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Treasury Will Make Grab to Recoup Bonus Funds

Mar 18, 2009

By JONATHAN WEISMAN, NAFTALI BENDAVID and DEBORAH SOLOMON

WASHINGTON — The Obama administration said Tuesday it would seek to recoup from American International Group Inc. the $165 million in bonuses paid to employees of the bailed-out insurance titan as it tried to contain a national furor over the payments.

White House officials are looking to use an executive-pay provision inserted into the recently passed stimulus law. The administration has seized on language that would allow the Treasury secretary to claw back payments if they were “inconsistent with the purpose” of the Troubled Asset Relief Program or “otherwise contrary to public interest.”

In a letter to Congress Tuesday, Treasury Secretary Timothy Geithner said the Treasury planned to use the law to deduct the cost of the bonuses from the government’s pending $30 billion cash infusion, and will also extract additional penalties from AIG operating funds.

Read the rest of the story:  http://online.wsj.com/article/SB123730459869257121.html?mod=rss_whats_news_us_business

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ThinkNote:

I agree wholeheartedly.  Regardless of whether these bonuses came from non-TARP funds, the fact the company needed funds – ALL $170 BILLION – to stop if from failing means it should conserve its cash AND PAY BACK THE MONEY, SO WE TAXPAYERS DON’T HAVE TO.  AIG should be showing responsibility and accountability – perhaps a bit a humility, instead of sticking it to American consumers one more time.

This is precisely why America is laughing stock of the world, and largely thanks to the deregulation mindset of the previous administration.  AIG’s irresponsible, Lassaiz-faire attitude should be buried, along with the ashes of Drexel Burnham, Michael Milken’s legacy and the LBOs that birthed this type of monster.
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