THE AIG BONUS SCAM SHOULD'VE BEEN STOPPED BEFORE NOW

Thanx to commenter JGA at Politico I learned that Bloomberg reported on the AIG theft in January.

AIG Said to Offer $1 Billion in Retention to Workers (Update1)
Last Updated: January 28, 2009 11:30 EST

By Hugh Son

Jan. 28 (Bloomberg) -- American International Group Inc., the insurer saved from collapse last year by government money, may have committed more than $1 billion to employees to keep them from leaving the company.

About 400 workers at New York-based AIG’s financial products unit may get $450 million in two installments, said two people familiar with the situation who declined to be identified because the plan is confidential. That is in addition to about $619 million in retention pay going to 4,200 executives and employees at subsidiaries including life insurance.

As can be expected, AIG also kept up the fine tradition of MOTU welfare:

Joseph Cassano headed the financial products unit until stepping down in March after his operations drove a $5.29 billion quarterly net loss for AIG. The financial products business was founded in 1987 by ex-employees of Drexel Burnham Lambert, the securities firm that helped popularize “junk- bond” investing before it collapsed.

AIG kept Cassano on as a consultant, paying him $1 million per month until lawmakers lambasted the company on compensation and perks in an Oct. 7 hearing.

The implied threat that emptywheel found may be just a bluff because many AIG execs have left:

At least 30 AIG managers have defected to competitors since September, according to data compiled by Bloomberg. Zurich Financial Services AG, Switzerland’s largest insurer, has announced at least six hires.