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Congress Vows To Reclaim AIG Bonuses
March 17, 200973 AIG Execs Got $1M Bonuses, NY AG Says
IOWA CITY, Iowa -- Democrats in Congress are promising to take away as much of the bonus money as they can from AIG executives.
Outrage is building in Congress over the $165 million in bonuses paid out to executives of the insurance giant that has received billions of dollars in a government bailout.
Senate Democrat Charles Schumer warned the executives, "If you don't return it on your own, we will do it for you."
The bonuses were paid legally as part of a program that had been disclosed by the company in advance.
But House and Senate Democrats are putting together separate bills to tax as much as 100 percent of the bonuses awarded by companies rescued by taxpayer money.
Republicans in Congress said President Barack Obama's administration should have done more to stop the bonuses.
AIG wouldn't be the only firm targeted in either bill.
The House measure would tax at 100 percent any bonus above $100,000 paid by companies that have received federal bailout money.
Edward Libby, AIG's chief executive officer, is scheduled to appear later this week before a House subcommittee.
73 AIG Execs Got $1M Bonuses, NY AG Says
New York Attorney General Andrew Cuomo said Tuesday that troubled insurance giant American International Group paid bonuses of $1 million or more to each of 73 employees, including 11 who no longer work for the company.
Cuomo subpoenaed information from AIG on Monday, saying he wanted to determine whether the payments constitute fraud under state law.
President Barack Obama and Washington lawmakers have blasted AIG for paying $160 million in bonuses to employees of the unit primarily responsible for the company's meltdown at the same time it has received federal assistance.
Cuomo said contracts written in March 2008 guaranteed employees 100 percent of their 2007 pay for 2008, regardless of their performance.
Geithner Response Questioned
Meanwhile, the top Republican on the Senate Banking Committee is questioning whether Treasury Secretary Timothy Geithner responded appropriately to AIG's payment of bonuses.
Sen. Richard Shelby asked, "Will we ever get the money back?"
The Alabama Republican, interviewed Tuesday on CBS's "The Early Show," stopped short of calling for Geithner's resignation.
But he did say: "What I want to ask, where was the secretary of the Treasury? Where was Treasury before this money was paid out? Why did not Treasury step in and let the American people know, just try to block it."
Obama has directed Geithner to see whether there's any way to retrieve or stop the bonus money.
Lawmakers from both parties have joined Obama in blasting the insurance giant for its bonuses, but some are more livid than others.
Iowa Sen. Charles Grassley suggested Monday that AIG executives should take a Japanese approach toward accepting responsibility for the collapse of the insurance giant, saying perhaps they should "resign or go commit suicide."
Grassley backtracked Tuesday morning, saying that "obviously" he didn't really mean that they should kill themselves. Instead, he said he would like executives of failed businesses to make a more formal public apology, as business leaders have done in Japan.
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