AIG Reneges On Promise To Return Bonuses...Where Geithner?

AIG Executives' Promises To Return Bonuses Have Gone Largely Unfulfilled


When word spread earlier this year that American International Group had paid more than $165 million in retention bonuses at the division that had precipitated the company's downfall, outrage erupted, with employees getting death threats and President Obama urging that every legal avenue be pursued to block the payments.

New York Attorney General Andrew M. Cuomo threatened to publicize the recipients' names, prompting executives at AIG Financial Products to hastily agree to return about $45 million in bonuses by the end of the year.

But as the final days of 2009 tick away, a majority of that money remains unpaid. Only about $19 million has been given back, according to a report by the special inspector general for the government's bailout program.

Some of the employees who had offered to return their bonuses have instead left the company, taking their cash with them.

Others remain at Financial Products but are also holding on to their money until they see what Kenneth R. Feinberg, the Obama administration's "compensation czar," decides about whether they should get future bonus payments they have also been promised. Feinberg, AIG and government officials have been involved in ongoing negotiations over the status of past and future bonuses at the insurance giant.

Dozens of employees have hired lawyers, bracing for a fight if AIG or government officials try to block the payments.

Cuomo has said little publicly in recent months about the AIG bonuses. On Tuesday, his office had no comment when asked about the payments.

When the controversy erupted in March, Cuomo agreed to keep the employees' identities secret as long as a significant share of the money was returned to the company. Some of them said his demand amounted to blackmail. But AIG officials said at the time that at least 18 of firm's top 25 executives had agreed to return at least some of their bonus money. "We are deeply gratified that a vast majority of FP's senior leadership have expressed a willingness to forsake their recent retention payments," the company said.

But now, the government, AIG and the employees are on a collision course. Everyone is keenly aware that another round of retention payments at Financial Products is due soon, threatening to draw public attention to the issue once again. AIG is scheduled to pay out an additional $198 million to employees in March.

"They have a contractual right to be paid this money. They put in their time, and they have performed all their obligations successfully." said Andrew Goodstadt, a New York lawyer who represents more than a dozen Financial Products employees. "They're willing to assert their contractual rights in a court of law. They have extremely strong claims."

Goodstadt said his clients include computer systems specialists, mathematicians and other employees who did not have a hand in the risky credit derivatives that brought the firm down. Rather, he said, many employees who remain at Financial Products have worked to unwind the troubled trades on its books and protect the massive taxpayer investment in AIG, whose total rescue package peaked at more than $180 billion in capital and loans.

They stuck around, he said, in large part because of the company's promise of the retention payments. In addition, Goodstadt emphasized that the company told employees in March that their offers to return bonus payments were voluntary and nonbinding.

One former Financial Products executive said some of his colleagues had stayed with the company only because they expected to receive bonus payments this coming March. After that, he said, they will have "no reason at all" to stay. "There's no more carrot," he said.

A resolution to the bonus controversy has been bedeviled by a growing lack of trust between AIG employees and the government.

Financial Products employees say they were on the brink of an agreement earlier this year that would reduce the total amount of money due in 2010 and spread those payments out over time to avoid the scrutiny that would come with a large, lump-sum payment. But they claim Feinberg scrapped that plan after he was appointed in June and urged AIG to find a way to significantly scale back the upcoming bonus payments.

People familiar with recent discussions between Feinberg and executives at AIG, including face-to-face talks with chief executive Robert H. Benmosche, said Feinberg has insisted that Financial Products employees return the money they said they would before he signs off on any deal involving 2010 compensation.

"Feinberg is adamant those pledges be honored," said one of the people. "It's non-negotiable."

They also said he has continued to urge that the amount of money due in March 2010 be reduced.

"I don't know how they resolve it now. There's no trust there," said one Financial Products executive, who, like others, spoke on the condition of anonymity because of the sensitivity of the payments. "In order to negotiate, there has to be good faith and trust, and the government has shown those two things don't exist with them."

AIG declined to provide official comment, but company officials have previously argued that it is essential to keep employees at Financial Products. While the most disastrous and risky deals have been purged from the books, AIG officials say a mass exodus of employees from the division could still wreak havoc and end up harming the government's nearly 80 percent stake in the company.

