Frank disgusted by AIG bonuses

Representative Barney Frank today blasted the bonuses that are going to AIG executives whose bad decisions pushed the insurance giant to the edge of going under before a federal bailout.

The $165 million in bonuses was to be paid to the executives by Sunday, and most are going to AIG Financial Products, the unit that sold credit default swaps, the risky contracts that caused massive losses for the insurer. AIG, which lost $61.7 billion for the fourth quarter of last year -- the largest corporate loss in history -- has received more than $170 billion in a series of federal rescues.

Frank, a Massachusetts Democrat who is chairman of the House Financial Services Committee, suggested that if the federal government, which now owns an 80 percent stake in the company, can't rescind the bonuses, it could force some dismissals.

"These people may have a right to their bonuses. They don't have a right to their jobs forever," Frank said on NBC's "Today" show.

"[I]t does appear to me we're rewarding incompetence," he added. "Forget about the legal matter here for a second. These bonuses are going to people who screwed this thing up enormously, who made terrible decisions."

A disgusted Frank said that "some of these people, maybe they should choose between keeping their bonus and keeping their jobs. You can't fire a man for having his legal rights, but I'm ready to look and say, this guy gets a bonus? This is a guy who cost us x billion dollars. Let him live off his bonus and no salary for the future."

Frank said not enough conditions were put on AIG, and dismissed concerns expressed by other financial institutions about strings attached to government aid.

"My answer is good-bye, please leave quickly and send back the money," he said.