Cuomo vs. A.I.G.: Round One
Last week we reported on the $440,000 party thrown by A.I.G. This week, we are happy to say that New York attorney general Andrew M. Cuomo, is demanding that A.I.G. recover bonuses and other payments from its former executives.
It’s about time. All of these greedy criminals who got us into this mess should be fined, taxed, and made to pay for the damage they have caused. The excess of corporate America is coming to light—like a blinding train wreck—it makes you sick but you can’t look away.
Cuomo cited “unwarranted and outrageous expenditure” as being contrary to New York law. In the letter, parties, golf outings and overseas hunting trips were mentioned. He is demanding recovery of multi-million dollar payments to Martin Sullivan, A.I.G.’s former chief executive, and Joseph J. Cassano, the man who ran A.I.G. Financial Products (blamed for the losses that almost brought on the company’s collapse). If A.I.G. refuses to recover these exorbitant bonuses he says his office can bring civil charges.
The Treasury Department has made it clear that it will limit the amount top executives of bailout companies get paid. The question is: how much? Maybe the Treasury Department should take the medium income in America and base their salaries on that. They can have a former executive “fire sale” and sell off their fancy cars and fancy homes to raise money. The American public should be pissed—really, really pissed.
“The board awarded its chief executive officer a cash bonus of over $5 million and a golden parachute worth $15 million,” Mr. Cuomo wrote in his letter to the A.I. G. board. “Similarly, in February 2008, a top-ranking executive who was largely responsible for A.I.G.’s collapse was terminated, but still permitted by the board to keep $34 million in bonuses. This same individual apparently continued to receive $1 million a month from the company until recently.”
A.I.G. noted that it has received the letter and will cooperate. Mr. Cuomo will have to prove that the A.I.G. executives were paid millions of dollars but did not provide a service worth the money. I think all of America can agree with that.
Many Students Delaying Higher Education Due to Lack of Funds
A new study of over 2,500 prospective college students nationwide indicates that the economic downturn is dramatically affecting enrollment with many having to delay academic plans or set their sights on less prestigious colleges.
• 16% of surveyed students said they are now putting their college searches on hold because they don’t think their families will be able to pay for college
• 57% said they are now considering a less prestigious college due to affordability
• 85% said they have increased time spent searching for scholarship money or merit aid programs to help pay for tuition, and just over half said they were depending on financial aid
• 48% said they are more concerned than ever about being able to afford any college at all
• 64% are very concerned about finding a job after college
• Some students said they were choosing a school close to home to save on fuel and housing costs, or changed their focus from a four-year college to a two-year college for financial reasons
The study was conducted by MeritAid.com, a new, free Internet service that provides data on over 2,000 colleges and over $11 billion in merit scholarships nationwide. The students surveyed revealed some emerging trends resulting from skyrocketing tuition costs combined with the plummeting economy.