AIG said in an October statement that it was working through various compensation issues with Feinberg, "including future payments to employees of AIG Financial Products." The company noted that Financial Products employees "have until the end of the year to fulfill their commitments to return a portion of their March 2009 payment. We expect FP employees will honor their commitments."



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Sources: Washington Post, AIG, Wikipedia, Google Maps

Obama's Pay Czar Continues Slashing Exec Pay...More Politics

Regulating banker pay. Robert Miller, professor of the Tepper School of Businesss at Carnegie Mellon, and James Batson, an attorney at Liddle & Robinson, argue against the Pay Czar's new compensation regulations.

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"Pay Czar" Kenneth Feinberg caps pay of mid level executives


The nation’s “pay czar” is at it again Friday, and this time, midlevel executives at bailed-out firms are getting a pay cut.

Fewer than 10 of 450 employees will be allowed to earn more than $500,000 per year, according to a source familiar with the plan, which covers six firms that received federal bailout funds.

Kenneth Feinberg, the special master for TARP executive compensation, will release the next phase of his determinations about pay for those executives Friday, and he’s expected to take a tough stance.

In October, Feinberg slashed pay for the first 25 most highly compensated employees at the TARP firms, prompting complaints from critics that the companies were being put at a competitive disadvantage for attracting and keeping top talent. Now Feinberg will issue pay rulings on employees 26 through 100 at the six companies

The source said executives who wanted to earn more than a half-million dollars had to demonstrate to the special master that there was an exceptional reason for the pay. But it’s likely that employees in the 26-100 group at Chrysler and Chrysler Financial will be exempt from the latest round of salary cuts because none of them earned more than $500,000.

Negotiations over the stringent pay measures may be one reason why several banks have been eager in recent days to pay back the government and free themselves from Feinberg’s authority. Bank of America sent the federal government a check for $45 billion this week, completing its withdrawal from the TARP program. And Citigroup is in negotiations with government officials over how it will be allowed to exit as well.

Feinberg, a Washington attorney best known for his work deciding compensation for victims of the Sept. 11 attacks, was appointed earlier this year by the Obama administration.

The new rules apply to six companies: Citigroup, American International Group, General Motors, Chrysler, Chrysler Financial and GMAC. Under the Emergency Economic and Stabilization Act, the special master has a mandate to review all forms of compensation for the top 100 highly compensated employees at the firms that received “exceptional” TARP assistance.


Sources: Politico, CNBC

Obama's "Too Big To Fail" Bill Coming Monday

(Volcker: Risk of "too big to fail" remains. Paul Volcker, former Fed chairman, testifies to the House Financial Services Committee on the issue of Systemic Risk and the best way to deal with it.)

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New US bill on "too big to fail" fix seen Monday


The Obama administration plans to unveil on Monday a new plan for dealing with troubled financial giants, said a senior U.S. lawmaker, who also mentioned potentially big changes for the insurance industry.

Barney Frank, chairman of the House Financial Services Committee and a chief architect of the financial regulation overhaul, declined on Friday to give details on the administration's new bill, which would give the government the power to dismantle large financial companies that get into crises.

The new draft bill is expected to take a tougher stance toward troubled financial firms than the administration's original plan, and may take out some language that would allow for temporary bailouts.

Giving the government "resolution authority" would serve as a rebuttal to the concept that some firms are too big to fail. Federal Reserve Chairman Ben Bernanke on Friday highlighted the need for this authority as well as other measures to reduce the likelihood that one firm could destabilize the financial system.

Frank also said Congress is discussing whether to create an optional federal charter for insurers.

Insurance companies are currently regulated by the states.

"If we do get into national chartering it will be in life insurance ... and maybe large commercial entities," Frank said during remarks to a banking symposium.

He said lawmakers would not likely try to federally regulate property and casualty insurers, however.

NO SUPER BANK COP

Frank's committee has cranked its efforts to overhaul financial regulation into high gear in recent days.

On Thursday it voted to approve legislation that would create a federal financial consumer watchdog. It has also passed new rules to police over-the-counter derivatives like the credit default swaps that helped fuel the financial crisis, and the full House has approved efforts to curb abusive pay practices.

While Frank's committee has made significant headway, the reform effort faces an uncertain future in the Senate and may be pushed into next year.

One idea that does seem to be gaining steam in the Senate is the move to consolidate all federal banking supervision into one super agency. Currently, four regulators share responsibility.

