Anger Over AIG Executive Bonuses

March 18, 2009 12:00:00 AM PDT
The anger over executive bonuses at AIG has reached a fever pitch and Wednesday the CEO of the insurance giant will face a hostile congress.American International Group's CEO, Edward Liddy, will likely get the grilling of his life Wednesday morning when he faces lawmakers who are furious about executive bonuses worth $165-million dollars.

"We have to catch and punish all the crooks," said Rep. Steve Kagen (D) Wisconsin.

"Someone quite frankly has got to take these people to the woodshed," said Rep. Tim Ryan (D) Ohio.

Liddy was installed by the government to turn around the failing company which has received a tax payer funded bail out to the tune of $170-billion dollars. In an editorial in the Washington Post, he said he shares in the public's anger and admits mistakes were made. But those words may come too late since leaders in the nation's capitol are trying to get ahead of this fire storm.

Lawmakers are proposing legislation that would tax the executive bonuses, so that the government can get back more than 90-percent.

"We are here as new members introducing a bill to force accountability and protect taxpayers," said Rep. Erik Paulsen (R) Minnesota.

"The only way to get the money back is to tax it back!" said Rep. Steve Israel (D) New York.

The White House is also under fire. Critics said the administration hasn't done enough to prevent AIG from handing out the bonuses. Treasury Secretary Tim Geithner is pushing back. He details plans in a letter to congressional leaders: "We will impose on AIG a contractual commitment to pay the treasury the amount of the retention a wards just paid," and he said, "We will deduct from the $30-billion dollars in assistance, an amount equal to the amount of those payments."

The insurance giant is also under federal investigation to see if company leaders lied to shareholders about the company's stability.

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