What Are Your Thoughts on Obama's Appointments and Holbrooke's AIG Role?

[chemisttree]

http://www.miamiherald.com/news/nation/story/957178.html"

Another tax-dodger on board.

 

[Astronuc]

http://www.dallasnews.com/sharedcontent/dws/news/politics/national/stories/DN-kirk_03nat.ART.State.Edition2.4a68fa3.html

WASHINGTON – Ron Kirk's excess deductions for basketball tickets and failure to report speaking fees as income have cost him $10,000 in back taxes, a Senate committee disclosed Monday, in the latest IRS-related embarrassment for an Obama Cabinet pick.

The problems are the first indication of potential trouble for Kirk's nomination to be U.S. trade representative, though White House officials and key senators called the errors minor and predicted the former Dallas mayor will be confirmed by the Senate.

"When you put anybody's tax filings under a microscope, people don't have to be dishonest," said Senate Majority Leader Harry Reid, D-Nev. "It's just hard to do all the right things. It certainly shouldn't disqualify him."

. . . .

If that's Reid's attitude, then perhaps he needs to retire - soon.

 

[mheslep]

http://www.dallasnews.com/sharedcontent/dws/news/politics/national/stories/DN-kirk_03nat.ART.State.Edition2.4a68fa3.html

If that's Reid's attitude, then perhaps he needs to retire - soon.

I wouldn't mind it if were even handed about the approach, giving the benefit of the doubt on failure to comply with complex and contradictory rule systems to everyone, or recognizing that the system needs fixing. He does neither.

 

[Astronuc]

Obama envoy Holbrooke served on AIG's board
http://news.yahoo.com/s/ap/20090319/ap_on_go_pr_wh/aig_holbrooke

WASHINGTON – Obama administration special envoy Richard Holbooke was on the American International Group Inc. board of directors in early 2008 when the insurance company locked in the bonuses now stoking national outrage. Holbrooke, a veteran diplomat who is now the administration's point man on Pakistan and Afghanistan, served on the board between 2001 and mid-2008.

During that period, AIG undertook the aggressive investment strategies that led to a near-collapse and forced a multibillion-dollar federal bailout.

. . . .

It remains unclear whether AIG's decision to grant the bonuses ever came before the board. A Holbrooke spokesman declined comment, referring calls to the White House.

. . . .

Holbrooke joined AIG's board in February 2001 and resigned in July 2008, two months before the company nearly collapsed. Over more than seven years as a board member, he may have earned as much as $800,000 in cash and company stock, according to AIG financial documents filed with the Securities and Exchange Commission.

. . . .
AIG chose to approve the executive bonuses in the spring of 2008 "despite obvious signs the 2008 performance would be disastrous in comparison to the year before," New York Attorney General Andrew Cuomo wrote the House Financial Services Committee on Tuesday. Cuomo's office is investigating AIG's executive compensation programs.

For large companies such as AIG, boards of directors are typically made up of high-profile figures from business and academia.

Boards are expected to give the company's top leaders unvarnished advice. But with AIG on life support, the quality of the guidance the company received from its board is under fire.

"The role of a board is to keep a company from going over a cliff," said Robert Litan, an expert on financial institutions at The Brookings Institution in Washington. "I wouldn't be surprised if, in a future lawsuit, a court were to find the (AIG) directors behaved negligently."

For much of tenure on the AIG board, Holbrooke had a role in approving salaries and compensation. From 2001 until mid-2005, he was a member of the board's compensation committee. According to AIG financial statements, the committee sets the salary for the company's chief executive officer and gives advice on how other senior managers are to be compensated.

Holbrooke also led the board's public policy and social responsibility committee from 2005 through July 2008. The committee assesses how political and public policy issues might affect the company's business operations, performance and corporate reputation, according to AIG.

The actual amounts Holbrooke received as an AIG board member are difficult to pinpoint. Before 2005, the SEC reporting requirements did not call for dollar figures to be attached to the stock and option awards for directors. AIG stock awarded for board service may now be worth far less than the value it had originally.

According to the SEC filings, AIG paid Holbrooke $267,943 in fees and stock awards in 2007; he was paid $232,865 in 2006. Compensation figures for the six months he was on the board in 2008 are not yet available. By prorating his 2007 compensation, he could have earned about $107,500 in directors fees and stock.

I'd like to know what exactly Holbrooke did to earn more than $200K/yr, or the rest of the board, while AIG was mucking around with derivatives and CDS's in which the liabilities exceeded the ability of the company to pay (i.e. while the company was going off a cliff). If a company assumes a liability of $2 trillion and only has something like $200 billion, if that, then there is something terribly wrong.