PostHeaderIcon Dear AIG, I Quit!

From today’s NYT:

The following is a letter sent on Tuesday by Jake DeSantis, an executive vice president of the American International Group’s financial products unit, to Edward M. Liddy, the chief executive of A.I.G.

DEAR Mr. Liddy,

It is with deep regret that I submit my notice of resignation from A.I.G. Financial Products. I hope you take the time to read this entire letter. Before describing the details of my decision, I want to offer some context:

I am proud of everything I have done for the commodity and equity divisions of A.I.G.-F.P. I was in no way involved in — or responsible for — the credit default swap transactions that have hamstrung A.I.G. Nor were more than a handful of the 400 current employees of A.I.G.-F.P. Most of those responsible have left the company and have conspicuously escaped the public outrage.

After 12 months of hard work dismantling the company — during which A.I.G. reassured us many times we would be rewarded in March 2009 — we in the financial products unit have been betrayed by A.I.G. and are being unfairly persecuted by elected officials. In response to this, I will now leave the company and donate my entire post-tax retention payment to those suffering from the global economic downturn. My intent is to keep none of the money myself.

I take this action after 11 years of dedicated, honorable service to A.I.G. I can no longer effectively perform my duties in this dysfunctional environment, nor am I being paid to do so. Like you, I was asked to work for an annual salary of $1, and I agreed out of a sense of duty to the company and to the public officials who have come to its aid. Having now been let down by both, I can no longer justify spending 10, 12, 14 hours a day away from my family for the benefit of those who have let me down.

You and I have never met or spoken to each other, so I’d like to tell you about myself. I was raised by schoolteachers working multiple jobs in a world of closing steel mills. My hard work earned me acceptance to M.I.T., and the institute’s generous financial aid enabled me to attend. I had fulfilled my American dream.

I started at this company in 1998 as an equity trader, became the head of equity and commodity trading and, a couple of years before A.I.G.’s meltdown last September, was named the head of business development for commodities. Over this period the equity and commodity units were consistently profitable — in most years generating net profits of well over $100 million. Most recently, during the dismantling of A.I.G.-F.P., I was an integral player in the pending sale of its well-regarded commodity index business to UBS. As you know, business unit sales like this are crucial to A.I.G.’s effort to repay the American taxpayer.

The profitability of the businesses with which I was associated clearly supported my compensation. I never received any pay resulting from the credit default swaps that are now losing so much money. I did, however, like many others here, lose a significant portion of my life savings in the form of deferred compensation invested in the capital of A.I.G.-F.P. because of those losses. In this way I have personally suffered from this controversial activity — directly as well as indirectly with the rest of the taxpayers.

I have the utmost respect for the civic duty that you are now performing at A.I.G. You are as blameless for these credit default swap losses as I am. You answered your country’s call and you are taking a tremendous beating for it.

But you also are aware that most of the employees of your financial products unit had nothing to do with the large losses. And I am disappointed and frustrated over your lack of support for us. I and many others in the unit feel betrayed that you failed to stand up for us in the face of untrue and unfair accusations from certain members of Congress last Wednesday and from the press over our retention payments, and that you didn’t defend us against the baseless and reckless comments made by the attorneys general of New York and Connecticut.

My guess is that in October, when you learned of these retention contracts, you realized that the employees of the financial products unit needed some incentive to stay and that the contracts, being both ethical and useful, should be left to stand. That’s probably why A.I.G. management assured us on three occasions during that month that the company would “live up to its commitment” to honor the contract guarantees.

That may be why you decided to accelerate by three months more than a quarter of the amounts due under the contracts. That action signified to us your support, and was hardly something that one would do if he truly found the contracts “distasteful.”

That may also be why you authorized the balance of the payments on March 13.

At no time during the past six months that you have been leading A.I.G. did you ask us to revise, renegotiate or break these contracts — until several hours before your appearance last week before Congress.

