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 |  Subject: Obama Envoy Richard Holbrooke Was On AIG Board In 2008  Sat Mar 21, 2009 5:02 am | |
| Obama administration special envoy Richard Holbrooke 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.
President Barack Obama has insisted his administration was not responsible for AIG's financial woes, and a White House spokesman said Thursday that Holbrooke was unaware of AIG's decision to award retention bonuses to key employees.
"Mr. Holbrooke had nothing to do with and knew nothing about the bonuses," spokesman Tommy Vietor said.
Close to $165 million in bonus money was paid last weekend.
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.
Obama named Holbrooke as a special envoy on Jan. 22, two days after taking office. Vietor said administration officials were aware of Holbrooke's work for AIG during background checks this year — when AIG already had benefited from federal intervention.
"Disclosure of past board membership is part of the vetting process," Vietor said.
Holbrooke was U.S. ambassador to the United Nations during the final two years of the Clinton administration. and architect of the 1995 accord that ended the war in Bosnia.
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.
Since September, AIG has received $180 billion in taxpayer money to keep it from failing and causing more damage to the U.S. economy.
An AIG spokesman did not respond to telephone calls and e-mails Thursday.
Obama this week blasted AIG for what he described as the company's reckless course. He also defended his administration's handling of the company's rescue.
"Nobody here was responsible for supervising AIG and allowing themselves to put the economy at risk by some of the outrageous behavior that they were engaged in," the president said.
Vietor said Holbrooke "has not discussed AIG with the president, Treasury or any other member of the administration."
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.
Between 2001 and 2005 the records indicate he earned $200,000 in director's fees. He also received 2,400 shares of AIG stock and options to purchase 10,000 more during that period.
http://news.yahoo.com/s/ap/20090320/ap_on_go_pr_wh/aig_holbrooke |
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