The more accurate question is, can they be forced to return the bonuses? These were negotiated bonuses, a compulsory contractual agreement between AIG and its employees. At the same time, these bonuses could have been stopped in their proverbial tracks, but we were sold out by our elected representatives.
Oh yes, there was language in the original pork-filled stimulus bill that would have severely restricted what kind of bonuses these undeserving underperformers could have received. But behind closed doors, behind our backs, house, senate, and White House representatives stripped that language out of the bill, replacing it with what has become known as the infamous Dodd Amendment. This amendment essentially locked in bonuses already negotiated before the bailout bill was passed. Yes, congress knew this was coming, as well as the White House. When you see the “outrage” of our elected leaders over “bonus-gate”, just keep in mind it’s all phony. They knew, and they were hoping that you just wouldn’t notice. Now, they’re trying to act as if this was just some big surprise that they just became aware of. It’s a lie. They knew.
What can be done about it now? Technically, AIG could be sued, but they actually have the law on their side in this case. A contract is a contract, no matter how horrible the ramifications. There are other avenues of action that could be taken though. The almost useless congress has come up with a draconian scheme to tax those bonuses 90%. Well, that is a way to get most of the bonus money back, but the problem is that it may not be constitutional, and is also a slippery slope to other types of targeted group taxes in the future. If congress is allowed to tax these clowns, no matter how righteous it may seem right now, it will open the door for them to tax you later. Don’t think they can’t make up a reason to tax a certain group of people out of thin air. They’re trying to do it now. There is also the option of actually letting the “too big to fail” AIG fail. Bankruptcy would lead to a restructuring and those bonuses could potentially be eliminated. They are not too big to fail. AIG could also institute pay cuts to help offset the bonus money.
Then there may be the ace-in-the-hole. AIG chief executive Edward Liddy testified before congress that there have been death threats against the would be bonus recipients, and he wants to keep the names confidential. There may be ethical questions to this particular tactic, but a quid pro quo of returned bonus money for name confidentiality could be negotiated. Let’s face it, these buffoons are being rewarded for driving one of the biggest companies in the world straight into the ground, and if they had any sense of decency-or shame for that matter, they would return those bonuses and be happy they still had a job. But they’ve been operating without decency or shame for this long, why would they start now?