I think your initial decision to honor the contracts was both ethical and financially astute, but it seems to have been politically unwise. It’s now apparent that you either misunderstood the agreements that you had made — tacit or otherwise — with the Federal Reserve, the Treasury, various members of Congress and Attorney General Andrew Cuomo of New York, or were not strong enough to withstand the shifting political winds.

You’ve now asked the current employees of A.I.G.-F.P. to repay these earnings. As you can imagine, there has been a tremendous amount of serious thought and heated discussion about how we should respond to this breach of trust.

As most of us have done nothing wrong, guilt is not a motivation to surrender our earnings. We have worked 12 long months under these contracts and now deserve to be paid as promised. None of us should be cheated of our payments any more than a plumber should be cheated after he has fixed the pipes but a careless electrician causes a fire that burns down the house.

Many of the employees have, in the past six months, turned down job offers from more stable employers, based on A.I.G.’s assurances that the contracts would be honored. They are now angry about having been misled by A.I.G.’s promises and are not inclined to return the money as a favor to you.

The only real motivation that anyone at A.I.G.-F.P. now has is fear. Mr. Cuomo has threatened to “name and shame,” and his counterpart in Connecticut, Richard Blumenthal, has made similar threats — even though attorneys general are supposed to stand for due process, to conduct trials in courts and not the press.

So what am I to do? There’s no easy answer. I know that because of hard work I have benefited more than most during the economic boom and have saved enough that my family is unlikely to suffer devastating losses during the current bust. Some might argue that members of my profession have been overpaid, and I wouldn’t disagree.

That is why I have decided to donate 100 percent of the effective after-tax proceeds of my retention payment directly to organizations that are helping people who are suffering from the global downturn. This is not a tax-deduction gimmick; I simply believe that I at least deserve to dictate how my earnings are spent, and do not want to see them disappear back into the obscurity of A.I.G.’s or the federal government’s budget. Our earnings have caused such a distraction for so many from the more pressing issues our country faces, and I would like to see my share of it benefit those truly in need.

On March 16 I received a payment from A.I.G. amounting to $742,006.40, after taxes. In light of the uncertainty over the ultimate taxation and legal status of this payment, the actual amount I donate may be less — in fact, it may end up being far less if the recent House bill raising the tax on the retention payments to 90 percent stands. Once all the money is donated, you will immediately receive a list of all recipients.

This choice is right for me. I wish others at A.I.G.-F.P. luck finding peace with their difficult decision, and only hope their judgment is not clouded by fear.

Mr. Liddy, I wish you success in your commitment to return the money extended by the American government, and luck with the continued unwinding of the company’s diverse businesses — especially those remaining credit default swaps. I’ll continue over the short term to help make sure no balls are dropped, but after what’s happened this past week I can’t remain much longer — there is too much bad blood. I’m not sure how you will greet my resignation, but at least Attorney General Blumenthal should be relieved that I’ll leave under my own power and will not need to be “shoved out the door.”

Sincerely,

Jake DeSantis

Quoted in its entirety before it disappears. When Liddy was being berated by the insufferable Barney Frank on C-Span the other day, and trying to conceal these employee’s names because of the death threats, my reaction was that he should have taken a dollar out of his wallet, and thrown it in Frank’s face saying, “There is 100% of my compensation from your damn bailout funds, now take this job and shove it up your dildo receptacle.” However, reading this, I have lost all respect for Liddy too. He should have defended these people while he had the microphone and camera.

How many of the posturing politicians with their phony outrage knew the truth laid out in this letter? Did Obama? This BS makes me sick, and it is past time to grab the pitch forks, torches, and stout rope and head for DC to clear these fools out of our lives. ◄Dave►

One Response to “Dear AIG, I Quit!”

