Employees Fear for Their Lives: The Other AIG Outrage

AIG workers say they're fed up with misplaced blame, scared by death threats.

March 26, 2009, 7:16 PM

March 27, 2009— -- Slammed by Congress, assailed by the public, pressured to give up their bonuses, forced to work extra hours and threatened with violence -- there is another group of people outraged over the AIG debacle.

Employees of American International Group not involved with the shady credit default swaps that led to the company's near-collapse last year are angry for being unfairly blamed for a mess they say they had nothing to do with and are scared by threats of violence against them and their families.

"You mother******s should all be taken out back and shot in the head. I'd do it myself if given the chance," read one threatening e-mail sent to the company and obtained by ABC News.

When news broke last week that AIG had paid out bonuses of $165 million from the $170 billion it received in emergency aid from the government, outrage spread from the White House to Main Street.

Much of that anger was focused on the company's financial products unit, based in Wilton, Conn., which sold more derivatives than AIG could back, nearly causing the downfall of what was once the world's largest insurance company.

As one senior manager defended the company's decision to pay bonuses before the Connecticut legislature Thursday, some executives quit rather than continue to work in a company perpetually under siege.

A mid-level employee, granted anonymity because she continues to work in the company's financial products unit (though not with credit default swaps), said some executives there had hired private security firms to protect their homes following two weeks of public outrage over the payment of bonuses to executives with emergency funds allocated by the government.

"They fear every day for their safety," the employee said of her colleagues, some of whom have reported receiving hostile calls at home.

She said some people's children have been threatened on their college campuses and employees' parents have received angry phone calls.

On Saturday, after some executives names were made public, 40 protestors organized by the Connecticut Working Families Party demonstrated outside the homes of AIG employees, including the executive who received the largest known bonus.

AIG Gets Death Threats

"Everyone feels they are massively targeted," the employee said. "They are concerned about their wives and kids, and AIG has offered no help."

A series of e-mails that AIG gave to Rep. Lawrence Cafero, the Republican House Leader of the Connecticut General Assembly, and which were obtained by ABC News, offered a perspective on just how angry some people are and a glimpse at some of the threats the company has received.

"You scum-sucking morons," reads one e-mail. "How dare you even consider giving out bonuses. ... I assure you, if you do, you are setting up the scenario for in the near future a nightly news story where AIG employee/s is harmed or killed or one of your businesses is firebombed."

When he addressed Congress last week, AIG CEO Edward Liddy cited two e-mails the company received, one of which called for AIG executives and their families to "be executed with piano wire around their necks." Another e-mail said that "if the government can't do this properly, we the people will take it in our hands and see that justice is done. I'm looking for all the CEOs' names, kids, where they live, etc."

At hearings before the Connecticut legislature Thursday, Stephen Blake, head of human resources at the financial products unit, echoed the arguments Liddy made before the U.S. Congress last week and defended the company's decision to pay the bonuses.

"We've had people call [executive] homes to threaten and intimidate, protesters outside homes and offices," Blake said.

"We've had several valued executives resign over the past few weeks. All of this hurts our efforts to unwind the business and repay the taxpayer as soon as we can," he said.

Some of the company's executives have abandoned what they increasingly view as a sinking ship, helmed by leaders they believe have thrown them to circling sharks by acquiescing to populist demands that they return their bonuses.

On Thursday, two employees who work in the insurance giant's financial products unit in Europe -- which did handle the credit default swaps -- "resigned from their roles given shared concerns regarding their ability to conduct business in the current hostile environment toward Banque AIG and AIG FP employees generally," the company said in a statement.

Executives Call It Quits

When called for comment on the recent threats and resignations, AIG only provided ABC News with the statement announcing their decision to leave the company.

Their departure followed the resignation of Jake DeSantis, an executive vice president in the financial products unit, who made public his letter of intent and his feelings about the way he had been treated by the company in an open letter to Liddy, printed in Wednesday's New York Times.

DeSantis claimed to have no involvement with the credit default swaps.

"After 12 months of hard work dismantling the company -- during which A.I.G. reassured us many times we would be rewarded in March 2009 -- we in the financial products unit have been betrayed by A.I.G. and are being unfairly persecuted by elected officials. In response to this, I will now leave the company and donate my entire post-tax retention payment to those suffering from the global economic downturn. My intent is to keep none of the money myself," DeSantis wrote in the Times.

According to Stephen Blake, 15 of the 20 top senior officers who received bonuses have agreed to return the money in March, he said, while others -- like DeSantis -- plan to donate the bonuses to charities.

Blake echoed Liddy's Congressional testimony of last week arguing that the company was contractually obligated to pay out bonuses; that many of the workers had nothing to do with the downfall; that bonuses were necessary to retain the best people; and that many employees continued to work long hours despite being threatened.

"One incentive to stay on and help the company, despite the inevitable end to the story, was AIG's promise back in early 2008, many months before the federal bailout in September, to make retention payments," Blake said.

If anger is increasing among AIG employees, some political observers believe it is waning in Washington, just a week after Treasury Secretary Timothy Geithner, President Barack Obama and lawmakers from both sides of the aisle lambasted Liddy over the bonuses.

Since calling on the very financial companies it blames for the crisis to clean up the mess by buying up toxic assets, the Obama administration has tamped down some of the rage it had previously directed at financial firms and the bonus-loving executives who run them.

Congress Changes Its Tune on Bonuses

The House Financial Services Committee on Thursday adopted a toned-down version of a bill passed last week that would have taxed 90 percent of bonuses received by employees who work at companies that get TARP money. The new bill would allow those companies pay bonuses as long as the government determines the compensation is not "unreasonable or excessive."

The Senate also recently put on hold a bill that Democrats unsuccessfully tried to advance last week, which would have taxed 70 percent of the employee bonuses at AIG and other companies getting more than $100 million in bailout money.