It appears that there is a reason why Lawrence Summers seemed to capitulate to AIG’s bonus contracts for its financial products division, as I mentioned yesterday: They specifically wrote the contracts so that the counter-parties could consider it a default and demand an immediate payment if they did not get their bonuses.

So, basically, they wrote blackmail terms into their contract, which seems to me a awful lot like a sysop writing a back door into the computer network, and at least as illegal.

With the Serious Fraud Office in the UK investigating them, as well as New York Attorney General Andrew Cuomo investigating their bonus, I think that the best alternative at this time is for American authorities to seek their extradition under the terms of the recent treaty.

I think that though of facing the United States generally inhumane prison system will have them folding like overcooked broccoli for the privilege of spending a few years in a British prison.