Christopher Dodd, chairman of the Senate Banking Committee, is a leading advocate of the consolidation, and has said he will push it forward despite regulators' reservations.

Frank, however, does not think it will pass.

"There is no remote chance of it happening," he said.

He said lawmakers will likely merge the Office of Thrift Supervision and the Office of the Comptroller of the Currency, but allow the Federal Reserve and the Federal Deposit Insurance Corp to keep their supervisory roles.

Frank also commented on the rulings of pay czar Kenneth Feinberg, who on Thursday slashed compensation for many of the top earners at seven firms that have received billions of dollars in taxpayer funds.

"I think he did a good job," he said.

On the same day that Feinberg released his rulings for the seven firms, the Federal Reserve revealed its own pay guidelines to encompass a larger chunk of financial firms.

The Fed's bank pay guidelines, while not specific, are designed to curb forms of compensation that entice employees to take large risks.

Frank said the Fed's guidelines should have a large impact and said Congress is working to finalize legislation that would clarify that the Fed does have the authority to closely police pay.



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Sources: Reuters, Huffington Post, MSNBC, CNBC, Zimbio, Google

Companies Fear Pay Cuts Will Create CEO Talent Flight ...What About The Unemployed??

(BOFA balks at Exec pay cuts.)

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(The US Treasury Department on Thursday ordered 7 companies that received billions of dollars in government bailouts to halve total compensation for their top executives.)



(Is the White House to blame for excessive Exec pay?)

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Limits on exec pay cause worries of brain drain

The Obama administration's decision to cut the pay of top executives at companies on taxpayer life support will help quiet the popular outrage over excessive compensation. But it introduces a new concern: brain drain.

The 175 executives targeted by "pay czar" Kenneth Feinberg are not only the highest-paid but also considered among the most talented and productive. And competitors outside the restrictions are likely to woo them, recruiters and compensation expects say.

Losses like that could be devastating to the very companies the government spent so much money to save.

"These people are considered the brains of the machine. They are who can pull you through the tough times," said Steven Hall, who runs an executive compensation firm that bears his name. "This will give them reason to leave."

Feinberg announced Thursday that he has ordered seven companies that have received billions of dollars in taxpayer money to slash the base salaries of their top executives by an average of 90 percent and cut total compensation — cash, stock and perks — in half.

That applies to the five top executives and the next 20 highest-paid employees at Bank of America Corp., American International Group Inc., Citigroup Inc., General Motors, GMAC, Chrysler and Chrysler Financial.

Another 525 employees at the companies will also face new curbs on pay from Feinberg, but those details have not yet been released.

Those facing pay restrictions outside the executive suite hold leadership positions in areas like finance and investment banking at the banks, and in manufacturing, brand management and design at the auto companies.

They come with years of experience, whether it's making deals or overseeing car design. For example, Ford Motor Co., which is in far better shape than its two Detroit rivals, could lure auto executives who would be difficult for Chrysler and GM to replace.

"There will be a fallout," said Janice Reals Ellig, co-CEO of the executive search firm Chadick-Ellig. "Talent that is short-term-focused because they have big mortgages, college education payments and other things will feel more pressure to leave."

Feinberg, in speaking engagements over the last month, acknowledged the difficulty of balancing "conflicting principles" on pay: Compensation needed to be high enough to attract talent without rewarding risk.

But he also has to deal with Americans angry that their tax dollars have been used to save these companies. The Obama administration has blamed misplaced compensation incentives as one cause of the financial crisis.

Feinberg will limit cash salaries to $500,000. Executives who had been guaranteed certain compensation will have those payments made in company stock to be held over the long term.

Most other pay will also have to come in long-term stock awards, and executives won't be able to sell that stock until the company repays its bailout money. Incentive stock awards can only be paid if executives stick around for three years and the company pays back the government.

Feinberg also gets to sign off on any performance goals used as incentives.

The pay restrictions for all seven companies will also require any executive seeking more than $25,000 in special benefits — things such as country club memberships, private planes and company cars — to get permission for those perks from the government.

Feinberg did say exceptions were made "where necessary to retain talent and protect taxpayer interests." Base salaries above $1 million were approved for the new CEO of AIG, and for two employees of Chrysler Financial.