  • Tribal says:

    Dave, Did I leave my pitchfork at your place last time I stopped by? I can’t seem to find it and would have to agree with you. Anyway, if not I guess Mr. Santis wouldn’t mind lending me a few bucks to get another one as that would be well within his designated charity group. It would be nice to get a real news station on of these days. Instead of the propaganda and sensational ‘entertainment news’ we have all got programed to accept as truth. My first reaction to AIG bailout’s was shock and then surprise. I was going with the idea that a company works hard as a team and if successful rewards the hardest working team members with bonus’ from the profit of the companies result. To me seems pretty straight forward? I think, generally, that is what ‘joe-shmo on the street’ probably would think and agree. So, to hear the news break that a company, in dire need, comes to the Govt. and gets bailed out by hard working tax payer dollars only to then give bonus’ doesn’t, didn’t and to me will never make sense. Now, if instead, I was not told or heard “bonus'”, like all the other things I wasn’t told, or asked about bailing out these companies, I could still just say, ” I didn’t think we the people should bailout these companies.” Instead, of entertainment propaganda or “news” as they like to refer to themselves, sensationalize this bonus issue, it would have made sense, if they one, didn’t mention it at all just like all the rest of the back door deals that accompanied these bailouts that we will never be told, or two, if it was so pressing as news to inform all of us call it what it is, the company finally paid some of its hard working employees who stuck with the company, after the idiots who ran the company into the ground have long left, the people that stuck by the company, taking a lot of public blame and scrutiny(again, thanks to the entertainment group);working 12-14 hour days for a pay of only $1.00? Are you kidding me? I don’t believe any hard working or not American taxpayer would have any issue with people who not only show up, but work those kinds of hours for who knows a year, half a year, whatever, works like that for $1.00 should get what was promised by their employers the rest of their paycheck, which they took the chance and gambled that through their efforts kept the company from going under now should be allowed the rest of their pay. I hope I am not rambling and my point is clear.
    I suppose the big question now is, who is the idiot who edits the entertainment shows(NEWS) who couldn’t look up a word he doesn’t understand before letting it go out over the air. Who ever he is, hopefully if his bonus is taken away, he won’t mind because he should still get his paycheck at the end of the year if his news service is profitable, if not, then no paycheck, sorry, he can still live off his weekly bonus right? What f*&king idiot they are and we are to allow them to keep spoon feeding us with this BS so we don’t have to think about why our Govt. is bailing out all these companies and banks in the first place.
    I am not sure about you, but I never would have thought about jumping in my car and going to Washington DC to ask for some help, it just never occured to me, when I needed it. “Hey, I am not a big company, I don’t need much like they do, just lend me, oh, let’s say a measly two, no better make that 3 million bucks?”
    “what? Oh sure I’m good for it?” “Trust me…Right after I get that money, the first thing I will do is make sure to retain myself as I believe I am an important part of what makes me run, run so smoothly, so I will give my self 2 of the 3 million, which I will have to pay taxes on right? so well maybe I better make that 2.5 to cover some of the taxes, that leaves me only about 500K in reserve should something else come up. Yeah, well, it might be tough but I think I can make that work, thanks. Oh, what was that, paying you back? Of course, that will be the first order of business, soon as I get that bail out we will put you in touch with the right dept. and they will submit the proposed pay back schedule to you, that is just not my area of expertise and I wouldn’t want to go on the record here and lead you astray. Thanks again, you are what makes this country great, keep up the good work!”
    WOW, I never even would have thought about doing something like that? This really is a great country. I thought you actually had to make money, then start a company to serve, create or fulfill a need by taking the risk of losing your money(even if you borrowed it from let’s say a bank), so you borrow or use your own money, take a risk that you will make a profit and if so, the profit will be worth more then not risking your time and money. That is how it thought this country was made great, because with that system, if your company was not needed, or could be replace by a another that’ end product was cheaper to the consumer, then your company would fail. Now I see that you don’t need to do that at all, it is better to start a company, which does so well out performing it’s competition that it puts the competition out of business only to then show it had been lying to achieve the results so now it not only is the only show in town, and as such has customers with dependency issues on the lied about companies end product, so instead of letting nature take its course, let’s now bail out that company. I am sure they are sorry, and will work hard not to deceive us again. You know, just like that other Corporation we all belong to; The United States Of America,Inc. I think it is.

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