The real scandal at AIG is the not the bonuses. It's the payments to counterparties. - By Eliot Spitzer - Slate Magazine

Mr. Spitzer back in the game (after being taken down by the Bush justice department on behest of the banks). This is a travesty, and shows how much the fox is in the hen house. The bonus issue is a smoke screen that is trying to distract the American public.


The real scandal at AIG is the not the bonuses. It's the payments to counterparties. - By Eliot Spitzer - Slate Magazine:

"So here are several questions that should be answered, in public, under oath, to clear the air:

What was the precise conversation among Bernanke, Geithner, Paulson, and Blankfein that preceded the initial $80 billion grant?

Was it already known who the counterparties were and what the exposure was for each of the counterparties?

What did Goldman, and all the other counterparties, know about AIG's financial condition at the time they executed the swaps or other contracts? Had they done adequate due diligence to see whether they were buying real protection? And why shouldn't they bear a percentage of the risk of failure of their own counterparty?

What is the deeper relationship between Goldman and AIG? Didn't they almost merge a few years ago but did not because Goldman couldn't get its arms around the black box that is AIG? If that is true, why should Goldman get bailed out? After all, they should have known as well as anybody that a big part of AIG's business model was not to pay on insurance it had issued.

Why weren't the counterparties immediately and fully disclosed?

Failure to answer these questions will feed the populist rage that is metastasizing very quickly. And it will raise basic questions about the competence of those who are supposedly guiding this economic policy."