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Local Bankers Fuming Over AIG Payouts

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By TONY HOLT

Hernando Today

Published: March 18, 2009

SPRING HILL - While Democrats in Congress look to recoup $165 million in bonus money paid to executives at American International Group Inc., three local bankers chimed in on what they considered a perfect storm of rampant greed on Wall Street and negligence on Capitol Hill.

One placed most of the blame on AIG itself. Another blamed the board of directors. Another blamed Congress.

All of them said they were disgusted by the recent developments - $173.3 billion in federal aid and a nine-figure payment of bonuses to AIG's executives.

"They keep getting daily, monthly and quarterly updates, so the company did know they were losing money," said Jerry Sheffield, of Brannan Bank. "It's ludicrous."

Sheffield made his comments Tuesday morning, before Congress agreed to a proposal that would tax up to 98 percent of the bonus money.

"Someone needs to step in," he said. "How can you have a contract to pay bonuses when the company is broke?"

Sheffield accused company executives of "looting" taxpayers.

"I think it stinks," said Don Page, president and chief executive officer of Cortez Community Bank. "They should've done their due diligence."

He also thinks Congress should have stayed away, or at least read the bailout provisions before voting yes.

Page visited Washington, D.C., a few weeks ago and said he spoke with 10 senators from both parties. He said he was "shocked" by how many admitted to not reading the bill.

"I walked out with my chin hanging down," he said. "I couldn't believe my ears."

"They've got to read these bailout packages," Page continued. "There is so much pork in that thing. They need to stay away from giving things away, or else this is what's going to happen."
New York Attorney General Andrew M. Cuomo announced Tuesday that 73 employees at AIG received bonuses of at least $1 million. He sent out several subpoenas that day.

Morris Porton, a local executive at Florida Traditions Bank, said the media's focus has been too narrow. He thinks Americans in general are more offended by the $173.3 billion total in bailout money, not just the small portion that was used for executive bonuses.

AIG's board of directors lost sight of their responsibilities to the shareholders and customers by sitting idly by and watching the debts grow to unprecedented levels, he said.

"If we learn anything from all of this, we should hold companies and their boards more accountable for their actions," Porton said.

Reporter Tony Holt can be reached at 352-544-5283 or wholt@hernandotoday.com.

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