Glenn Greenwald: The sanctity of AIG's contracts

[closeupready]

Apparently, the supreme sanctity of employment contracts applies only to some types of employees but not others. Either way, the Obama administration’s claim that nothing could be done about the AIG bonuses because AIG has solid, sacred contractual commitments to pay them is, for so many reasons, absurd on its face.

As any lawyer knows, there are few things more common – or easier -- than finding legal arguments that call into question the meaning and validity of contracts. Every day, commercial courts are filled with litigations between parties to seemingly clear-cut agreements. Particularly in circumstances as extreme as these, there are a litany of arguments and legal strategies that any lawyer would immediately recognize to bestow AIG with leverage either to be able to avoid these sleazy payments or force substantial concessions.

Since the contracts are secret and we’re apparently just supposed to rely on the claims of AIG and Treasury Department lawyers, it’s impossible to identify these arguments specifically. But there are almost certainly viable claims to be asserted that the contracts were induced via fraud or that the bonus-demanding executives themselves violated their contracts. Independently, it’s inconceivable that there aren’t substantial counterclaims that AIG could assert against any executives suing to obtain these bonuses, a threat which, by itself, provides substantial leverage to compel meaningful concessions. Many of these executives were, after all, the very ones responsible for the cataclysmic losses.

http://www.salon.com/opinion/greenwald/2009/03/16/aig/

[Jakes Progress]

1. Why does it seem that all the "smart" lawyers

are on the side of evil? Don't be have someone in Treasury or the AG's office with the same legal acumen as those of the AIG pig? Hell, they all seem to be about the money. How about offering them 50% of what they save the taxpayers?

[nichomachus]

2. Obligations?

Tell that to all the retirees who got screwed out of their pensions and health care -- which were contractually owed to them.

[Winterblues]

3. The contracts for auto workers sure don't seem to mean much

Republicans are yammering for those contracts to be nullified and the workers to accept lower wages. I haven't heard the same thing about these contracts though..

[Supersedeas]

4. funny who sanctimonious Elites can be: when we fight their wars for oil, pay taxes without loopholes

and Carribean tax shelters

And so how, their "labor" is more precious that ours