Under a package approved by Feinberg over the summer, AIG CEO Robert Benmosche will get a pay package of about $10.5 million.

Competitors of all seven companies that have repaid bailout money are free to pay whatever they want — although the Federal Reserve did propose Thursday to monitor executive pay at thousands of banks.

Goldman Sachs, which paid back its $10 billion in government bailout funds in June, has set aside $16.7 billion for compensation and benefits so far this year, on track for a record.

"People who produce the top revenues will always be in demand. They will always be wanted," said recruiter Danny Sarch, president of Leitner Sarch Consultants in White Plains, New York. "That's just capitalism."


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Sources: MSNBC, CNBC, NY Times, AP, CNBC, Youtube, Google Maps

White House Pay Czar Slashes Pay For Wall Street Execs...Its About Time

(Scolding Wall Street: The president calls for finance executives to help out with reform on Wall Street during a fundraising trip to New York City. NBC’s Savannah Guthrie reports.)

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White House slashes pay for Wall Street executives


The Obama administration stunned Wall Street on Wednesday by ordering massive pay cuts for top executives at seven financial firms that still hold billions in U.S. government bailout funds.

The move – which would lower average cash compensation by 90 percent — means the administration is making a frontal assault on Wall Street’s gold-plated compensation culture at a time of growing public anger over the firms’ massive pay and bonuses.

And the plan by pay czar Kenneth Feinberg comes in a week in which the White House has been increasingly aggressive in calling on Wall Street to stand down in its opposition to its regulatory reform proposal for the financial industry.

At the seven firms, total average compensation for many executives would be cut in half, according to an administration official. At AIG, no top executive will receive more than $200,000 in total compensation – a humbling comedown for the once high flying insurance executives at the firm.

Along with AIG, the firm affected are Citigroup, Bank of America, General Motors, Chrysler and the financing arms of the two automakers, GMAC Financial Services and Chrysler Financial.

The news came on a day in which President Barack Obama said big Wall Street banks no longer need federal help – signaling he plans to wind down the $700 billion Troubled Asset Relief Program and tighten the screws on the companies that remain inside it.

The development, first reported by the New York Times, caught the financial industry by surprise. On K Street, financial lobbyists were scrambling to figure out what exactly the plan meant for their clients, and how best to respond to it.

“I don’t think that’s healthy, and I don’t like it,” said Camden Fine, president of the Independent Community Bankers of America. “These are decisions for boards of directors to make, not the government. I think this is a very slippery slope.”

And the announcement also prompted concern in the auto industry that car makers are being swept up in the administration’s attempt to squash Wall Street’s high living.

Auto officials cautioned that they want to see an official proposal before responding in detail. “We are currently in discussions with Mr. Feinberg's office regarding executive compensation,” said Greg Martin, the director of policy and Washington communications for General Motors. “We will have further information and comments once those discussions have concluded.”

One longtime critic of steep executive pay praised Feinberg’s move.

“We commend the pay czar and the administration for telling the people who crashed the economy that they need to make the same sacrifices main street and real America have been forced to take on as a result of the economic crisis,” said Dan Pedrotty, director of the AFL-CIO Office of Investment. “The American people are fed up with watching Wall Street play by a different set of rules and pretend like the economic crisis which they created is for everyone else to suffer through and not them.”



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Sources: Politico, MSNBC, Google Maps

Ken Lewis, Other Bank CEOs Living Phat Off Tarp Funds!...Whitehouse Where's The Reform??

(Filling the loopholes. An analysis by the Washington Post found that even as the nation’s biggest banks were taking taxpayer dollars, they were boosting executive perks and benefits for CEO's like Bank of America's Kenneth D. Lewis.)

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(Congresswoman Maxine Waters Questions Bailed Out CEOs.)






At rescued banks, perks keep rolling

Even as the nation's biggest financial firms were struggling and the federal government was spending hundreds of billions of dollars to save many of them, the companies as a group were boosting the perks and benefits they pay their chief executives.

The firms, accounting for more $350 billion in federal bailout funds, increased these perks and benefits 4 percent on average last year, according to an analysis of corporate disclosures filed in recent months.

Some chief executives, such as Kenneth D. Lewis of Bank of America and Jeffrey M. Peek of CIT Group, the major small-business lender now on the brink of bankruptcy, each received about $100,000 more than a year earlier for personal use of corporate jets. Others saw an increase in the value of chauffeured services, parking or personal security.

