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Press Release

For Immediate Release
Contact: Sean Bonyun
202-225-3761
March 19, 2009

Upton Applauds House Efforts to Strip Taxpayer-funded AIG Bonuses

WASHINGTON, DC - Congressman Fred Upton (R-St. Joseph) applauded today’s House passage of legislation to strip AIG executives of their taxpayer-funded bonuses.  The legislation would impose a new 90 percent tax on bonuses received by employees of certain companies that received taxpayer funds from the Troubled Asset Relief Program (TARP). The tax would apply to any bonus given after December 31, 2008.  The legislation to impose an additional tax on bonuses received from certain TARP recipients, H.R. 1586, passed the House by a vote of 328 to 93.

“We all have to remember that this bonus money is taxpayer money, not AIG money.  Rewarding performance that has negatively impacted our entire economy makes no sense in these challenging times,” said Upton.  “As Michigan endures double-digit unemployment and families struggle to feed their families and keep the lights on, it is sickening for the execs at AIG to be rewarded with taxpayer dollars.  Michigan’s families and America’s taxpayers deserve better and today we work to right a terrible wrong.” 

Upton continued, “American taxpayers should not be in this position in the first place – there is clearly a gross lack of oversight that allowed AIG’s bonuses to be slipped into the stimulus package, and we must get to the bottom of this.  This mess is a prime example of what happens when an 1,100 page bill is rushed through Congress without allowing those elected to represent the American people an opportunity to review the bill.  Today, we restore some sanity and transparency for America’s taxpayers who are just trying to make an honest living.”

The legislation would apply the 90% tax to only the portion of a bonus that, in combination with other income, increases an employee’s adjusted gross income to a level above $250,000 ($125,000 for married couples filing individually) in the taxable year when the bonus was received.

Upton is also a coauthor of H.R. 1582, the Executive Bonus Repeal Act, to retroactively strip language from the stimulus plan that exempted these lucrative bonus contracts.  To uncover how this last-minute change was made, Upton is also cosponsoring a resolution that will require the Treasury Secretary Geithner to fully disclose all communications between his Department and AIG.

This week, $165 million was awarded to 73 AIG employees as retention bonuses primarily for the AIG financial products division (11 of these employees are no longer with AIG). 

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