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 American International Group Inc. (NYSE:AIG ) Financial Products unit employee Jake DeSantis, who publicly resigned in a The New York Times op-ed column, is not the only AIG employee stepping forward to publicly resign over CEO Edward Liddy's plea and the U.S. government's demand to return $218 million in bonuses. Many employees are resigning because they feel they are being "blackmailed" and have no other choice.Gerry Pasciucco and about five employees of the unit publicly quit Wednesday, according to The Wall Street Journal. Another 20 quit Tuesday, according to The New York Times. Executives at Paris-based Banque AIG, Mauro Gabriele and James Shephard, have both resigned, leaving the giant insurer scrambling to replace them, "to avoid an unlikely but expensive situation in which billions in AIG trading contracts could default," The Wall Street Journal reports. There were 418 executives awarded bonuses in all. Of those, 15 of the top 20 recipients agreed to give back their bonuses worth about $30 million in cash, and $50 million has been returned in total. These employees face quite a dilemma. They can return a bonus they feel they earned or keep it and deal with the fallout. DeSantis, who was being paid a salary of $1 like CEO Edward Liddy, said he would donate his after-tax proceeds of $742,000 to charity. Others such as top bonus recipient Douglas Polin have made it known they will return their bonus. New York Attorney General Andrew Cuomo, who has the list of all of the AIG employees who received bonuses -- and is investigating whether the AIG bonuses were paid fraudulently under New York law -- has not decided if he will make the names of the employees public. However, he hopes to have $80 million of the $165 million returned. The remaining bonus recipients are located outside of the U.S. Many employees feel that Cuomo is dangling the disclosure of their names as some sort of blackmail. In fact, AIG executives in Europe feel that pressure on them to return their bonuses could reach that level, according CNBC. "The vast majority of people in London have made the decision that the request is pretty offensive. It effectively constitutes blackmail whether it is criminal or not. There is no moral reason to give it back." Although it's not officially blackmail, it does force these executives into a corner and make what is already a tough work environment into a hostile and unbearable one, as DeSantis said. "I can no longer effectively perform my duties in this dysfunctional environment, nor am I being paid to do so. Like you, I was asked to work for an annual salary of $1, and I agreed out of a sense of duty to the company and to the public officials who have come to its aid. Having now been let down by both, I can no longer justify spending 10, 12, 14 hours a day away from my family for the benefit of those who have let me down."What's more is these employees are now dealing with death threats at their homes and are returning to work only to find that the name of the company has changed. Here are a few sent to employees at the Financial Products unit from ConnPost.com.
Others are being cornered at their homes: James Haas was cornered Thursday by press and neighbors in his his home in Fairfield, Conn., according to The New York Times. For those employees that return the bonuses, is there really any redemption? Many of these employees are also leaving for the reasons stated above. Would you hang around? These guys aren't the bad guys. The bad guys are most likely long gone with the money. These employees are faced with a difficult choice though during difficult times. Creating a difficult work environment for employees due to threats and ridicule will only ensure that the insurer does go under. AIG, the government and taxpayers need these employees to wind down the $1.6 trillion portfolio of derivatives. Since the government and AIG executives such as CEO Liddy knew about these bonuses in 2008, it is time for these men to shoulder the responsibility and move on. The government now has to act like a shareholder so it needs to monitor (and regulate) how the insurer is spending its money regularly and sit on the board, advocating for our investment, so there won't be any more surprises for the American public and bailouts won't be limitless. - Maria Woehr Also see: AIG employees flee or go into hiding AIG employees return bonuses and quit AIG employee's perspective AIG's ILFC may get bids from PE
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