Ralph W. Babb Jr., chief executive of Dallas-based lender Comerica, was compensated for a new country club membership, with an initiation fee and dues of more than $200,000. GMAC Financial Services chief executive Alvaro de Molina benefited from a $2.5 million payment from his company to help cover his personal tax bill.

Government scrutiny

"You would have thought that this would be the moment when everyone said, 'Okay, the perks have got to stop -- at least while we're indebted to the government,' " said Paul Hodgson, senior research associate at the Corporate Library. "But that didn't happen."

This year may turn out to be different. In June, the Treasury Department prohibited companies receiving bailout funds from reimbursing senior executives for their personal tax payments.

In the meantime, Kenneth R. Feinberg, the Obama administration official assigned to set pay for top executives at seven of the companies receiving the most help, plans to curtail perks such as country club fees when he rules on compensation later this month, according to people familiar with the matter. Perks worth more than $25,000 are getting particular scrutiny from Feinberg.

On average, the chief executives at 29 of the largest public financial companies that have taken bailout funds received perks and benefits worth more than $380,000 in 2008, according to compensation figures included in annual proxy statements and supplied by Equilar, a compensation data services firm. Individually, about half the banks increased their fringe benefits to the top executives. The figures do not include relocation costs and related taxes, typically one-time fees that can skew year-over-year comparisons.

In contrast to the 4 percent average increase in perks and benefits at these companies, the average awarded to top executives at non-financial companies in the Fortune 100 declined by more than 7 percent over the same period, according to Equilar.

Personal use of corporate aircraft and "gross-ups" -- when the company pays taxes due on bonuses or other benefits -- represented more than half of the $11 million in non-cash pay awarded to the 29 chief executives in 2008. Among the more common perks were company cars and drivers, as well as personal financial and tax-planning services.

Although perks represent a relatively small portion of an executive's overall compensation package, they have been targeted some shareholders who argue that these fringe benefits are meant largely to stroke the egos of top company brass.

"These executives are already well compensated," said Daniel Pedrotty, director of the AFL-CIO's office of investment. "The notion that some of these folks can't even leave a nickel on the floor, that they want to take every last dime and put it on the company card really rubs people the wrong way but points to a larger problem of lack of independence at the board."

Fewer perks, more pay

Some banks, mindful of the popular resentment over the government's $700 billion bailout of banks and other financial companies, have eliminated certain perks. And a few executives have voluntarily given up benefits that lawmakers have criticized as excessive. At Bank of America, for instance, senior executives will no longer use corporate jets for personal travel starting this year, a bank spokesman said.

Still, some companies that have taken away perks are making it up to executives by boosting their pay. SunTrust Banks eliminated most executive perks in 2008, including financial planning services, club memberships and payment of taxes on the perks, according to a corporate filing. But the bank also noted that "base pay increases were made in 2008 to offset this reduction in perks."

A spokesman for SunTrust, a recipient of $4.9 billion in government funds, said in an e-mail that the bank seeks to "maintain an executive compensation framework that is competitive, appropriate and consistent with industry practice, and we periodically make adjustments in line with that goal."

Corporations have long defended perks as necessary for attracting and retaining talented executives. They also say some perks -- corporate jets and chauffeured drivers, for example -- are provided for security and to ensure that executives can work efficiently. In fact, it is not uncommon for companies to mandate that their chief executive use the corporate jet and car for all travel. American Express is one such company. Last year, it provided its chief executive, Kenneth I. Chenault, with $415,000 in corporate jet travel for personal reasons, as well as $201,000 for a home security system and $46,000 for security during personal trips.

A spokesperson for American Express declined to comment. The company's proxy statement says it eliminated tax gross-ups as of 2008.

GMAC said it had stopped using its corporate aircraft altogether after receiving a federal bailout in late 2008 and that de Molina, its chief executive, had declined a year-end bonus for 2008. He did receive a nearly $6 million award earlier in the year, however, and GMAC covered the taxes due on that bonus.

De Molina, a former executive at Bank of America who arrived at GMAC in 2007 and became its chief executive in April 2008, was "instrumental in leading the company through an incredibly challenging period and successfully executed a series of actions to stabilize the company," said Gina Proia, a company spokeswoman.

