CHICAGO, March 20 (Xinhua) — U.S. Federal money should not be used for bonuses, Leo Melamed, chairman emeritus of Chicago Mercantile Exchange (CME), said Friday on the American International Group’s (AIG) bonuses issue.
In an exclusive interview with Xinhua, Melamed said, “I do understand one should not take advantage of federal money that has been given by the government to help the company survive and use that money for bonuses.”
“I am not sure that AIG deserved to be bailed out, that is a big question mark for me,” said Melamed, father of financial futures and a long-time executive in the field of global derivatives.
However, he said that in the world the U.S. lives in, legal contractual obligations are very sacred and must be carried out.
AIG was the largest insurance company in the United States before it suddenly collapsed in September 2008. The company was bailed out by the Federal Reserve.
AIG became the target of widespread outrage after it was revealed on March 15 that it had paid 165 million U.S. dollars in bonuses two days before. President Barack Obama ordered the Treasury to see if the payments could be blocked or retrieved.
On Thursday, spurred on by a tidal wave of public anger, the House of Representatives voted 328 to 93 to get back most of the money by levying a 90-percent tax on bonuses paid by any company receiving more than 5 billion in bailout funds.
by Hu Guangyao and Tan Shusen