Scathing resignation letter from AIG executive published in NY Times

Jake DeSantis, an executive vice president in American International Group's financial products unit sent a pointed resignation letter to Edward Liddy, the head of the company. That letter was published yesterday in the New York Times and provides an interesting perspective on the bonus and bailout situations.

Specifically, DeSantis criticizes Liddy for throwing him and other bonus recipients under the bus following taxpayer outrage at the bonuses paid by AIG. The unit DeSantis was over didn't cause the major financial troubles of AIG. Yet those employees still had to pay the price for the reckless acts of other units within AIG.

During the turmoil, AIG promised employees like DeSantis that they would receive their bonuses defined in contracts previously signed. Many of the employees did make concessions throughout the drama, such as DeSantis, who worked for an annual salary of $1. Yes, $1. And after putting in his time to help AIG come out of this mess, DeSantis and others received their bonuses but have now been asked to return them.
I don't blame DeSantis for being angry. He held up his end of the bargain, and it seems AIG has not. As I've said before, the whole problem is still the bailout. Had the bailout not occurred, no one would care who got bonuses. But once taxpayer money was funneled to AIG in large sums, there was a natural negative reaction to the payment of any bonuses.

Yes, I understand the business purpose behind the bonus, and I'm sure at least some of those who got bonuses earned and deserved them. I still don't want my money supporting a company like AIG. Without the bailout, AIG could have paid whatever they wanted to whomever they wanted with little to no scrutiny. Use my money to "save" a company and I have a right to complain about how it's spent.

Regardless of whether the bonuses were right or wrong, the letter from DeSantis provides an interesting perspective from inside the company. Yes, there are real people with real lives who have been sucked into the drama. It's not pretty for them either. You can be sure this isn't the last of the drama.

Forensic accountant Tracy Coenen investigates corporate fraud and consumer scams, and is the author of Expert Fraud Investigation and Essentials of Corporate Fraud.
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