Paulson Can't Sack AIG Execs

By Lev Weinstein,  Newser Staff
Posted Oct 10, 2008 6:58 PM CDT
The AIG logo is shown Wednesday, Sept. 17, 2008 in New York.    (AP Photo/Mark Lennihan)
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(Newser) – Barack Obama is probably far from alone in wanting the heads of AIG execs who staged a $440,000 employee spa retreat just after the government's bailout of the company. The question is, does Treasury Secretary Henry Paulson have the authority to can the wayward execs? Nope, explains Juliet Lapidos in Slate. At least not technically.

The feds haven't actually handed over any cash—they've just given the assurance that they will if needed. "As long as the Treasury hasn't yet purchased the stock, it's not an owner with full authority over AIG's managers (and junkets)," writes Lapidos. That said, Paulson could probably use his clout to apply pressure.