Crush AIG Thieves. A corporation that is owned and should be controlled in every particular by the Federal Government is misbehaving so badly that its misbehavior constitutes crimes. The Obama Administration pretends to be powerless to do anything about it and stop or reverse the payout of over 165 million taxpayer dollars to top executives. Absurd.
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'Public Policy' Exception. The pretense that any piece of paper AIG management signed is a contract that Government cannot void is nonsense. A "contract" is not a contract until a court SAYS it's a contract. And if a court finds that a written "agreement" is NOT a contract, it's NOT A CONTRACT. I worked for lawyers for decades, and when we drew up what was intended to be a contract, it was NEVER given the title "contract" but only "agreement". Because an agreement is not a "contract" unless and until it can be enforced by a court of law. One way an "agreement" can be voided is that a court finds that it is contrary to public policy.
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You have only to watch Judge Marilyn Millán on the People's Court to get a sense of what an agreement has to contain, at the very least, to be confirmed by a judge as a contract.
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• There must be a "meeting of the minds". Both sides to an agreement must understand exactly what they agree to. If one side thinks the agreement means one thing, but the other side thinks it means another, there is no meeting of the minds, and a court will not render the agreement a "contract".
• The agreement must be mutually beneficial, and the "consideration" (benefit) given to each party must be felt by each side to be sufficient, that is, proportionate and appropriate, entailing a rough equality of obligations and benefits. One-sided agreements will not be confirmed as "contracts".
• A third test applies to some agreements: it must comport with public policy. An agreement to violate the law will not be enforced. For instance, if a woman hires a hitman to kill her husband (a "contract killing"); she pays him the fee he demands; but he refuses to kill her husband, she cannot go to court and demand that the hitman either kill her husband or return her money. Because hiring someone to murder someone is contrary to public policy, the "agreement" is NOT a "contract" even tho every other element of a contract is present in the "agreement".
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Apply this to AIG. The claim is made that AIG committed to pay money to executives even if they caused not profit but disaster to the company. Paying people to harm the company is not enforceable as a matter of public policy. Paying people to loot a corporation and steal taxpayer money is not enforceable as a matter of public policy. The "agreements" signed by AIG are not enforceable as a matter of public policy, so they are NOT "contracts". Period.
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Even as regards the very most basic condition of a contract, a "meeting of the minds", did AIG really intend to pay hundreds of millions of dollars in bonuses to people for destroying the company? Plainly not. Such an intention is inconceivable, so it did not happen. Thus, as regards a meeting of the minds, AIG cannot have intended that catastrophic failure be rewarded with bonuses.
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Who is AIG? A corporation is the property of its owners, not managers. Even if management wanted to feather its own nest without regard to the owners, they are not entitled to do that. A corporation is not its management but its owners, the stockholders. So even if the managers did intend to take shareholder money and appropriate it for themselves while destroying shareholder value, the actual corporation, the owners/stockholders, did NOT so consent. The actual party to the "agreement", then, did NOT agree to be robbed, so there was NOT a meeting of the minds between the actual parties-in-interest.
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A corporation is a legal entity a step away from the owners, such that when the corporation is sued or ceases to exist, the owners (shareholders) are not personally ruined. But sometimes courts "pierce the corporate veil", and find that the owners can be held to account for corporate acts. This is usually done to punish misdeeds committed by the owners thru the corporate structure. But if the corporate veil can be pierced to punish, surely it can be pierced to protect. Let the courts protect the shareholders of AIG — mainly the United States Government, now — from the misdeeds of AIG management.
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Delusions of Powerlessness. Media are abuzz with frustration over these AIG bonuses. Everyone seems to agree that 300 million people are completely powerless against a few dozen people. That is insane; absolutely delusional thinking. 300 million people can not merely stop a few dozen from committing outrages; 300 million people can KILL a few dozen — or even thousands, as of right. Even if all we did was, each and every one of us, punch these executives, one punch per person, that collective punishment would KILL them, many times over. To think there is nothing we can do is DELUSIONAL.
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Barney Frank said tonite on MSNBC's Rachel Maddow Show that the United States owns AIG and can, as owner, simply refuse to pay out bonuses. Tho Frank did not say this, if AIG had so refused, the people who claim to be "due" such payments would then have to sue, and persuade a court that they earned them.
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That's one way to go. There are many others.
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Acting in behalf of the 300 million American owners of AIG, the United States Government has the power to void any financial agreement made in the United States (always remember that no "agreement" is a "contract" unless the Government says it is). Bankruptcy courts do it all the time.
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More pointedly, the United States Government has the literal power of life and death over these executives. We can demand they return this ill-gotten gain on penalty of imprisonment or death.
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But we don't have to rely upon direct Government action.
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Misbehaving executives should fear for their lives, if not from the Government, then from the people directly. How might that work? Very easily. And very quickly.
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The Government can put the names, Social Security numbers, addresses, telephone numbers, email addresses, PHOTOGRAPHS from various angles, full-body and up-close face shots, and daily schedule — with routes to and from work, the stores they shop at and restaurants they patronize, with days and times — on the Internet and let the people take care of this for us. And then we can sue their estate for return of ill-gotten gains.
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If we imprison them, we can seize all moneys necessary to pay for their imprisonment, at whatever rate we care to charge.
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No One Is Indispensable. The excuse the Feds make is that the executives who got AIG into such a mess are the only ones who know how it happened, and, thus, how to get us out of the mess they made: 'it takes the bombmaker to defuse the bomb'. Oh?
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First, that cannot be true. Any team of competent "forensic accountants" and lawyers can sort this mess out, even without a single word of explanation from the 'bombmakers'. If the United States Government, over 14 million people — yes, 14M — does not contain the requisite experts, it sure as hell can hire them — for a lot less than $165 million.
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Moreover, the United States Government can imprison evil thieves and hold them in horrendous conditions, here or abroad, and get every bit of information we need from them to undo their crimes. If they resist, we can simply starve them until they cooperate. "Fatcats" would not remain fat very long in a cell into which no food is delivered until and unless they cooperate.
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The rich are not, personally, physically courageous. They do not volunteer for the millitary. They do not serve as police officers, firefiters, or even auxiliary police officers walking the streets in a neighborhood watch. Merely not feeding them for a few days would make most of them spill their guts (so to speak).
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If we are in a hurry, or don't trust what the prisoners might say just to be fed, we can inject them with sodium pentathol or scopolomine "truth serum". We can interrogate them under polygraph and voice-stress analyzer. Even if interrogations under such drugs or machines were somehow regarded as illegal, here, we can subject AIG executives to "extraordinary rendition" to places where we can use all of the above-mentioned techniques and torture to get all the information we need. Even the Obama Administration has asserted the right of "rendition". Do we really need to send cowardly rich bastards to, say, Afghanistan, Libya, or someplace deep in Central Asia to interrogate them without constitutional niceties? Or would the mere threat to do so suffice?
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Media and politicians should stop running over at the mouth that we are powerless against these corporate thieves, and start very publicly talking about what we CAN do to them. Scare the sh* out of them.
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(The current U.S. military death toll in Iraq, according to the website "Iraq Coalition Casualties", is 4,259 — for Israel.)
- posted by L. Craig Schoonmaker @ 11:59 PM