The New Scarlet Letter

Poor Ed Liddy. Hauled before a Congressional subcommittee yesterday he must have felt like the object of a multi-player Whack-a-Mole game. He took offense at one comment, only to have his interlocutor confirm that such was exactly his intention in making it. The disclosure of receipt of death threats by AIG employees was acknowledged, but probably not with such reassurance that the potential targets are eager to venture from their houses.

After a full dose of this verbal mutilation, Mr. Liddy offered that he was encouraging bonus recipients whose salary exceeded $100,000 to return half the bonus money. Too little, and likely too late, as the witch hunt for any half-plausibly responsible party continues. Hardly a wonder that the President has temporarily abandoned the capital fortress for the more congenial venues of a Los Angeles suburb town meeting and an appearance on the Tonight Show.

But ol’ Ed may be on to something. As Andrew Cuomo, New York State’s Attorney General seems intent on determining, those having pocketed the bonuses may have little protection from public disclosure of their names and respective extraordinary emoluments. Save of course, the seemingly attractive defense of having, after due consideration, returned them in their entirety.

As every parent knows, the instillation of desired juvenile behavior involves the careful application of both positive and negative reinforcement. And what, even allowing for the presumed adulthood of the AIG’ers at issue could be more conducive to subsequent right action, not to mention recouping the bonus money, and quelling the unseemly rush to judgment and execution of sentence, the latter two not necessarily in that order?

Surely not all eyes will weep for those with salaries of $100,000 having to make due without what were, in numerous cases, bonuses of stupefying magnitude. The total bonus pool of $165 million was spread over 418 employees – an average of just under $400,000 each and every one. And while some poor souls fell below that figure, fully 73 became first-time, or more likely multimillionaires.

After a brief period to allow calm reflection by those involved, AIG should accede to Congress’s request for the names of the 418 with salaries over $100,000, along with the amount of their bonus and, crucially, how much if not all has been returned.

One would hope those making the generous, not to mention prudent decision would be properly recognized, perhaps even partially exonerated for their past roles in leading AIG over the brink. For those choosing otherwise, well, the resulting scarlet letter might be more figurative than Hester Prynne’s, but might better serve to identify and shame.