatives (the Senate concurring),
That it is the sense of Congress that the President is appropriately
exercising all of the authorities granted by Congress under the
Emergency Economic Stabilization Act of 2008, and any other Federal
law, by taking all necessary actions to ensure that--
(1) in the absence of a voluntary decision by AIG employees
and executives to forego their contractual retention bonuses,
AIG will repay taxpayers for the hundreds of millions of
dollars the company provided to executives and employees in
retention bonuses;
(2) going forward, companies that receive a capital
infusion under title I of the Emergency Economic Stabilization
Act of 2008 that the Secretary of the Treasury deems necessary
to restore liquidity and stability to the financial system of
the United States are prohibited from providing to executives
and employees unreasonable and excessive compensation payments
that are not directly tied to performance measures, such as
repayment of the companies' obligations to the taxpayers,
profitability of the company, adherence to appropriate risk
management, and transparency and accountability to
shareholders, investors, and taxpayers; and
(3) companies that receive a capital infusion under title I
of the Emergency Economic Stabilization Act of 2008 that the
Secretary of the Treasury deems necessary to restore liquidity
and stability to the financial system of the United States are
complying with the letter of the provisions included in the
American Recovery and Reinvestment Act that strengthen
executive compensation restrictions for recipients of capital
infusions, such as limiting base salaries for executives to no
more than $500,000 per year, banning golden parachutes,
limiting bonuses for executives, requiring shareholders to
approve pay packages, requiring executives to certify they are
meeting the law's restrictions, requiring a company-wide policy
on luxury expenditures, and prohibiting compensation on the
basis of excessive risks that threaten the viability of such
companies, and adhering to all executive compensation
guidelines the Secretary of the Treasury may establish.
<all>