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Declan McCullagh on AIG
From: David Farber <dave () farber net>
Date: Wed, 18 Mar 2009 08:10:05 -0400



Begin forwarded message:

From: Declan McCullagh <declan () well com>
Date: March 18, 2009 12:01:16 AM EDT
To: dave () farber net
Cc: amplubell () yahoo com, sethb () panix com
Subject: Re: [IP] Lawyesr Gone Wild and the Board of Directors was Where Exactly?

Dave,

The AIG mess includes a number of serious oversights and bipartisan political failures:

* AIG received four taxpayer bailouts to date, the most recent under the Obama administration. As far as we know, even though the Treasury owns 80 percent of AIG, the current administration levied no accountability/transparency demands. (If that was the case, the documents have not been made public.)

* A bipartisan chorus of politicians last fall, including the Bush administration and Sen. Chuck Schumer, claimed that an AIG bailout was necessary to avoid "catastrophic" damage to the financial system. But those claims have now been called into question. The list of AIG's counterparties was finally made public a few days ago; that list shows (a) tax dollars were funneled to in large part European banks and (b) the possible damage to counterparties measured by actual payments:
http://www.aig.com/aigweb/internet/en/files/CounterpartyAttachments031509_tcm385-153015.pdf

* AIG has continued to raise alarums in secret presentations to regulators as recently as last month that used phrases like "potentially catastrophic unforeseen consequences," "retirement savings significantly at risk" and "a loss of confidence in the private pension system in the U.S." Those presentations have never been made public by the current administration:
http://www.washingtonpost.com/wp-dyn/content/article/2009/03/09/AR2009030902806.html

Now we have the odd -- but, perhaps, welcome -- spectacle of Congress threatening to change tax law so the bonuses are taxed at a rate of 100 percent:
http://www.ft.com/cms/s/0/9600d072-1315-11de-a170-0000779fd2ac.html?nclick_check=1

There's no reason this process has to take place in such secrecy, behind closed doors, which invites special-interest lobbying, and which has the practice of both the Bush and Obama administrations.

I've covered this in more detail in my CBS News column:
http://cbsnews.com/stories/2009/03/04/politics/otherpeoplesmoney/main4842207.shtml
http://cbsnews.com/stories/2009/03/11/politics/otherpeoplesmoney/main4858348.shtml

-Declan



David Farber wrote:
Begin forwarded message:
From: ann marie plubell <amplubell () yahoo com>
Date: March 17, 2009 5:33:59 PM EDT
To: dave () farber net
Subject: Lawyesr Gone Wild and the Board of Directors was Where Exactly?
Dave,
I am stunned and thrown back into a reverie about my chosen profession. “Outside counsel has advised that these are legal, binding obligations of AIG, and there are serious legal, as well as business, consequences for not paying.” (Source Liddy letter to Geitner, March 14, 2009) Could it be a firm as excellent as Weil Gotshal rendered this advice? http://www.weil.com/news/newsdetail.aspx?news=37241 It seems odd that they would fall prey to a textbook-worthy example of lawyering based on what the client says is the desired outcome versus desired lawyering which identifies the options and leaves business judgment (in the AIG case-to determine whether to pay or to challenge payment) to the individuals tasked with exercising that judgment-the board of directors-the record of that decision properly documented in the minutes of a special meeting to consider the matter. Where the hell was the Board at any point in this sorry saga anyway? There is no contract that cannot be renegotiated or the grounds of making it subject to challenge. Contracts 101.
Ann Marie
Ann Marie Plubell JD, LLM, MBA
The Plubell Firm LLC "East-West Business Bridge"
3429 Quebec Street NW, Washington, DC 20016 USA
202-537-1982 US   Beijing mobile (011-86) 13651149091
ann.marie () erols com  www.plubellfirm.com
http://www.linkedin.com/pub/b/375/b65
From: David Farber <dave () farber net>
To: ip <ip () v2 listbox com>
Sent: Tuesday, March 17, 2009 3:35:15 PM
Subject: [IP] Re: Sen. Charles Grassley suggested AIG executives should take a Japanese approach
Begin forwarded message:
From: "David S. Isenberg (isen)" <isen () isen com>
Date: March 17, 2009 1:42:44 PM EDT
To: David Farber <dave () farber net>, rjr () rjriley com
Subject: Re: [IP] Sen. Charles Grassley suggested AIG executives should take a Japanese approach
Ronald,
The point is acknowledgement of the misdeed by the
actor, and only secondarily punishment. Significantly,
it is self-punishment.
In contrast, we have these guys who actually believe
that because a contract exists, they deserve rewards
regardless of what they've done.
What Grassley seems to want to change is the actors'
states of self-awareness.
David I
------------------
203-661-4798 (main number, follows me everywhere)
888-isen.com (toll free)
508-548-5924 (Woods Hole)
AIM, Skype, Y!IM: david_isenberg
http://isen.com/blog
http://freedom-to-connect.net
------------------
On Mar 17, 2009, at 10:12 AM, David Farber wrote:
>
>
> Begin forwarded message:
>
> From: "Ronald J Riley \(RJR Com\)" <rjr () rjriley com>
> Date: March 17, 2009 10:09:15 AM EDT
> To: <dave () farber net>
> Subject: Sen. Charles Grassley suggested AIG executives should take a Japanese approach
>
>
>
> IOWA CITY, Iowa - Iowa Sen. Charles Grassley suggested on Monday that AIG executives should take a Japanese approach toward accepting responsibility for the collapse of the insurance giant by resigning or killing themselves.
>
> More: http://www.msnbc.msn.com/id/29733519/
>
> Or how about we bring back old fashioned tar and feathering J
>
> Ronald J Riley
>
> Archives
>
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