Obama usually Holbrooke served the board of AIG

 

Monday, Mar 23,2009, 11:21:45 PM   Click:

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WASHINGTON_Obama administration special envoy Richard Holbooke was at the American International Group Inc. Board of Directors in early 2008 when the company locked in insurance premiums now stoking national outrage. Holbrooke, a seasoned diplomat who is now the point man for the administration on Pakistan and Afghanistan, has served on the board of directors between 2001 and mid-2008.

During this period, AIG has undertaken an aggressive investment strategies that led to a near collapse and forced the federal government several billion dollars bailout.

President Barack Obama has insisted that his administration was not responsible for the financial problems of AIG, and a spokesman for the White House said Thursday that AIG Holbrooke was not aware of the decision to award bonuses the retention of key employees.

"Mr. Holbrooke had nothing to do with and knew nothing about the bonus," said spokesman Tommy Vietor.

Nearly 165 million dollars in bonus money was paid out last week.

It remains unclear whether the AIG decision granting ever come before the Board. A spokesman Holbrooke refused comment, referring calls to the White House.





Obama Holbrooke appointed special envoy on January 22, two days after taking office. Vietor said the administration was aware of its work for AIG Holbrooke during background checks this year _ when AIG had already received a federal intervention.

"The disclosure of board membership has spent part of the approval procedure," said Vietor.

Holbrooke was U.S. ambassador to the United Nations during the last two years of the Clinton administration. and the architect of the 1995 agreement that ended the Bosnian war.

Holbrooke joined the board of AIG in February 2001 and resigned in July 2008, two months before the company nearly collapsed. For over seven years as a board member, in May he won more than $ 800,000 in cash and shares of the company, according to AIG documents filed with the Securities and Exchange Commission.

Since September, AIG has received $ 180 billion in taxpayer money to maintain and not cause more damage to the U.S. economy.

A spokesman for AIG did not respond to phone calls and e-mails Thursday.

Obama this week blasted AIG for what he described as reckless business courses. He also defended his management of treatment of the company rescue.

"Nobody here has been to oversee AIG and allow the economy endangered by some of the outrageous behavior they were engaged in," said the president.

Vietor Holbrooke said "did not discuss with the chairman of AIG, the Treasury or any other member of the administration."

AIG has decided to approve the bonuses of the executive in the spring of 2008, despite obvious signs of performance in 2008 would be disastrous from a year earlier, "New York Attorney General Andrew Cuomo wrote to the House of Financial Services Committee on Tuesday. Cuomo opened an investigation of the office of the executive of AIG programs.

For large companies such as AIG, boards are generally composed of high-ranking business and academia.

Boards should give the business leaders unvarnished advice. But with AIG on life, the quality of leadership, the company has received from its board of directors is under fire.

"The role of a board of directors is to keep a firm to go over a cliff," said Robert Litan, an expert on financial institutions at the Brookings Institution in Washington. "I would not be surprised if, in a future trial, a court was to find the (AIG) directors have behaved negligently. "

For many of occupation on the board of AIG, Holbrooke had a role in the approval of salaries and allowances. From 2001 until mid-2005, he was a board member of the Compensation Committee. According to the financial statements of AIG, the Committee determines the compensation of the CEO and gives advice on how other executives should be compensated.

Holbrooke has also led the board of public policy and social responsibility of the committee from 2005 to July 2008. The committee evaluates the policies and how public policy issues could affect the company's activities, performance and corporate reputation, according to AIG.

The actual amounts received Holbrooke as a board member of AIG are difficult to identify. Before 2005, the requirements of the SEC has no dollar figures to be attached to shares and option grants for directors. AIG stock granted pension for May will be much less valuable than the value it had initially.

According to the SEC, AIG Holbrooke paid $ 267,943 in fees and stock prices in 2007, he was paid $ 232,865 in 2006. Compensation figures for the six months he has served on the board in 2008 are not yet available. In 2007 the proportion of his compensation, he could have earned approximately $ 107,500 in chips and stock.

Between 2001 and 2005, records show he earned $ 200,000 in fees. He also received 2400 shares of AIG stock and options to purchase more than 10,000 during that period.

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Associated Press writer Matthew Lee and researcher Randy Herschaft contributed to this report.



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