CIT, which cut its staff by 22 percent in 2008, declined to comment. Representatives for Comerica did not return phone calls.



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Sources: Washington Post, McClatchy Newspapers, Charlotte Observer, MSNBC, TPM, Youtube, Google Maps

Obama's Czars Are Constitutional, Bush Had 47...Gitmo Blame Game

(The DNC's ad titled: "Dancing with the Czars" pokes fun at Political Entertainers like kooky Glenn Beck and Rush Limbaugh. Watch)




(The Obama Admin "Blame Game". Should Greg Craig be the only White House staffer taking the fall for Gitmo?)





Constitutional Experts: Obama's "Czars" Are Perfectly Legal

In Senate testimony, constitutional experts say the president has the right to appoint independent advisors as long as the distinction between practical and legal authority is rigorously maintained.

Reporting from Washington - Five constitutional experts testified at a Senate hearing Tuesday that President Obama's extensive use of policy "czars" is legal -- as long as the officials do not overstep their authority.

In a city where power is carefully hoarded and monitored, Obama has drawn complaints from Congress about his use of the so-called czars, officials he has appointed to coordinate environmental, health and other policy areas among various departments.

Lawmakers in both parties have sent letters to the White House saying the czar appointments skirt Congress' authority to confirm top executive branch officials and subject them to oversight hearings.

But the panel of constitutional experts testifying before the Senate Judiciary Committee's subcommittee on the Constitution did not support the complaints.

Called together by Sen. Russell D. Feingold (D-Wis.), who had written to Obama asking for more information about the czars, the panel concluded that Obama had the right to appoint independent advisors. The experts said the principle had been established by President Franklin D. Roosevelt.

"The president's personal staff are independently responsible only to the president -- and in the end he is the only czar that is," said Bradley H. Patterson, a presidential scholar. "And he is accountable to the American electorate."

John Harrison, a University of Virginia law professor, compared the czars to the position of White House chief of staff, saying both hold great influence and can speak for the president, but their legal powers are limited.

Their "practical authority . . . is not legal authority, and as long as the distinction is rigorously maintained there will be no legal problem," Harrison said in his written testimony.

Sen. Susan Collins (R-Maine), who had also written Obama questioning the czars, said in a statement the issue was not dead. The Homeland Security and Governmental Affairs Committee, where she is the ranking member, will hold a similar hearing next week.

"The appointments of so many czars have muddied the waters, causing confusion and risking miscommunication going forward," Collins said.

Obama's czars include Nancy-Ann DeParle, who coordinates healthcare issues within the White House; Carol Browner, who coordinates energy and environmental issues; Adolfo Carrion Jr., who works on urban affairs; and Lynn Rosenthal, who works on domestic violence and sexual assault issues.

Sen. Tom Coburn (R-Okla.), ranking member of the Constitution subcommittee, said at the hearing that he was worried in particular about the actions of Obama's "pay czar," Kenneth Feinberg, who has been criticized by lawmakers for taking the lead on crafting executive pay limits without enough oversight. The expert panel, however, said it found no constitutional violation.

White House Counsel Gregory Craig defended the Obama administration's appointments in a letter to Feingold.

"Neither the purpose nor the effect of these new positions is to supplant or replace existing federal agencies or departments," Craig wrote.

The experts also agreed that Congress had limited options if it chooses to rein in these positions.

T.J. Halstead of the nonpartisan Congressional Research Service testified that the most effective answer for Congress is persistent oversight.



Obama's Gitmo blame game


Greg Craig, the top in-house lawyer for President Barack Obama, is getting the blame for botching the strategy to shut down Guantanamo Bay prison by January — so much so that he’s expected to leave the White House in short order.

But sources familiar with the process believe Craig is being set-up as the fall guy and say the blame for missing the deadline extends well beyond him.

Instead, it was a widespread breakdown on the political, legislative, policy and planning fronts that contributed to what is shaping up as one of Obama’s most high-profile setbacks, these people say.

The White House misread the congressional mood – as it found out abruptly in May, when the Senate voted 90-6 against funds for closing the base after Republicans stoked fears about bringing prisoners to the U.S. The House also went on record last week opposing bringing Gitmo detainees here.

The White House misread the public mood – as roughly half of Americans surveyed say they disagree with Obama’s approach. A strong element of NIMBY-ism permeates those results, as Americans say they don’t want the prisoners in their backyards.

