Harry Mitchell on the AIG bonuses and 90% tax

From an email sent out by Congressman Mitchell on Friday -

Dear Friend,

Over the past few days, I’ve heard from many of you about the excessive bonuses received by AIG executives. I share your deep anger and believe it is a slap in the face to taxpayers who have been asked to shoulder the burden of our financial crisis while many are struggling themselves to make ends meet.

Earlier this week, I joined 50 other members of Congress in calling for the Treasury Secretary to stop coddling AIG, recoup the bonuses doled out on the backs of taxpayers, and require AIG to fully disclose how it was spending its taxpayer-funded bailout.

The lack of transparency and accountability for how these funds are being used is simply unacceptable.

In January, I voted against the release of the second half - $350 billion - in funds for the Troubled Asset Relief Program (TARP) because I didn’t believe the Treasury Department provided the level of transparency, accountability, and oversight required on the first $350 billion they received late last year.

I strongly believe that if taxpayers are going to be asked to continue shouldering the burden of this financial crisis, the Treasury Secretary must provide for the increased transparency, accountability, and oversight that is long overdue.

However, I believe that yesterday’s bill, H.R. 1586, which would impose a 90% tax on bonuses received by financial institutions who received TARP funds was a knee-jerk way for Congress to address this issue. We don't even know yet if this will work, especially if some of the recipients turn out to be former AIG employees who live in foreign countries, outside the reach of our nation's tax laws.

It’s like hastily throwing a band-aid on a deep wound that continues to bleed out the trust and confidence of individuals across our country.

I believe that we must do everything we can to recoup 100% of the bonuses disbursed. Yet, Congress and the Treasury Department continue to neglect the fundamental issue of oversight and accountability when it comes to the way the TARP funds are being used. There is still no system in place to review how funds will be used moving forward or to prevent these types of bonuses and other waste or abuse from happening again.

For this reason, I co-sponsored H.R. 1577, bi-partisan legislation that would force the Treasury Department to present a plan within two weeks to recoup 100% of the bonus money paid out. Additionally, it will require the Treasury to approve any future bonuses or incentives, including any contract that includes any bonuses or incentives. Finally, and most importantly, it would prohibit any future taxpayer assistance until all the bonuses are paid back.

It is important to me to hear from you on this and I hope that this will help you have a better understanding of how I reached my decision.

Thank you for your continued input and support.

Harry Mitchell

For the record, I actually agree with this vote, and pretty much for the reasons laid out by Congressman Mitchell. I also think that there are other ways to address this issue - shareholder lawsuit (we own 80% of AIG) or criminal charges (even if the bonuses themselves are legal, people this completely motivated by greed always step over the line somewhere. Find out where and prosecute them.) No need to make new law targeting only the one group. Existing law is adequate.