AIG Old Truths

The outrage over so-called "retention" bonuses handed out to employees at AIG (whom Democrats always mislabel as "executives") has been building for a week, but we've yet to uncover the truth about who knew what and when they knew it. While the financial impact of these bonuses has outraged the entire country, the ongoing constitutional problems presented by government bailouts are the most frightening aspect of this whole sorry mess.

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Taxpayers are fuming at AIG, and rightly so. But political leadership, from members of Congress to Barack Obama himself should spare us all their phony anger and indignation. Every politician in this country who voted "yea" on the amended legislation that authorized these bonuses is directly responsible for the waste of taxpayer money and thus an enabler of these bonuses, whether they read the language or not. This is still America, albeit not for long if Obama continues on his present course, but I digress; Unless there was contractual language withholding the bonuses on the basis of some enforceable measure of financial performance; unless Congress can prove the contracts were negotiated illegally or with the knowledge the company was failing, the contracts must be upheld, no matter how distasteful that may be to some. There are serious ethical and constitutional questions around Congress' use of tax legislation to target a handful of people for retroactive punishment. Punishment is for the Judicial Branch to determine. Exactly how far down the slippery slope are we willing to descend? First, it was the rewriting of mortgage contracts, now, it's employment compensation contracts; what contracts will our dangerously overreaching government decide to retroactively modify next? That said, don't get me wrong: As one of the lonely voices who consistently argued against government intervention in the free market because I foresaw these very consequences, I am as mad as anyone that employees of companies receiving government assistance for their failures received a bonus of even one dime. But, as I said in the beginning, the fault lies at the feet of our political leadership. These bonuses were agreed to as far back as May of 2008. Not a single politician said a peep until they became public a year later. Now, the entire Legislative and Executive Branches are tripping over each other in a rush to the microphones (or in Obama's case, the Teleprompter) to register their faux disapproval. It's rather interesting how this happened; through a legal loophole crafted in a back-door deal known as the "Dodd Amendment" and inserted by Chris Dodd at the last minute request of Timothy Geithner, without review. The Dodd Amendment effectively weakened the executive compensation limits that were a major part of the bill. Chris Dodd and Timothy Geithner, while centrally involved in this mess, are merely deflecting blame away from Barack Obama, in whose hands the buck must now stop. Despite his Teleprompted anger at AIG, Obama has maintained a very cozy relationship with the insurance giant. He is the number one recipient of political contributions from AIG, Chris Dodd being number two. The bonus backlash is a direct result of Obama's attempt at political payback to AIG for their generosity. Political contributions are one thing; but attacking, marginalizing, or silencing your critics is quite another, particularly when those being marginalized and silenced are leveling legitimate criticism of unconstitutional government intrusion into every aspect of American life. Unknown to many because the mainstream media refuses to cover it is an ongoing, year-old legal challenge against AIG, mounted by the Thomas More Law Center, who represents former U.S. Marine and Iraq veteran Kevin Murray. In an earlier column discussing constitution-shredding, I wrote of Sharia-compliant financing. This program is promoted by supporters as a desirable alternative to the current capitalist system due to Sharia law's religious restrictions on the charging of interest, what Islam terms "usury". But what they neglect to mention is that, while interest is forbidden, charitable giving in the form of a religious tax known as zakat, is mandatory. The funds from zakat have been a frequent target of prosecution by U.S. officials because proof positive exists that this money finances terrorist acts and weapons purchases. AIG is just one of the corporations that engages in the promotion of Sharia-based finance. And since they are the recipient of hundreds of billions of tax dollars, their continued promotion of these programs constitutes an unconstitutional government endorsement of numerous tenets of Islam. Suspiciously, The U.S. Justice Department filed for dismissal of the lawsuit on the grounds that the government does not control AIG. But, you can't have it both ways. Congress effectively taxed back the AIG bonuses on the grounds that taxpayers own 80 percent of the company, yet in their request for dismissal of this lawsuit, claim that they can't control AIG's outrageous promotion of Islamic financing. Well, either their bonus tax was illegal, or they can control this incendiary attempt to promote Sharia law in the United States. Which is it?