Special Report: Global Financial Crisis

·Geithner said Tuesday that the AIG is to pay back the government for hefty bonuses.

·Also, an amount equal to the bonuses will be deducted from $30 billion in assistance.
·U.S. lawmakers on Tuesday vowed to all but strip AIG executives bonuses.

    WASHINGTON, March 17 (Xinhua) -- U.S. Treasury Secretary Timothy Geithner said Tuesday that the troubled insurance giant American International Group (AIG) is to pay back the government for hefty bonuses it paid out to its executives.

 

The American International Group (AIG) building in New York's financial district, March 16, 2009. (Xinhua/Reuters Photo) Photo Gallery>>>

    "We will impose on AIG a contractual commitment to pay the Treasury from the operations of the company in the amount of the retention awards just paid," Geithner said in a letter to lawmakers.

    "In addition, we will deduct from the 30 billion dollars in assistance an amount equal to the amount of those payments," he also said.

    Geithner's letter came as outrage mounted over the news that the financially strapped the AIG, which has so far received more than 170 billion dollars in a federal rescue, was paying 165 million dollars of bonuses to its executives.

    He said that U.S. President Barack Obama had asked him "to fully review all additional measures at my disposal to recoup these bonuses and to recover funds on behalf of taxpayers."

    Meanwhile, the secretary said he would "work with" AIG chief executive Edward Liddy "on measures to wind down the AIG in an orderly way and protect the American taxpayer."

    Also on Tuesday, lawmakers at the U.S. Congress vowed to all but strip executives of the ailing insurer their 165 million dollars in bonuses.

    House and Senate Democrats were crafting separate bills to tax up to 100 percent of generous bonuses awarded by the AIG and other companies rescued by taxpayer money.

    Republicans said U.S. President Barack Obama's administration should have done more to stop the bonuses.

    Obama pledged Monday his administration will stop the AIG from paying the "substantial sums" of bonuses to its executives.

    "How do they justify this outrage to the taxpayers who are keeping the company afloat," the president said, noting that the insurer is in financial straits because of "recklessness and greed."

    The AIG, which is now 80-percent owned by the U.S. government, lost 61.7 billion dollars in the fourth quarter of 2008, marking the largest corporate loss in history.  

U.S. lawmakers move to strip AIG executives of bonuses

    WASHINGTON, March 17 (Xinhua) -- Lawmakers at U.S. Congress vowed on Tuesday to all but strip executives of the troubled American International Group (AIG) of their 165 million dollars in bonuses.

    House and Senate Democrats were crafting separate bills to tax up to 100 percent of generous bonuses awarded by AIG and other companies rescued by taxpayer money, according to U.S. media reports. Full story

Obama slams AIG for paying bonuses to executives

U.S. President Barack Obama (L) and Treasury Secretary Timothy Geithner arrive in the East Room of the White House in Washington March 16, 2009 to make announcements on helping small business during the economic crisis. (Xinhua/Reuters Photo) Photo Gallery>>>

    WASHINGTON, March 16 (Xinhua) -- U.S. President Barack Obama on Monday blasted insurance giant American International Group and pledged to try and prevent it from giving its executives 165 million dollars in bonuses after taking billions in federal bailout funds.

    "It's hard to understand how derivative traders at AIG warranted any bonuses, much less 165 million dollars in extra pay," Obama said at the outset of an appearance to announce a plan to boost small businesses loans. Full story

Obama administration unveils plan to unlock credit for small businesses

    WASHINGTON, March 16 (Xinhua) -- The Obama administration on Monday unveiled a plan to help unlock credit for the nation's small businesses, which have generated about 70 percent of net new jobs annually over the past decade.

    "We are taking immediate action to help ensure that credit -- the lifeblood of America's small businesses and its economy -- gets flowing again to entrepreneurs and business owners," said U.S. Treasury Secretary Timothy Geithner, who with President Barack Obama unveiled the plan at the White House. Full story

Report: AIG to pay millions in bonuses despite gov't pressure

    WASHINGTON, March 14 (Xinhua) -- Insurance giant American International Group, which has received 173 billion U.S. dollars in federal bailout cash, will still give its senior employees tens of million of dollars in bonuses, The Washington Post reported. Full story

White House: Latest aid to AIG is critical

    WASHINGTON, March 2 (Xinhua) -- The U.S. government's latest aid to the troubled insurance giant American International Group (AIG) is critical, White House spokesman Robert Gibbs said Monday.

    While answering questions raised by reporters, Gibbs did not rule out future help for the ailing insurer. Full story

AIG to get additional $30 bln aid from U.S. gov't

    NEW YORK, Mar. 1 (Xinhua) -- American International Group Inc. (AIG) will receive up to an additional 30 billion U.S. dollars in federal assistance as part of the latest revamp of its government bailout, the Wall Street Journal reported Sunday.

    The new funding is intended to support AIG as it absorbs 60 billion dollars in quarterly losses and operational and competitive upheaval. Full story