Fear and loathing at AIG: Workers explain payments

WILTON, Conn. —

A flat-screen television hangs on the back wall of the trading floor inside the headquarters of AIG Financial Products in Wilton. The most-talked-about employees in the nation huddled to find out just how despised they have become.

They watched as members of Congress referred to them as greedy and incompetent. They heard more than one demand that their names be released to the seething public. They heard the chairman of American International Group, Edward Liddy, tell lawmakers that people, in e-mails sent to AIG-FP, suggested the firm's leaders "should be executed with piano wire around their necks."

The evening before, the firm's chief operating officer, Gerry Pasciucco — whom Liddy recruited in November to shut down Financial Products before it could do more harm to the economy — had urged them to keep their heads down, to act professionally and to continue working to extricate Financial Products from its more than $1.6 trillion in outstanding derivative contracts. He acknowledged the past few days had been like being "inside the piñata."

They told him they worried mostly about getting shot, despite the guards patrolling the parking lot, the front door and some homes.

A sense of fear hung in the room, but there was anger, too. No one would express it publicly, of course. Who wants to hear a wealthy financier complain? And yet, within those walls lies a deep sense of betrayal, first by their former colleagues, now by their elected leaders.

One AIG executive, who spoke on the condition of anonymity, said many workers felt demonized and betrayed. "It is as bad if not worse than McCarthyism," he said.

The public's anger, he said, "is coming from bad facts as a result of someone else's agenda — or just bad facts period." Instead, he said, the so-called bonuses were in fact payments that had been promised long ago to workers, including technical and administrative assistants.

"Under the bus"

The handful of people who championed the now-infamous credit-default swaps are, by nearly every account, long since departed. Those left behind to clean up the mess, most of whom never lost a dime for AIG, think they have been sold out by Congress and the president.

"They've chosen to throw us under the bus," said a Financial Products executive, one of several who spoke on condition of anonymity, fearing reprisals. "They have vilified us."

They said what is missing from this week's hysteria is perspective. The retention payments they received over the past week were set in motion early last year, when the firm's former president, Joe Cassano, was on his way out the door. Financial Products already was running into trouble, and the year ahead looked grim. People were weighing offers from other firms, and AIG executives feared too many departures would be a disaster.

So AIG stepped in with an offer to employees of Financial Products. Work through all of 2008, and get a lump payment in March 2009. Stick around through 2009, and you'll get paid through 2010. Almost all other forms of compensation — bonuses, deferred payments and the like — have vanished.

"People are trying to do the right thing," the same Financial Products executive said. "Guys have worked their (tails) off to try to get value for the taxpayer. This isn't money that's being advanced to us. People have performed the work and done it exactly as we asked them to do."

Pasciucco said nearly all the troublesome sectors of the business — the risky credit derivatives written on mortgage-backed securities — are out of the equation, as are the people who worked on them. That leaves a small number of workers to untangle the remaining trades. The effort also requires a sizable number of "back office" staff, such as systems, computing, accounting, human resources and legal teams.

"Everybody, including my secretary and including the guy down the hall that serves lunch, gets a payment," said Pasciucco, who added that he received no retention payment and has no contract.

AIG paid $165 million in bonuses to 463 executives, but amid the uproar that erupted when payments were made public, Liddy asked the employees to return much of that money. He said many of them have agreed to do so.

The largest single bonus check, for $6.4 million, went to Douglas Poling, an executive vice president for energy and infrastructure investments. Mark Herr, an AIG spokesman, said Poling had told him he was returning the bonus.

Death threats

In the meantime, the e-mails from the public continue to roll in, including death threats and calls to blow up the firm's Wilton headquarters. Reporters and photographers have camped out in front of the offices in London and Connecticut. They have staked out employees' houses.

The New York Post ID'd one exec and labeled him "Jackpot Jimmy."

That executive, James Haas, questioned as he walked up his Fairfield driveway Thursday, said, "How do I feel? I feel horrible. This has been a complete invasion of privacy."

His words came haltingly. "You have to understand," he said, "there are kids involved, there have been death threats."

"I didn't have anything to do with those credit problems," said Haas, 47. "I told Mr. Liddy I would rescind my retention contract."

He ended the conversation with a request: "Leave my neighbors alone."

Too late. Jean Wieson, who has lived down the block for 24 years, had stopped in front of Haas' house before he arrived home. She was angry about the millions of dollars in bonuses paid to its executives, the credit-default swaps that brought AIG, to its knees, the more than $170 billion the federal government has spent to prop it up. "It makes me absolutely sick," she said. "It's despicable. ... They should be forced to give every cent back."

The Connecticut Working Families party, meanwhile, which has support from organized labor, is planning a bus tour of AIG executives' homes Saturday.

"We're not looking to foment that unnecessarily," said Jon Green, director of Connecticut Working Families. "But what we want to do is give folks in Bridgeport and Hartford and other parts of Connecticut who are struggling ... an opportunity to see what kinds of lifestyle billions of dollars in credit-default swaps can buy."

Material from The New York Times is included in this report.