Wednesday, October 08, 2008

Put Them All In Jail

WASHINGTON (AP) -- Days after it got a federal bailout, American International Group Inc. spent $440,000 on a posh California retreat for its executives, complete with spa treatments, banquets and golf outings, according to lawmakers investigating the company's meltdown.

AIG sent its executives to the coastal St. Regis resort south of Los Angeles, California, even as the company tapped into an $85 billion loan from the government it needed to stave off bankruptcy.

The resort tab included $23,380 worth of spa treatments for AIG employees, according to invoices the resort turned over to the House Oversight and Government Reform Committee.
There's a reason we put criminals in jail. Because if we let them free without punishment, the odds are that they will continue to commit crimes. This is the basic premise of law enforcement. The threat of jail time (and the inevitable male rape that follows) is enough to make would-be criminals think twice about breaking the law.

The folks at AIG took money for insurance policies that they never dreamed would be paid out. They thought there was no way there would ever be massive mortgage defaults, the only scenario that would require them to pay the banks and lenders that bought the policies. Since AIG thought there was no chance that they'd ever have to pay, they treated the money they received as pure profit. They spent it on themselves: lavish bonuses, expense accounts... posh California retreats. Even though their policies promised that they'd pay banks and lenders money if mortgages went bad... they never planned for that event to ever happen. But it did. And the money they had promised to pay was no longer there. The executives had spent it all.

There's a name for someone who takes money that isn't theirs. Criminal.

These people should be thrown in jail. Embezzlement, mail fraud, jaywalking-- whatever sticks. Criminals should be punished for their crimes... not given $85 billion dollars so they can continue to throw parties for themselves.

Unfortunately, Congress continues to treat these executives as innocent bystanders, victimized by Joe Six-Packs who couldn't pay their mortgages. Make no mistake, the $700 billion dollar bailout didn't fail the first time on the House floor because it gave too much to executives. It failed the first time because it DIDN'T GIVE ENOUGH MONEY TO MEMBERS OF CONGRESS. Once the pork was added, the bill sailed through.

Until the criminals who compounded this crisis are brought to justice, they will continue the pattern of corporate irresponsibility that led to our nation's financial problems in the first place.

Unfortunately, Congress is holding hearings... when they should be demanding trials.

But what do you expect when criminals are running our government?

1 comment:

Hot Mama said...

Your excellent blog entry struck a chord with me. I have a hard time understanding why the American people are not demanding criminal investigations into the conduct of the top executives at AIG and the other companies at the center of this economic crisis. It's hard to believe that an executive who takes a 26 million dollar bonus just months before his company fails wasn't concealing the truth about company finances. I'd also like to see the stock trades made by company insiders at AIG, Washington Mutual, Bear Stearns, Lehman Brothers and the other bailed out firms in the months preceding the crash. We pilloried Martha Stewart but we don't even investigate trades made by these guys?
Approval ratings for Congress are at an all time low (unbelievably even lower than for Bush), but Americans seem never to blame their own representatives, so it is likely the whole pack of them, including Frank and Dodd, will be voted back in anyway.

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