WASHINGTON – With constituent anger rising over $165 million in bonuses paid to employees of government-owned insurance giant AIG, congressmen representing Lower Pottsgrove and Limerick (PA) townships on Tuesday (March 17, 2009) called the company’s actions cavalier and an affront to taxpayers.
Edward Liddy, chief executive officer of American International Group, is set to testify before Congress today (Wednesday, March 18, 2009) to explain why a company being kept afloat by $170 billion in federal bailout money is paying out millions in bonuses. Seventy-three employees in the troubled unit blamed for causing AIG’s financial downfall due to risky investments received bonuses of more than $1 million each, according to New York State Attorney General Andrew Cuomo.
U.S. Treasury Secretary Timothy Geithner said the bonuses were being reviewed by the Justice Department, and added that any bonus payments the Treasury cannot recoup would be recovered by requiring AIG to repay the Treasury an amount equal to the remaining bonuses. The Treasury also would deduct an amount equal to the payments from AIG’s latest $30 billion credit line from the government, The Associated Press reported.
“I find it outrageous and unacceptable that AIG, or any company receiving government funding to help right its business, would be so cavalier with the people’s money,” said Lower Pottsgrove’s Rep. Charlie Dent, PA 15th Dist.
“The only big checks this company should be writing are ones payable to the hard-working American taxpayers,” added Limerick’s Rep. James Gerlach, PA 6th Dist. “Wall Street executives cannot continue grabbing billion-dollar life preservers with one hand and huge bonus checks with the other,” he said.
Both Dent and Gerlach voted in January to oppose a second round of $350 billion in funding for the federal Troubled Asset Relief Program (TARP), from which money to rescue AIG was paid. As a result of its cash infusions, the government now owns 80 percent of the company. Gerlach described TARP as “sputtering.” Dent criticized its “lack of accountability.”
Photo by Canadian Pacific from Flickr