But most of all Obama’s aides mistook that political consensus from the campaign trail for a deep commitment in Washington to do whatever it takes to close the prison.

“The administration came in reading there to be wide support for closing Guantanamo at home and abroad, and I think it misread that attitude,” said Matthew Waxman, a Columbia law professor who held Defense and State Department positions on detainee policy. “In general, they were right….but there was very little willingness to accept the costs and risks of getting it done.”

The White House declined to make Craig available for an interview, or discuss the Gitmo deliberations in detail, but several allies and even some critics scoffed at suggestions that Craig bears the main responsibility for the missteps.

“This clearly was a decision that had the full support of the entire national security team,” said Ken Gude, who tracks Guantanamo issues for the liberal Center for American Progress think tank. “It’s typical Washington that someone has their head on the chopping block, but it’s ridiculous that it’s Craig.”

“The implication that this was the brainchild of the White House counsel is not really credible,” said Elisa Massimino of Human Rights First.

When Obama signed a series of executive orders on Guantanamo during his second full day in office, what grabbed attention was not his promise to close the prison but his pledge to do it within one year.

During the presidential campaign, Obama talked almost daily about closing Guantanamo, but he rarely offered a timeline. His Republican rival, Sen. John McCain (R-Ariz.), spoke in a far greater specificity, proposing to move the Gitmo prisoners to Ft. Leavenworth in Kansas.

However, back in July 2007, Obama co-sponsored an amendment offered by Sen. Dianne Feinstein (D-Calif.) and Sen. Tom Harkin (D-Iowa) that called for Guantanamo to close within a year. Obama’s primary rival, Sen. Hillary Clinton (D-N.Y.) was also a co-sponsor.

Some Bush administration officials contend that the one-year timeline was driven by a naïveté on the part of Obama’s aides.

“To a certain extent, they had drunk a lot of the far-left Kool-aid: that everybody, or most people, at Guantanamo were innocent and shouldn’t be there, and the Bush administration was not working very hard to resolve these issues, and that the issues were fairly easy to resolve once adults who were really committed to doing something about it in charge,” said one Bush official who met with Obama’s aides during the transition on Gitmo. “It became clear to me they had not really done their homework on the details.”

But even back on Jan. 22, 2009, the same day Obama signed the orders, Craig acknowledged some of the difficulties involved – including that some of the detainees can never be tried, a problem Craig called “difficult” and “most controversial.”

Now Obama’s decision to set a one-year deadline is being widely second-guessed. Craig supported the idea – and Craig’s allies say that a deadline was needed to persuade foreign governments that Obama was serious. They note that President George W. Bush talked on at least eight occasions about his desire to close Guantanamo – and left office with 250 prisoners there.

“Simply reasserting the intention to close Guantanamo would not have been sufficient in the international community,” Gude said. “They had to have a firm date and they had to have a timeline.”

Gude had advocated an 18-month timeline to “build in a cushion” but he said the only real mistakes the White House made involved failing to anticipate the resistance in Congress – particularly surrounding the Senate’s sharp rejection of Obama’s $80 million request to close Gitmo.

“They made that request without much supporting information and opened the door for Republicans in Congress to make it a Congressional issue and they did it very successfully,” Gude said. “The White House didn’t have a plan to support Democrats who were willing to back up their proposal and it all fell apart.”

Craig’s backers contend that, if that was the White House’s key misjudgment, other top officials share responsibility for the breakdown.

“It seems very unlikely to me that Greg Craig, by himself, engineered a DOD appropriations request,” one lawyer close to Craig said.

In retrospect, there were early signs of possible trouble ahead. Within hours of Obama signing the orders, McCain warned of a backlash and said the time frame the president set out would be “very difficult” to achieve.

A McCain adviser said the Obama team should have known. “I don’t think they realized how much heat McCain took from conservatives” during the GOP primary, said the aide, who asked not to be named. “Had they been aware of that I don’t think they would have handled it this way…..It shouldn’t have surprised anybody.”

Today, the National Security Council and Obama senior adviser Pete Rouse are effectively in charge of closing Gitmo, though Press Secretary Robert Gibbs denied Craig had been stripped of his responsibilities on the prison. “There are number of people that are working on it, Greg being one of them,” Gibbs said.

