Liddy: it's too risky not to pay AIG bonuses

Here's the important part of AIG CEO Edward Liddy's op-ed in this morning's Washington Post:

AIG has made a set of retention payments to employees based on a compensation system that prior management put in place. As has been reported, payments were made to employees in the Financial Products unit. Make no mistake, had I been chief executive at the time, I would never have approved the retention contracts that were put in place more than a year ago. It was distasteful to have to make these payments. But we concluded that the risks to the company, and therefore the financial system and the economy, were unacceptably high.

But doesn't it seem like there's a clause missing from that last sentence? You know, like: The risks .... of what? The clear implication is that Liddy is referring to risks that would attend to not making the payments. He made that argument in AIG's white paper on retention payments. And I guess Liddy no longer feels comfortable making the argument outright, and needs to do a little linguistic dance around it. But I don't see what other meaning you can apply to that last sentence: Liddy still thinks it would be too risky for AIG not to pay bonuses to its financial services unit.

Again, here's how it's put in the white paper:

AIGFP's books also contain a significant number of complex -- so-called bespoke -- transactions that are difficult to understand and manage.  This is one reason replacing key traders and risk managers would not be practical on a large scale.  Personal knowledge of the trades and the unique systems at AIGFP will be critical to an effective unwind of AIGFP's businesses and portfolios.