Fox News Channel "Your World" - Transcript

Interview

FOX NEWS CHANNEL "YOUR WORLD" INTERVIEW WITH REP. BRAD SHERMAN (D-CA)

INTERVIEWER: NEIL CAVUTO

SUBJECT: AIG BONUSES

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MR. CAVUTO: Bottom line: AIG, here we go again. How could this happen yet again? And scores of politicians once more with egg on their face for signing onto rescues for a company with more skeletons in its closet. AIG, tax-dollar-wasted gift that keeps giving, giving politicians something new to rail about, 165 million bucks in bonuses to the very execs some say triggered the company's financial demise in the first place. And that is but a fraction of the more 75 billion (dollars) AIG paid other big U.S. banks and even foreign ones to settle debts, all leaving a very unsettling feeling on Capitol Hill among those who swear they won't tolerate this but swear even more when they discover a familiar pattern to this. Democratic Congressman Brad Sherman of California sits on the Financial Services Committee.

Congressman, welcome to you.

REP. SHERMAN: Good to be with you, Neil.

MR. CAVUTO: Where was the oversight? When they had the big massage weekend a few months back, you'd think everyone would be like stink on you know what to make sure they didn't pull a stunt like that.

REP. SHERMAN: Well, I voted against the TARP bill twice because I didn't think there was adequate oversight. AIG should have been pushed into receivership last year, then its healthy insurance companies would be operating independently and we wouldn't have lost or having to commit $170 billion. It's not just the bonuses. It's the $170 billion going to the counterparties, including tens of billions to foreign entities. The bonuses are outrageous, but they're chump change compared to the other money.

MR. CAVUTO: Well, you're right. In the scheme of things, they are chump change. But what do you think of your colleagues, though, who keep providing it to AIG and apparently when they say with each wave of funding there's going to be accountability and apparently there is no accountability?

REP. SHERMAN: Well, we could have prevented these bonuses, and we can still take action now. If we go put this company into receivership, then any bonus that wasn't disbursed today will not be disbursed. We could enact in Congress a special tax law imposing a surtax on outrageous Wall Street compensation paid to those at bailed- out firms. And finally --

MR. CAVUTO: It's too late for that, though, isn't it? The genie is out of the bottle. And the likelihood of receivership is probably unlikely, isn't it?

REP. SHERMAN: Receivership should and could be done tomorrow morning. As for a tax law, on 2009 income, we've got until at least April 15th, 2010 to pass such a law. We should get this money back for the Treasury. What we shouldn't do is be fooled by those who are suggesting that all we should do is give AIG a total of 169.5 billion (dollars) instead of 170 billion (dollars) and that somehow we got our money back. The money that we have put and are putting into AIG is money going into a government-owned entity, 80 percent government owned.

MR. CAVUTO: Yeah, but the government keeps giving it, Congressman. I know you were against this and said you were against it, but your colleagues then rail against this outrageous sum going to bonuses and some of this other stuff, but they keep allocating these funds and then express shock that this kind of thing happens. But they keep doing it. So who's to trust the granter of our federal funds?

REP. SHERMAN: Well, the money that's going into AIG recently is the TARP money that was passed by Congress. Again, I voted against it twice. I have turned to Geithner person-to-person or face-to-face and said this company ought to be in receivership.

MR. CAVUTO: And what did he say to that?

REP. SHERMAN: He said, oh, it's going to hurt the image of the insurance subsidiaries if we do that. I mean, what image could they possibly have? If you're buying an insurance policy, AIG is not your favorite letters.

MR. CAVUTO: Indeed. Congressman, thank you very much.

END.

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