A review of Guantanamo prisoners is also nearly complete, with about 80 detainees up for release and State Department envoy Dan Fried lining up places to receive them.

“Our friends and allies have accepted or agreed to accept more than 30 of the remaining detainees at Guantanamo who cannot be sent home due to humane treatment concerns, and are seriously considering taking others,” said a White House official who asked not to be named.

But it’s been slow. Obama’s administration has transferred 17 Guantanamo prisoners to other countries so far – compared to 19 by the Bush administration in the first nine months of 2008.

Obama aides have blamed the delays on disarray in government files about the detainees, but several former officials said that is not directly linked to the thorniest questions such as where to locate detainees in the U.S. “Those issues that have been kicked down the road are by far the hardest,” Waxman said.


Sources: Politico, Huffington Post, LA Times, DNC, Youtube

Pay Czar Reviews Ken Lewis' Exit Compensation But Approves $10 Mil For New AIG CEO

(A former Bank of America employee has joined the fledgling "debtors' revolt" movement. He told consumers that "BOFA will stop at nothing to turn an insane profit at your expense.")





Pay Czar Kenneth Feinberg Plans To Cut Salaries, Increase Stock Compensation

The Obama administration's Pay Czar is planning to clamp down on compensation at firms receiving large sums of government aid by cutting annual cash salaries for many of the top employees under his authority, according to people familiar with the matter.

Instead of awarding large cash salaries, Kenneth Feinberg is planning to shift a chunk of an employee's annual salary into stock that cannot be accessed for several years, these people said. Such a move, the most intrusive yet into corporate compensation, would mark the government's first effort to curb the take-home pay of everyone from auto executives to financial traders.



Federal examiner reviewing Lewis' BofA compensation

The Federal pay czar, charged with curbing pay at banks that received federal aid, is reviewing Bank of America chief executive Ken Lewis' accumulated benefits, including retirement and stock holdings.

The review follows Lewis' announcement last week that he would retire Dec. 31. He receives no special exit payments or perks, but has accumulated substantial holdings during his 40 years helping build the nation's largest bank.

By one estimate, the tally is roughly $126 million, including a pension of about $53 million and $57 million in bank stock.

On Monday, a Treasury Department spokesperson said his retirement benefits, stock awarded as compensation and other accrued amounts are being reviewed by Kenneth Feinberg, the special master for executive compensation.

Last week, pay consultant David Schmidt said Lewis' holdings are "untouchable" because much of it had been earned over years. Most of the pension payment, for example, is from a plan frozen in 2002. The stock includes shares Lewis bought personally.

"I'd be amazed if (Feinberg is) able to touch anything of any substance," said Schmidt, who is with New York pay consulting firm James F. Reda & Associates. "But," he added, "this is all new for everybody."

Feinberg's appointment is part of a government effort to prevent future financial disasters. His job includes helping ensure pay plans for bank executives do not encourage excessive risk-taking, which has been blamed in part for the current crisis.

He can demand changes for top executives' pay at firms that received exceptional government assistance. At $45 billion, Bank of America is among the largest recipients of federal bailout funds. The bank has had multiple meetings with Feinberg and his team as part of the overall pay plan review.

"Mr. Lewis does not have a management contract and does not get an exit package from Bank of America," bank spokesman Bob Stickler said on Monday. "His pension and other benefits were earned over a 40-year career at the company."



Benmosche, AIG CEO, Has $10.5 Million Pay Package Approved By Pay Czar

AIG Chief Executive Robert Benmosche's $10.5 million annual pay package has been formally approved by Obama administration pay czar Kenneth Feinberg.

According to a letter to Treasury's compensation committee dated Oct. 2, Feinberg said Benmosche's package, $4 million of which is in stock options, is comparable to that of other CEOs.



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Sources: Wall Street Journal, Huffington Post, TIME, Whitehouse.gov, McClatchy Newspapers, Charlotte Observer, Reuters, Youtube, Google Maps

Meet Ken Feinberg, Pres. Obama's Corporate Pay Czar

Politico----

A czar is born: Meet Ken Feinberg, the Obama administration's special master for compensation. In an interview with CNBC, he described what his role would be in setting guidelines for corporate pay - and discloses what he's being paid for his trouble.



Sources: Politico, NY Post