WASHINGTON, Mar 18 – US Treasury Secretary Timothy Geithner said Tuesday that insurance giant AIG will be required to reimburse the government for hefty executive bonuses in order to get additional bailout funds.
In a letter to House Speaker Nancy Pelosi following a firestorm over the 165 million dollars in executive payouts, Geithner said it was impossible to prevent the contractual bonuses from being paid and said it may be difficult to recoup the payments.
Geithner said President Barack Obama "shares that outrage and so do I" over the bonuses paid to executives at the firm that neared a meltdown before last year\’s government rescue.
Geithner said the Department of Justice is reviewing "what avenues are available" to recoup bonuses already paid. If they violate provisions of the economic recovery plan passed last year, he said the government would negotiate with the company and employees on a payback.
He said future pay would be subject to "strict" limits imposed in new legislation covering bailed-out firms.
Further, he said the government would "impose on AIG a contractual commitment" to repay the 165 million dollars to taxpayers. And he said that sum would be deducted from the 30 billion dollars pending from AIG\’s bailout of more than 170 billion dollars.
Lawmakers said they were looking at punitive tax measures to reclaim the bonuses paid largely to the same London-based financial products traders who brought ruin to AIG and helped to ignite the global financial crisis.